41
81) Louie Corporation has provided the following data:
Year 2
Year 1
Accounts receivable
$
269,000
$
290,000
Inventory
$
190,000
$
160,000
Sales, on account
$
1,340,000
Cost of goods sold
$
860,000
The company’s operating cycle for Year 2 is closest to:
A) 81.0 days
B) 150.5 days
C) 79.2 days
D) 9.7 days
82) Last year Truro Corporation purchased $800,000 of inventory. The cost of goods sold was
$750,000 and the ending inventory was $125,000. The inventory turnover for the year was:
A) 6.0
B) 7.5
C) 6.4
D) 8.0
83) The accounts receivable for Note Corporation was $240,000 at the beginning of the year and
$260,000 at the end of the year. If the accounts receivable turnover for the year was 8 and 20% of
the total sales were cash sales, the total sales for the year were:
A) $2,600,000
B) $2,000,000
C) $2,400,000
D) $2,500,000
84) Smay Corporation has provided the following data:
This Year
Last Year
$
107,000
$
108,000
$
179,000
$
187,000
$
654,000
$
461,000
The accounts receivable turnover for this year is closest to:
A) 1.01
B) 0.99
C) 6.08
D) 6.11
85) Rawe Corporation’s accounts receivable at the end of Year 2 was $329,000 and its accounts
receivable at the end of Year 1 was $280,000. Sales, all on account, amounted to $1,350,000 in
Year 2.The company’s average collection period for Year 2 is closest to:
A) 1.2 days
B) 1.0 days
C) 82.4 days
D) 89.0 days
86) Pascarelli Corporation’s inventory at the end of Year 2 was $122,000 and its inventory at the
end of Year 1 was $150,000. Cost of goods sold amounted to $870,000 in Year 2.The company’s
average sale period for Year 2 is closest to:
A) 230.1 days
B) 51.2 days
C) 57.0 days
D) 32.3 days
87) Deflorio Corporation’s inventory at the end of Year 2 was $156,000 and its inventory at the end
of Year 1 was $140,000. The company’s total assets at the end of Year 2 were $1,416,000 and its
total assets at the end of Year 1 were $1,390,000. Sales amounted to $1,320,000 in Year 2.The
company’s total asset turnover for Year 2 is closest to:
A) 0.94
B) 1.06
C) 5.38
D) 0.19
88) Data from Estrin Corporation’s most recent balance sheet and income statement appear below:
This Year
Last Year
$
109,000
$
106,000
$
139,000
$
158,000
$
787,000
$
501,000
The average sale period for this year is closest to:
A) 101 days
B) 50 days
C) 108 days
D) 45 days
89) Shipley Corporation has provided the following data from its most recent balance sheet:
Total assets
$
760,000
Total liabilities
$
590,000
Total stockholders’ equity
$
170,000
The debt-to-equity ratio is closest to:
A) 0.29
B) 3.47
C) 0.22
D) 0.78
90) Neelty Corporation has interest expense of $16,000, sales of $600,000, a tax rate of 30%, and
after-tax net income of $56,000. The company’s times interest earned ratio is closest to:
A) 6.0
B) 5.0
C) 4.5
D) 3.5
91) Falmouth Corporation’s debt to equity ratio is 0.6. Current liabilities are $120,000, long term
liabilities are $360,000, and working capital is $140,000. Total assets of the corporation must be:
A) $600,000
B) $1,200,000
C) $800,000
D) $1,280,000
92) Klein Corporation has provided the following data:
Year 2
Year 1
Total assets
$
1,337,000
$
1,310,000
Total liabilities
$
598,000
$
580,000
Total stockholders’ equity
$
739,000
$
730,000
The company’s equity multiplier is closest to:
A) 1.24
B) 0.56
C) 1.80
D) 0.81
93) Last year Javer Corporation had net income of $200,000, income tax expense of $74,000, and
interest expense of $20,000. The corporation’s times interest earned was closest to:
A) 10.0
B) 11.0
C) 5.3
D) 14.7
94) The times interest earned ratio of Whitney Corporation is 3.0. The interest expense for the year
is $21,000, and the corporation’s tax rate is 40%. The corporation’s after-tax net income must be:
A) $63,000
B) $25,200
C) $30,000
D) $42,000
95) A portion of Lapore Corporation’s Balance Sheet appears below:
Liabilities and Stockholders’ Equity
Year 2
Year 1
Current liabilities:
Accounts payable
$
209,000
$
200,000
Accrued liabilities
27,000
30,000
Notes payable, short term
94,000
90,000
Total current liabilities
330,000
320,000
Bonds payable
280,000
280,000
Total liabilities
610,000
600,000
Stockholders’ equity:
Common stock, $4 par value
360,000
360,000
Additional paid-in capital
70,000
70,000
Retained earnings
589,000
570,000
Total stockholders’ equity
1,019,000
1,000,000
Total liabilities & stockholders’ equity
$
1,629,000
$
1,600,000
The company’s debt-to-equity ratio at the end of Year 2 is closest to:
A) 0.60
B) 0.37
C) 0.39
D) 0.27
96) Wittels Corporation has provided the following data:
Year 2
Year 1
Total assets
$
1,253,000
$
1,230,000
Total liabilities
$
586,000
$
570,000
Total stockholders’ equity
$
667,000
$
660,000
The company’s equity multiplier is closest to:
A) 1.14
B) 0.53
C) 0.88
D) 1.87
97) Broch Corporation’s income statement appears below:
Income Statement
Sales (all on account)
$
1,220,000
Cost of goods sold
760,000
Gross margin
460,000
Operating expenses
415,692
Net operating income
44,308
Interest expense
14,000
Net income before taxes
30,308
Income taxes (35%)
10,608
Net income
$
19,700
The company’s times interest earned ratio is closest to:
A) 4.87
B) 1.41
C) 3.16
D) 2.16
98) Cutsinger Corporation has provided the following data from its most recent income statement:
Net operating income
$
55,000
Interest expense
$
43,000
Net income before taxes
$
12,000
Income taxes
$
4,000
Net income
$
8,000
The times interest earned ratio is closest to:
A) 1.83
B) 0.28
C) 1.28
D) 0.19
99) Karma Corporation has total assets of $190,000 and total liabilities of $90,000. The
corporation’s debt-to-equity ratio is closest to:
A) 0.47
B) 0.90
C) 0.53
D) 0.32