Multiple choice

1. Rick Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The preferred stock is cumulative. How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is $12,000 in arrears?

A. $18,000 preferred; $22,000 common

B. $20,000 preferred; $20,000 common

C. $40,000 preferred; $0 common

D. $6,000 preferred; $34,000 common

2.Rick Company's net sales decreased from $90,000 in year 1 to $45,000 in year 2, and its cost of goods sold decreased from $30,000 in year 1 to $20,000 in year 2. Vertical analysis based on sales would show which decreases in cost of goods sold for the two periods (rounded to the nearest tenth of a percent)?

A. 225% and 300%

B. 44.4% and 33.3%

C. 300% and 225%

D. 33.3% and 44.4%

3. In a common-size income statement, selling expenses are 55%. This means that they're 55% of

A. net income.

B. gross profit.

C. net sales.

D. net profit.

4. Ryan Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days, and an accounts receivable turnover of 82 days. Ryan's cash conversion cycle is _______ days.

A. 103

B. 9

C. 43

D. 121