Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)
$
1,310
Cost of goods sold
780
Gross margin
530
Selling and administrative expenses
359
Net operating income
171
Interest expense
35
Net income before taxes
136
Income taxes (30%)
41
Net income
$
95
143) The working capital at the end of Year 2 is:
A) $260 thousand
B) $680 thousand
C) $700 thousand
D) $540 thousand
144) The current ratio at the end of Year 2 is closest to:
A) 0.45
B) 1.93
C) 0.44
D) 1.04
145) The acid-test (quick) ratio at the end of Year 2 is closest to:
A) 0.96
B) 1.36
C) 1.50
D) 1.93
146) The accounts receivable turnover for Year 2 is closest to:
A) 5.95
B) 5.70
C) 1.09
D) 0.92
147) The average collection period for Year 2 is closest to:
A) 64.0 days
B) 0.9 days
C) 61.3 days
D) 1.1 days
148) The inventory turnover for Year 2 is closest to:
A) 0.92
B) 6.50
C) 1.08
D) 6.24
149) The inventory turnover for Year 2 is closest to:
A) 58.5 days
B) 33.4 days
C) 217.3 days
D) 56.2 days
Data from Dunshee Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$
130
$
100
Accounts receivable, net
270
290
Inventory
90
110
Prepaid expenses
10
10
Total current assets
$
500
$
510
Total current liabilities
$
230
$
220
Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.
150) The working capital at the end of Year 2 is:
A) $270
B) $500
C) $770
D) $740
151) The current ratio at the end of Year 2 is closest to:
A) 0.38
B) 2.17
C) 0.94
D) 0.40
152) The acid-test (quick) ratio at the end of Year 2 is closest to:
A) 2.17
B) 1.78
C) 1.74
D) 1.06
153) The average collection period for Year 2 is closest to:
A) 1.1 days
B) 0.9 days
C) 84.3 days
D) 87.3 days
154) The average sale period for Year 2 is closest to:
A) 28.1 days
B) 45.0 days
C) 50.0 days
D) 227.7 days
110
Financial statements for Maraby Corporation appear below:
Maraby Corporation
Balance Sheet
December 31, Year 2 and Year 1
(dollars in thousands)
Year 2
Year 1
Current assets:
Cash and marketable securities
$
220
$
190
Accounts receivable, net
190
160
Inventory
140
150
Prepaid expenses
70
80
Total current assets
620
580
Noncurrent assets:
Plant & equipment, net
1,180
1,150
Total assets
$
1,800
$
1,730
Current liabilities:
Accounts payable
$
100
$
120
Accrued liabilities
100
70
Notes payable, short term
160
160
Total current liabilities
360
350
Noncurrent liabilities:
Bonds payable
450
500
Total liabilities
810
850
Stockholders’ equity:
Common stock, $5 par
160
160
Additional paid-in capital
200
200
Retained earnings
630
520
Total stockholders’ equity
990
880
Total liabilities & stockholders’ equity
$
1,800
$
1,730
Maraby Corporation
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account)
$
1,960
Cost of goods sold
1,370
Gross margin
590
Selling and administrative expense
230
Net operating income
360
Interest expense
50
Net income before taxes
310
Income taxes (30%)
93
Net income
$
217
155) Maraby Corporation’s working capital (in thousands of dollars) at the end of Year 2 was
closest to:
A) $260
B) $620
C) $360
D) $990
156) Maraby Corporation’s current ratio at the end of Year 2 was closest to:
A) 1.34
B) 1.72
C) 0.60
D) 0.44
157) Maraby Corporation’s acid-test (quick) ratio at the end of Year 2 was closest to:
A) 0.51
B) 0.47
C) 1.14
D) 1.95
158) Maraby Corporation’s accounts receivable turnover for Year 2 was closest to:
A) 13.5
B) 7.8
C) 11.2
D) 9.4
159) Maraby Corporation’s average collection period for Year 2 was closest to:
A) 38.6 days
B) 46.6 days
C) 32.6 days
D) 27.0 days
160) Maraby Corporation’s inventory turnover for Year 2 was closest to:
A) 11.2
B) 7.8
C) 9.4
D) 13.5
161) Maraby Corporation’s average sale period for Year 2 was closest to:
A) 38.8 days
B) 32.6 days
C) 46.6 days
D) 27.0 days
Excerpts from Sydner Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$
140
$
160
Accounts receivable, net
210
230
Inventory
240
200
Prepaid expenses
10
10
Total current assets
$
600
$
600
Total current liabilities
$
360
$
330
Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900.
162) The working capital at the end of Year 2 is:
A) $600
B) $1,000
C) $880
D) $240
163) The current ratio at the end of Year 2 is closest to:
A) 1.67
B) 0.32
C) 0.80
D) 0.41
164) The acid-test (quick) ratio at the end of Year 2 is closest to:
A) 1.67
B) 1.00
C) 0.97
D) 1.25
165) The accounts receivable turnover for Year 2 is closest to:
A) 6.62
B) 1.10
C) 6.32
D) 0.91
166) The average collection period for Year 2 is closest to:
A) 55.1 days
B) 0.9 days
C) 1.1 days
D) 57.8 days
167) The inventory turnover for Year 2 is closest to:
A) 3.75
B) 1.20
C) 4.09
D) 0.83
168) The average sale period for Year 2 is closest to:
A) 63.0 days
B) 89.2 days
C) 236.3 days
D) 97.3 days
Ribaudo Corporation has provided the following financial data from its balance sheet and income
statement:
Year 2
Year 1
Cash
$
74,000
$
130,000
Accounts receivable, net
$
255,000
$
240,000
Inventory
$
173,000
$
180,000
Total current assets
$
564,000
$
610,000
Total assets
$
1,350,000
$
1,330,000
Accounts payable
$
170,000
$
160,000
Total liabilities
$
633,000
$
620,000
Total stockholders’ equity
$
717,000
$
710,000
Sales (all on account)
$
1,290,000
Cost of goods sold
$
700,000
169) The company’s accounts receivable turnover for Year 2 is closest to:
A) 1.06
B) 5.06
C) 5.21
D) 0.94
170) The company’s average collection period for Year 2 is closest to:
A) 70.1 days
B) 1.1 days
C) 72.1 days
D) 1.0 days
171) The company’s inventory turnover for Year 2 is closest to:
A) 3.89
B) 1.04
C) 3.97
D) 4.05