Week 10 question

1.Kingbird, Inc. has the following Income Statement (in millions):

KINGBIRD, INC. Income Statement For the Year Ended December 31, 2023
Net Sales	$164
Cost of Goods Sold	94
Gross Profit	70
Operating Expenses	50
Net Income	$  20

Using vertical analysis, what percentage is assigned to net sales?

74%

100%

174%

Can’t be computed

2. Marin Inc. has the following income statement (in millions):

MARIN INC. Income Statement For the Year Ended December 31, 2023
Net Sales	$400
Cost of Goods Sold	256
Gross Profit	144
Operating Expenses	68
Net Income	$  76

Using vertical analysis, what percentage is assigned to net income?

19%

30%

100%

81%

3. Given the following data for the Sunland Company:

Current liabilities	$590
Long-term debt	480
Common stock	891
Retained earnings	739
Total liabilities & stockholders’ equity	$2700

How would common stock appear on a common size balance sheet?

33%

25%

35%

85%

4. Blue Spruce Corp. had a balance in the Accounts Receivable account of $788000 at the beginning of the year and a balance of $842000 at the end of the year. Net credit sales during the year amounted to $5705000. The average collection period of the accounts receivable in terms of days was

53.7 days.

41.5 days.

104.3 days.

52.1 days.

5. Bramble Corp. had net credit sales of $13010000 and cost of goods sold of $10512000 for the year. The average inventory for the year amounted to $2190000. The inventory turnover for the year is

5.9 times.

1.1 times.

4.8 times.

1.2 times.

6. Metlock, Inc. had net credit sales of $9022000 and cost of goods sold of $5322000 for the year. The average inventory for the year amounted to $1341000. The average days in inventory during the year was approximately

92 days.

73 days.

54 days.

68 days.

7. Pina Colada Corp. had net income of $1615000 and paid dividends to common stockholders of $403750 in 2022. The weighted average number of shares outstanding in 2022 was 468350 shares. Pina Colada Corp. common stock is selling for $30 per share on the NASDAQ. Pina Colada Corp. price-earnings ratio is

3.4 times.

4.0 times.

8.7 times.

8.0 times.

8. Tamarisk, Inc. had net income of $1623000 and paid dividends to common stockholders of $405750 in 2022. The weighted average number of shares outstanding in 2022 was 1038720 shares. Tamarisk, Inc.'s common stock is selling for $40 per share on the NASDAQ. Tamarisk, Inc.'s payout ratio for 2022 is

25%.

$4 per share.

16%.

4%.

9. Wildhorse Co. reported the following on its income statement:

Income before income taxes	$803000
Income tax expense	134000
Net income	$669000

An analysis of the income statement revealed that interest expense was $73000. Wildhorse Co.'s times interest earned was

12 times.

7 times.

14 times.

11 times.

10. The current assets of Nash's Trading Post, LLC are $299000. The current liabilities are $130000. The current ratio expressed as a proportion is

$130000 ÷ $299000.

0.43:1.

2.30:1.

230%.

11. The following information pertains to Novak Corp. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets
Cash and short-term investments	$  53200
Accounts receivable (net)	39400
Inventory	31700
Property, plant and equipment	219000
Total Assets	$343300
Liabilities and Stockholders’ Equity
Current liabilities	$  52100
Long-term liabilities	81200
Stockholders’ equity—common	210000
Total Liabilities and Stockholders’ Equity	$343300
Income Statement
Sales revenue	$113000
Cost of goods sold	69600
Gross profit	43400
Operating expenses	24500
Net income	$ 18900
Number of shares of common stock	9100
Market price of common stock	$23
Dividends per share on common stock	1.4
Cash provided by operations	$50000

What is the return on assets for this company?

5.5%

12.6%

9.0%

14.6%

12. The following information pertains to Tamarisk, Inc. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets
Cash and short-term investments	$  54200
Accounts receivable (net)	30000
Inventory	29700
Property, plant and equipment	216000
Total Assets	$329900
Liabilities and Stockholders’ Equity
Current liabilities	$  50900
Long-term liabilities	85700
Stockholders’ equity—common	193300
Total Liabilities and Stockholders’ Equity	$329900
Income Statement
Sales revenue	$115000
Cost of goods sold	73500
Gross profit	41500
Operating expenses	17500
Net income	$ 24000
Number of shares of common stock	14200
Market price of common stock	$28
Dividends per share on common stock	5.8
Cash provided by operations	$40000

What is the return on common stockholders’ equity for this company?

12.4%

15.2%

18.0%

21.5%

13. The following information is available for Swifty Corporation:

	2022	2021
Accounts receivable	$   363000	$   350000
Inventory	284000	345000
Net credit sales	3315450	2615000
Cost of goods sold	1822000	859000
Net income	325000	182000

The accounts receivable turnover for 2022 is

4.7 times.

9.5 times.

9.3 times.

9.1 times.

14. The following amounts were taken from the financial statements of Nash's Trading Post, LLC:

	2022	2021
Total assets	$801000	$1010000
Net sales	720000	651000
Gross profit	352000	321000
Net income	90550	110000
Weighted average number of          common shares outstanding	85000	80000
Market price of common stock	$40	$30

The return on assets for 2022 is

5%.

9%.

11%.

10%.

15. Novak's by the Tracks has the following partial balance sheet:

NOVAK'S BY THE TRACKS Balance Sheet (partial)
Stockholders’ equity:
Common stock	$6024000
Retained earnings	2024000
Total paid-in capital and retained earnings	8048000
Accumulated other comprehensive income	804800
Total stockholders’ equity:	$8852800

What effect will the accumulated other comprehensive income have on comprehensive income?

Increase of $804800 in comprehensive income.

Decrease of $8048000 in comprehensive income.

Increase of $8852800 in comprehensive income.

No effect on comprehensive income.

16. Carla Vista Co. reported net sales of $410000, $451000, and $557600 in the years 2021, 2022, and 2023, respectively. If 2021 is the base year, what is the trend percentage for 2023?

136%

74%

124%

110%

17. Assume the following cost of goods sold data for a company:

2023	$1351680
2022	1223000
2021	1024000

If 2021 is the base year, what is the percentage increase in cost of goods sold from 2021 to 2023?

19%

32%

11%

132%

18. If Year 1 cost of goods sold equals $820, Year 2 cost of goods sold equals $950, and Year 3 cost of goods sold equals $600, the percentage to be assigned for Year 1 in a trend analysis, assuming that Year 1 is the base year, is

137%.

73%.

100%.

116%.

19. If Year 1 sales equal $890, Year 2 sales equal $1246, and Year 3 sales equal $1160, the percentage to be assigned for Year 2 in a trend analysis, assuming that Year 1 is the base year, is

130%.

71%.

93%.

140%.

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