Question : Exhibit 2-1 The tax schedule for corporate income shown in the : 1325650

 

Exhibit 2-1

The tax schedule for corporate income is shown in the table below:

 

Taxable Income OverNot OverTax Rate

$                0              $       50,000              15.00%

50,000         75,000              25.00%

75,000       100,000              34.00%

100,000       335,000              39.00%

335,000       500,000              34.00%

10,000,000  15,000,00035.00%

15,000,000  18,333,33338.00%

18,333,333……………35.00%

69.Refer to Exhibit 2-1. Pale Rider Corporation reports taxable income of $500,000 in 2004. What was their tax liability for the year?

a.$56,100

b.$91,650

c.$170,000

d.$200,000

71.Refer to Exhibit 2-1. Big Diesel Incorporated reports taxable income of $200,000 in 2004. What was the average tax rate they paid for the year?

a.25.00%

b.29.40%

c.30.63%

d.34.00%

72.Refer to Exhibit 2-1. Big Diesel Incorporated currently predicts taxable income of $200,000 for the next year. If this is their actual income, what will be the tax liability for Big Diesel?

a.$45,250

b.$56,500

c.$61,250

d.$91,650

73.What ratio measures the ability of the firm to satisfy its short term obligations as they come due?

a.Activity ratio

b.Times interest earned ratio

c.Current ratio

d.Inventory turnover ratio

74.The asset to equity ratio for a firm is 1.5, and the firm has total assets of $6,000,000. Last year, net income for the firm was $250,000, and the earnings per share for the firm was reported as $0.50. If the current price-to-earnings ratio is 20, what is the current market-to-book ratio for the firm?

a.0.60

b.0.80

c.1.00

d.1.25

75.The asset to equity ratio for a firm is 1.5, and the firm has total assets of $3,000,000. Last year, net income for the firm was $250,000, and the earnings per share for the firm was reported as $0.50. What is the current book value per share for the firm?

a.$2

b.$4

c.$6

d.$8

76.Which financial ratio measures the effectiveness of management in generating returns to common stockholders with its available assets?

a.Gross profit margin

b.Return on equity

c.Return on assets

d.Current ratio

77.When is the return on assets equal to the return on equity?

a.When the current ratio of the firm equals 1.

b.When the firm issues equal amounts of long term debt and common stock.

c.When the firm issues no dividends for a given time period.

d.When the firm only issues equity to finance its borrowing.

78.Consider the following working capital information for Full House Corporation:

 

Year20032004

Accounts Receivable$    0              $100

Inventory$100$100

Accounts Payable$    0$  50

 

What was the effect on free cash flow for the firm this past year?

a.Increase of $100

b.Increase of $150

c.Decrease of $50

d.Decrease of $100

79.A firm reports net income of $500,000 for 2004. The most recent balance sheet for the reports retained earnings of $2,000,000. The firm will pay out 25% of net income as dividends. What will the new balance be for retained earnings?

a.$1,875,000

b.$2,125,000

c.$2,375,000

d.$2,500,000

80.A firm reports a current ratio of 2 and a quick ratio of 1.2. The firm has total current assets of $4,000. If the firm reports cost of goods sold at $25,000 for the given year, what is the average age of their inventory?

a.12.35 days

b.15.63 days

c.18.24 days

d.23.36 days

 

 

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