BVI Corporation had net income of $1,600,000 and paid dividends to common
stockholders of $400,000 in 2014. The weighted average number of shares outstanding
in 2014 was 500,000 shares. BVI Corporation’s common stock is selling for $50 per
share on the NASDAQ. BVI Corporation’s payout ratio for 2014 is
a.$5 per share.
b.25%.
c.20%.
d.12.5%.
The Accounts Receivable account has a beginning balance of $52,000 and an ending
balance of $69,000. If $42,000 was sold on account during the year, what were the total
collections on account?
a.$25,000
b.$59,000
c.$69,000
d.$79,000
The following information pertains to Blue Flower Company. Assume that all balance
sheet amounts represent both average and ending balance figures. Assume that all sales
were on credit.
What is the profit margin for this company?
a.41.3%
b.45.5%
c.33.1%
d.20.7%
On January 1, Ripken Corporation had 40,000 shares of $10 par value common stock
outstanding. On March 17 the company declared a 10% stock dividend to stockholders
of record on March 20. Market value of the stock was $13 on March 17. The entry to
record the transaction of March 17 would include a
a.debit to Stock Dividends for $52,000.
b.credit to Cash for $52,000.
c.credit to Common Stock Dividends Distributable for $52,000.
d.credit to Common Stock Dividends Distributable for $12,000.
Mitchell Corporation bought equipment on January 1, 2014. The equipment cost
$180,000 and had an expected salvage value of $30,000. The life of the equipment was
estimated to be 6 years. The book value of the equipment at the beginning of the third
year would be
a.$180,000.
b.$150,000.
c.$130,000.
d.$50,000.
Financial information is presented below:
The profit margin would be
a..21
b..14
c..35
d..15
Kathy’s Blooms purchased a delivery van with a $50,000 list price. The company was
given a $5,000 cash discount by the dealer, and paid $2,500 sales tax. Annual insurance
on the van is $1,250. As a result of the purchase, by how much will Kathy’s Blooms
increase its van account?
a.$50,000.
b.$45,000.
c.$48,750.
d.$47,500.
On January 1, 2014, $2,000,000, 5-year, 10% bonds, were issued for $2,120,000.
Interest is paid annually on January 1. If the issuing corporation uses the straight-line
method to amortize premium on bonds payable, the monthly amortization amount is
a.$17,666.
b.$24,000.
c.$2,400.
d.$2,000.
If a loss of $27,000 is incurred in selling (for cash) office equipment having a book
value of $200,000, the total amount reported in the cash flows from investing activities
section of the statement of cash flows is
a.$173,000.
b.$200,000.
c.$227,000.
d.$27,000.
The following information was available for Bowyer Company at December 31, 2014:
beginning inventory $90,000; ending inventory $70,000; cost of goods sold $880,000;
and sales $1,200,000. Bowyer’s inventory turnover in 2014 was
a.15.0 times.
b.11.0 times.
c.12.6 times.
d.9.8 times.
Use the following data to determine the total amount of working capital.
a.$240,000
b.$390,000
c.$130,000
d.$180,000
Danley Corporation began business by issuing 200,000 shares of $5 par value common
stock for $24 per share. During its first year, the corporation sustained a net loss of
$40,000. The year-end balance sheet would show
a.Common Stock of $1,000,000.
b.Common Stock of $4,800,000.
c.total paid-in capital of $4,760,000.
d.total paid-in capital of $3,800,000.
The following information is provided for Nguyen Company and Northwest
Corporation.
What is Northwest’s asset turnover ratio for 2014?
a.1.17 times
b.1.05 times
c.1.52 times
d.1.03 times
Use the following data to calculate the current ratio.
a.2.07 : 1
b.1.67 : 1
c.3.00 : 1
d.2.60 : 1
The lower of cost or market basis of valuing inventories is an example of
a.comparability.
b.the historical cost principle.
c.conservatism.
d.consistency.
Identify whether each of the following items would be (a) added to the book balance, or
(b) deducted from the book balance in a bank reconciliation.
Using the percentage-of-receivables method for recording bad debt expense, estimated
uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful
Accounts is $11,000 debit before adjustment what is the amount of bad debt expense
for that period?
a.$45,000
b.$11,000
c.$56,000
d.$34,000