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1) ferman corporation had net income of $200,000 and paid dividends of $50,000 to
common stockholders and $20,000 to preferred stockholders in 2012. ferman
corporations common stockholders equity at the beginning and end of 2012 was
$870,000 and $1,130,000, respectively. ferman corporations return on common
stockholders equity was
a.20%
b.18%
c.15%
d.13%
2) a company shows the following balances:
what is the gross profit rate?
a.60%
b.75%
c.40%
d.25%
3) inventory accounting under ifrs differs from gaap in regard to
a.neither the use of lifo nor lower-of-cost-or-market
b.the use of lifo but not lower-of-cost-or-market
c.the use of lower-of-cost-or-market but not lifo
d.the use of lifo and lower-of-cost-or-market
4) a credit balance in cash over and short account is shown as
a.an asset
b.a liability
c.a revenue
d.an expense
5) the double-entry accounting system is the basis of accounting systems
a.worldwide.
b.worldwide, except for the u.s.
c.in the u.s. only
d.neither internationally nor in the u.s.
6) dobler company uses a periodic inventory system. details for the inventory account
for the month of january 2012 are as follows:
an end of the month (1/31/2012) inventory showed that 140 units were on hand. if the
company uses fifo and sells the units for $10 each, what is the gross profit for the month?
a.$1,282
b.$1,318
c.$2,600
d.$1,400
7) when an account is written off using the allowance method, accounts receivable
a.is unchanged and the allowance account increases
b.increases and the allowance account increases
c.decreases and the allowance account decreases
d.decreases and the allowance account increases
8) leary manufacturing corporation purchased 4,000 shares of its own previously issued
$10 par common stock for $92,000. as a result of this event,
a.learys common stock account decreased $40,000
b.learys total stockholders equity decreased $92,000
c.learys paid-in capital in excess of par value account decreased $52,000
d.all of the above
9) roberts department store had net credit sales of $9,000,000 and cost of goods sold of
$6,000,000 for the year. the average inventory for the year amounted to $2,500,000. the
inventory turnover ratio for the year is
a.3.6 times
b.3.2 times
c.3.0 times
d.2.4 times
10) the following information is available for wallace company for 2012. wallace uses
the lifo inventory method.
instructions
(a)calculate the inventory turnover ratio and days in inventory for wallace company
based on lifo.
(b)calculate the inventory turnover ratio and days in inventory after adjusting for the
lifo reserve.
11) a.sales = $650,500; accounts receivable increased by $27,500. calculate cash
receipts from sales.
b.cost of goods sold = $430,000; inventory decreased by $75,000; accounts payable
decreased by $28,500. calculate cash payments for purchases.
c.the income statement shows $12,500 in income taxes. the balance sheet shows an
increase in taxes payable of $1,500. calculate the cash paid for income taxes.
d.operating expenses total $75,750; depreciation expense = $37,200; prepaid expenses
increased by $15,400; accrued wages decreased by $10,600. calculate cash payments
for operating expenses.
12) use the following information for boxter, inc., clifford company, danforth industries,
and evans services to answer the question using the lifo adjustment, which company
shows the greatest improvement in its current ratio from 2011 to 2012?
a.boxter
b.clifford
c.danforth
d.evans
13) the financial statements of the belfry manufacturing company reports net sales of
$400,000 and accounts receivable of $80,000 and $40,000 at the beginning of the year
and end of year, respectively. what is the average collection period for accounts
receivable in days?
a.40 times
b.80 times
c.54.7 times
d.50 times
14) net sales are $1,800,000, beginning total assets are $700,000, and the asset turnover
is 3.0. what is the ending total asset balance?
a.$600,000
b.$500,000
c.$700,000
d.$650,000
15) the net income reported on the income statement for the current year was $210,000.
depreciation was $25,000. accounts receivable and inventories decreased by $5,000 and
$15,000, respectively. prepaid expenses and accounts payable increased, respectively,
by $500 and $4,000. how much cash was provided by operating activities?
a.$240,500
b.$250,500
c.$258,500
d.$219,500
16) earnings per share is a
a.profitability ratio
b.liquidity ratio
c.solvency ratio
d.trending ratio
