Question :
121.Comparative financial statements for Cross, Inc. shown below:
December 31
Assets2014 2013
Current : 1302944
121.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
How much is Cross, Inc.’s gross margin percentage for 2014?
A.19.4%
B.72.0%
C.28.8%
D.28.0%
122.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
There were 200,000 shares of common stock outstanding during both years. How much is earnings per share for Cross, Inc. in 2014?
A.$4.00
B.$0.05
C.$85.03
D.$5.71
123.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
Which one of the following is revealed by horizontal analysis of Cross, Inc. during the 2014 and 2013 years?
A.Current assets are increasing at a faster rate than total assets.
B.Sales are increasing faster than cost of goods sold.
C.Sales are increasing faster than net income.
D.Cash is increasing faster than accounts payable.
124.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
The market price per share of Cross, Inc.’s common stock is $103.00 at the end of 2014. Throughout both 2013 and 2014, there are 500,000 shares of common stock outstanding. How much is Cross, Inc.’s price-earnings ratio at the end of 2014?
A.$1.60
B.$64.46
C.$0.21
D.$1.66
125.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
How much is return on total assets for Cross, Inc. for 2013?
A.68.2%
B.69.9%
C.68.9%
D.14.5%
126.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
How much is return on common stockholders’ equity for Cross, Inc. for 2014?
A.107.2%
B.93.3%
C.68.2%
D.2.0%
127.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
How much is inventory turnover for Cross, Inc. for 2014?
A.8.26 times
B.126.7 times
C.0.79 times
D.2.9 times
128.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
How much is days’ sales in inventory for Cross, Inc. for 2014?
A.2.9 days
B.510 days
C.34.8 days
D.126.7 days
129.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
How much is accounts receivable turnover for Cross, Inc. for 2014?
A.3.1 times
B.28.0 times
C.119.8 times
D.5.6 times
130.Comparative financial statements for Cross, Inc. are shown below:
December 31
Assets2014 2013
Current assets:
Cash$ 89,103 $ 68,203
Accounts receivable142,000135,000
Inventory96,70885,694
Prepaid expenses 21,203 5,118
Total current assets349,014294,015
Property, plant and equipment, net 822,576 718,144
Total assets$1,171,590 $1,012,159
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 85,443 $ 62,394
Other current liabilities 38,112 33,507
Total current liabilities123,555 95,901
Long-term debt 302,430 290,324
Total liabilities425,985386,225
Stockholders’ equity:
Common stock600,000600,000
Retained earnings 145,605 25,934
Total stockholders’ equity 745,605 625,934
Total liabilities and stockholders’ equity $1,171,590 $1,012,159
Year Ended December 31
20142013
Net sales $17,005,852 $13,809,585
Cost of goods sold 12,250,257 9,825,614
Gross margin 4,755,595 3,983,971
Operating expense 3,585,657 3,400,258
Operating income 1,169,938 583,713
Interest expense 28,500 27,300
Earnings before tax 1,141,438 556,413
Income taxes 342,431 166,924
Net income $ 799,007 $ 389,489
What is the most likely explanation for the change in Cross’ accounts receivable turnover from 2013 to 2014?
A.The company is collecting amounts due from customers more agressively.
B.The company’s sales are primarily cash sales which do not result in receivables.
C.The company makes primarily credit sales and has very easy credit terms.
D.None of these answer choices are possible explanations.
