Andrea’s Fashions sold merchandise for $95,000 cash during the month of July. Returns
that month totaled $2,000. If the company’s gross profit rate is 40%, Andrea’s will
report monthly net sales revenue and cost of goods sold of
a.$95,000 and $57,000.
b.$93,000 and $37,200.
c.$93,000 and $55,800.
d.$95,000 and $55,800.
In a recent year Hart Corporation had net income of $125,000, interest expense of
$30,000, and tax expense of $40,000. What was Hart Corporation’s times interest
earned for the year?
a.6.50
b.4.17
c.5.17
d.5.50
Equipment that cost $72,000 and on which $60,000 of accumulated depreciation has
been recorded was disposed of for $18,000 cash. The entry to record this event would
include a
a.gain of $6,000.
b.loss of $6,000.
c.credit to the Equipment account for $18,000.
d.credit to Accumulated Depreciation for $60,000.
Hogan Company has $1,000,000 of bonds outstanding. The unamortized premium is
$14,400. If the company redeemed the bonds at 101, what would be the gain or loss on
the redemption?
a.$4,400 gain
b.$4,400 loss
c.$10,000 gain
d.$10,000 loss
Which statement describes the periodicity assumption?
a.The life of a business can be divided into artificial times periods for which useful
reports can be prepared.
b.The business will remain in operation for the foreseeable future.
c.Every economic unit can be separately identified and accounted for.
d.Financial reports are issued on a timely basis for decision-making.
Ferman Corporation had net income of $160,000 and paid dividends of $50,000 to
common stockholders and $20,000 to preferred stockholders in 2014. Ferman
Corporation’s common stockholders’ equity at the beginning and end of 2014 was
$870,000 and $1,130,000, respectively. Ferman Corporation’s return on common
stockholders’ equity was
a.16%.
b.14%.
c.11%.
d.9%.
What does the inventory turnover measure?
a.The average amount of time inventory sits on a company’s shelves
b.The dollar amount of funds tied up in inventory
c.How quickly a company sells its goods
d.The profit generated from the selling of inventory
Wong Ho Company had the following transactions during 2013:
Sales of 11,000 on account
Collected 4,000 for services to be performed in 2014
Paid 1,250 cash in salaries
Purchased airline tickets for 500 in December for a trip to take place in 2014
What is Wong Ho’s 2013 net income using accrual accounting?
a.9,750.
b.13,750.
c.13,250.
d.9,250.
Use the following data to determine the total amount of working capital.
a.$404,000
b.$234,000
c.$254,000
d.$174,000
Based on the following data, what is the amount of working capital?
a.$274,000
b.$322,000
c.$360,000
d.$316,000
Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on
January 1, 2013. The bonds had a face value of $400,000, pay interest annually on
December 31st, and have a call price of 102. Sparks uses the straight-line method of
amortization. What is the amount of interest Sparks must pay the bondholders in 2013?
a.$33,840
b.$32,000
c.$32,640
d.$3,384
Selected data from 2014 financial statements of Xi Corporation include the following
(amount in millions):
The debt to assets ratio is
a.62.5%.
b.52.7%.
c.1.60%.
d.6.2 times.
Warner Company issued $4,000,000 of 6%, 10-year bonds on one of its interest dates
for $3,454,800 to yield an effective annual rate of 8%. The effective-interest method of
amortization is to be used. The journal entry on the first interest payment date, to record
the payment of interest and amortization of discount will include a
a.debit to Bond Interest Expense for $240,000.
b.credit to Cash for $276,385.
c.credit to Discount on Bonds Payable for $36,384.
d.debit to Bond Interest Expense for $320,000.