Question :
61. Which of the following statements about the capital acquisitions ratio : 1228464
61. Which of the following statements about the capital acquisitions ratio is correct?
A. A high ratio indicates less need for outside financing of property, plant and equipment.
B. The ratio is computed by dividing cash flow from operations by the average net property, plant and equipment.
C. A low ratio may indicate a failure to update property, plant and equipment which can limit a company’s ability to compete in the future.
D. The ratio is comparable across industries.
62. Which of the following statements about the capital acquisitions ratio is incorrect?
A. The ratio is computed by dividing cash flow from operations by cash paid for property, plant and equipment.
B. Because the need for investment in property, plant and equipment differs dramatically across industries, a firm’s ratio should only be compared with its prior years’ ratio or with firms in the same industry.
C. A high ratio indicates more need for outside financing of current and future purchases of property, plant and equipment.
D. It increases when an account receivable is collected.
63. During 2010, Eva’s Enterprises cash paid for property, plant and equipment was $755 million and cash flow from operations was $5,968 million. The average property, plant and equipment from the comparative balance sheets were $6,094 million. Compute Eva’s Enterprises capital acquisitions ratio for 2010.
A. 1.0
B. 5.3
C. 7.9
D. 6.0
64. During 2010, Edna Enterprises had a capital acquisitions ratio of 7.9. During 2010, Carlos’ Corporation had a capital acquisitions ratio of 3.6. The amount of cash flow from operations was $5,968,000 for Edna’s and $5,054,000 for Carlos. Which of the following statements is incorrect?
A. Edna used less cash for investments in property, plant and equipment during 2010 than did Carlos.
B. Edna has less need for external financing of its investments in property, plant and equipment indicated by its higher capital acquisitions ratio compared to Carlos.
C. Edna invested approximately $755,000 in property, plant and equipment during 2010.
D. Carlos invested approximately $182,000 in property, plant and equipment during 2010.
65. A company’s 2010 income statement reported total sales revenue of $1,200,000; accounts receivable increased by $25,000 and the unearned revenue account decreased $15,000 during 2010. How much cash was collected from customers during 2010?
A. $1,225,000
B. $1,160,000
C. $1,175,000
D. $1,185,000
66. Bold Company’s 2010 income statement reported total sales revenue of $250,000. During 2010, accounts receivable decreased by $20,000 and accounts payable increased $10,000. How much cash was collected from customers during 2010?
A. $230,000
B. $270,000
C. $250,000
D. $280,000
67. The financial statements for World Company show the following:
Cost of goods sold, $725,000.
How much cash was paid to suppliers?
A. $731,000
B. $736,000
C. $719,000
D. $714,000
68. Madison Company had sales of $154,000. Additional information from the balance sheet is below:
How much cash was collected from customers?
A. $148,000
B. $150,000
C. $154,000
D. $160,000
69. Amanda Company reported income tax expense of $250,000. Beginning income taxes payable was $30,000, while ending income taxes payable was $25,000, and accounts payable decreased $10,000. How much cash was paid for taxes?
A. $280,000
B. $255,000
C. $245,000
D. $265,000
70. Aaron Inc. reported operating expenses during 2011 of $765,000 (including $80,000 of depreciation expense). Prepaid expenses increased $25,000 while accrued liabilities increased $43,000. How much cash was paid for operating expenses during 2011?
A. $702,000
B. $622,000
C. $667,000
D. $703,000
