Financial Accounting Homework - 90 minute time limit

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Question 11 pts
A debt to equity ratio of 1.0 means that half of the company's assets are financed by creditors.
 
 
 
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Question 21 pts
The Sarbanes-Oxley Act requires a company to guarantee that its financial statements are 100 percent accurate.
 
 
 
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Question 31 pts
The cost-benefit convention holds that the benefits to be gained from providing accounting information should be greater than the costs of providing it.
 
 
 
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Question 41 pts
The investments category on the balance sheet normally includes investments that are intended to be held for a long period of time.
 
 
 
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Question 51 pts
Investors and creditors use financial statements to evaluate a company's ability to pay dividends and interest.
 
 
 
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Question 61 pts
Current assets divided by current liabilities is known as the
 
 
 
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Question 71 pts
The normal operating cycle helps define which of the following balance sheet sections?
 
 
 
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Question 81 pts
Which of the following is a measure of liquidity?
 
 
 
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Question 91 pts
The user can depend on the accuracy of financial information when which of the following qualitative characteristics has been followed?
 
 
 
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Question 101 pts
Relevance is comprised of all of the following except
 
 
 
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Question 111 pts
___________ is related to both the nature of an item and its size.
 
 
 
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Question 121 pts
The lower-of-cost-or-market method of accounting for inventories follows the convention of
 
 
 
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Question 131 pts
A practical decision to expense a $120 printer rather than record it as property, plant, and equipment and depreciate it probably is made on the basis of the convention of
 
 
 
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Question 141 pts
The convention of consistency refers to consistent use of accounting principles
 
 
 
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Question 151 pts
The profit margin equals
 
 
 
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Question 161 ptsSkip to question text.

Use this balance sheet and income statement to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 
National Textile
Balance Sheet
December 31, 20x5
Assets
Liabilities
Current assets
$ 12,000
 Current liabilities
$ 8,000
Investments
2,000
 Long-term liabilities
   2,000
Property, plant, and equipment
16,000
 Total liabilities
$ 10,000
Intangible assets
   10,000
   
  
Stockholders' Equity
   Common stock
  30,000
     
     
   Total liabilities and 
Total assets
$40,000
 stockholders' equity
$40,000
      

 
National Textile
Income Statement
For the Year Ended December 31, 20x5
Net sales
$48,000
Cost of goods sold
    16,000
Gross margin
$32,000
Operating expenses
  22,400
Net income
$  9,600
  
  
  

The current ratio for National Textile is
 
 
 
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Question 171 ptsSkip to question text.

Use this balance sheet and income statement to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 
National Textile
Balance Sheet
December 31, 20x5
Assets
Liabilities
Current assets
$ 12,000
 Current liabilities
$ 8,000
Investments
2,000
 Long-term liabilities
   2,000
Property, plant, and equipment
16,000
 Total liabilities
$ 10,000
Intangible assets
   10,000
   
  
Stockholders' Equity
   Common stock
  30,000
     
     
   Total liabilities and 
Total assets
$40,000
 stockholders' equity
$40,000
      

 
National Textile
Income Statement
For the Year Ended December 31, 20x5
Net sales
$48,000
Cost of goods sold
    16,000
Gross margin
$32,000
Operating expenses
  22,400
Net income
$  9,600
  
  
  

The return on assets for National Textile is
 
 
 
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Question 181 ptsSkip to question text.

Use this information to answer the following question.

 
Sunshine Travel
Balance Sheet
December 31, 20x5
Assets
Cash 
$ 40,000
 
Short-term investments 
20,000
 
Notes receivable (due in ten months) 
15,000
 
Accounts receivable 
10,000
 
Merchandise inventory 
35,000
 
Land held for future use 
40,000
 
Land 
45,000
 
Building
$50,000
  
 Less accumulated depreciation
   10,000
40,000
 
Trademark 
  35,000
 
Total assets  
$280,000
 
Liabilities
Notes payable (due in six months) 
$ 25,000
 
Accounts payable 
10,000
 
Salaries payable 
5,000
 
Mortgage payable (due in seven years) 
  45,000
 
Total liabilities  
$85,000
    
Stockholders' Equity
Common Stock 
100,000
 
Retained Earnings 
95,000
 
Total Stockholders’ Equity  
195,000
Total liabilities and stockholders’ equity  
$280,000
    
    
    
     

The total dollar amount of assets to be classified as current assets is
 
 
 
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Question 191 ptsSkip to question text.

Use this information to answer the following question.

 
Coyle Company
Balance Sheet
December 31, 20x5
Assets
Cash 
$ 70,000
 
Short-term investments 
56,000
 
Accounts receivable 
28,000
 
Notes receivable (due in six months) 
42,000
 
Merchandise inventory 
98,000
 
Special fund for purchasing a building 
112,000
 
Land 
140,000
 
Building
$150,000
  
 Less accumulated depreciation
   28,000
122,000
 
Trademark 
  92,000
 
Total assets  
$760,000
 
Liabilities
Notes payable (due in one year) 
$ 70,000
 
Accounts payable 
130,000
 
Salaries payable 
14,000
 
Mortgage payable (due in seven years) 
  46,000
 
Total liabilities  
$260,000
    
Stockholders’ Equity
    
Common stock  
500,000
Total liabilities and stockholders' equity  
$760,000
     

The total amount of working capital is
 
 
 
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Question 201 ptsSkip to question text.

Use this balance sheet and income statement for the first year of operations for Cane Construction to answer the following question. Use ending balances whenever average balances are required for computing ratios.

 
Cane Construction
Balance Sheet
December 31, 20x5
Assets
Liabilities
Current assets
$ 14,000
 Current liabilities
$  8,000
Investments
6,000
 Long-term liabilities
      2,000
Property, plant, and equipment
24,000
 Total liabilities
$  10,000
Intangible assets
   16,000
   
  
Stockholders' Equity
   Common stock
  50,000
     
   Total liabilities and 
Total assets
$60,000
 stockholders' equity
$60,000
      


 
Cane Construction
Income Statement
For the Year Ended December 31, 20x5
Net sales
$80,000
Cost of goods sold
  32,000
Gross margin
$48,000
Operating expenses
  26,400
Net income
$21,600
  
  
  

The current ratio for Cane Construction is
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