finance MCQs
shahimermaidTable4-1
GarlandCompanyBalance Sheet
Assets:
Cashandmarketablesecurities | $500,000 |
Accountsreceivable | 800,000 |
Inventories | 1,350,000 |
Prepaid expenses | 50,000 |
Totalcurrent assets | $2,700,000 |
Fixedassets | 5,000,000 |
Less:accum.depr. | (2,000,000) |
Netfixedassets | $3,000,000 |
Totalassets | $5,700,000 |
Liabilities: Accountspayable |
$400,000 |
Notespayable | 900,000 |
Accruedtaxes | 75,000 |
Totalcurrent liabilities | $1,375,000 |
Long-termdebt | 1,200,000 |
Owner’sequity | 3,125,000 |
Totalliabilities andowner’sequity | $5,700,000 |
Netsales (allcredit) |
$8,000,000 |
Less:Costofgoodssold | (3,500,000) |
Sellingandadministrativeexpense | (2,000,000) |
Depreciationexpense | (250,000) |
Interestexpense | (150,000) |
Earnings beforetaxes | 2,100,000 |
Income taxes | (700,000) |
Netincome | $1,400,000 |
Commonstockdividends |
$500,000 |
CommonShares Outstanding | 1,000,000 |
1 Based ontheinformation inTable4-1, thedebt ratiois:
a. | 21.1% |
b. | 48.8% |
c. | 45.2% |
d. | 22.6% |
2 Based ontheinformation inTable4-1, theoperating profitmarginis:
a. | 32.4% |
b. | 28.1% |
c. | 17.5% |
d. | 44.8% |
Table4-3
LesliCorporation
Assets:
Balance Sheet Income Statement
Cash $150,000 Sales (allcredit) $6,000,000
Accountsreceivable 350,000 Costofgoodssold (3,000,000) Inventory 600,000 Operating expenses (900,000) Netfixedassets 1,900,000 Interestexpense (750,000)
Totalassets 3,000,000 Income taxes (500,000) Netincome 850,000
Liabilities andowners’equity: Accountspayable $150,000
Notespayable 250,000
Long-termdebt 1,200,000
Owners’Equity 1,400,000
TotalL.+O.E.3,000,000
3 Based ontheinformation inTable4-3, assumingthat thefirmhasnopre- ferredstock, andpaid$250,000 incommon dividends,thefirm’sreturn on equitywas:
a. | 61% |
b. | 32% |
c. | 43% |
d. | 79% |
11 years ago
