ACCT310 Intermediate Accounting I Part 1
accounting teacherACCT310 Intermediate Accounting I Part 1
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Compute the times interest earned ratio given the following data:
Net income $260,000
Income from operations 485,000
Interest expense 20,000
Income tax expense 58,000
A) 14 times
B) 16.9 times
C) 13 times
D) 9.1 times
The following data represent selected information from the comparative income statement and balance sheet for ABC Company for the years ended December 31, 2014 and 2013:
2014 2013
Cash $ 15,000 $ 15,000
Net accounts receivable 30,000 25,000
Inventory 43,000 40,000
Prepaid expenses 5,000 7,000
Total current assets 93,000 87,000
Total noncurrent assets 112,000 114,000
Total current liabilities 70,000 60,000
Total noncurrent liabilities 40,000 45,000
Common stock, no-par* 65,000 60,000
Retained earnings 30,000 36,000
Net credit sales 370,000 333,000
Cost of goods sold 150,000 160,000
Gross profit 220,000 173,000
Income from operations 95,000 87,000
Interest expense 8,000 8,000
Net income 70,000 57,000
* 10,000 shares of common stock have been issued and outstanding since the company was established.
2) The debt ratio for ABC Company on December 31, 2014, was:
A) 1.82
B) 0.55
C) 1.87
D) 0.54
3) The accounts receivable turnover for ABC Company for the year ended December 31, 2014, was:
A) 12.33
B) 13.32
C) 12.11
D) 13.45
4) ABC Company's gross profit ratio for the year ended December 31, 2014, was:
A) .59
B) .41
C) .23
D) .11
5) The inventory turnover for ABC Company for the year ended December 31, 2014, was:
A) 3.49
B) 3.61
C) 3.86
D) 4.00
6) The acid-test ratio for ABC Company on December 31, 2014, was:
A) 1.45
B) 0.57
C) 1.26
D) 0.67
7 ) For the year ending on December 31, 2006, ABC Company's rate of return on net sales was:
A) 0.19
B) 0.21
C) 0.17
D) 0.18
8) The current ratio for ABC Company on December 31, 2014, was:
A) .67
B) 1.26
C) 1.45
D) .57
9) ABC Company's days' sales in receivables for the year ended December 31, 2014, was:
A) 25
B) 33
C) 27
D) 30
Write your answer in the space provided on the sheet of paper.
10) Classify each statement below as an operating activity, investing activity, or a financing activity.
Use ”1” for Operating activity
Use “2” for Investing activity
Use “3” for Financing activity
Use “4” for Noncash Investing and Financing activity
a. Sold 10,000 shares of stock for cash. -
b. Paid salaries of employees. -
c. Paid amount due for income taxes. -
d. Paid interest expense. -
e. Purchased office equipment for cash. -
f. Sold old office equipment and received cash. -
g. h. Received interest income. - Paid interest on a bank loan. -
i. Paid dividends to stockholders. -
10 years ago
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