Question : 41. International Corporation leased a building from Domestic Company. The 10-year : 1224954

 

 

41. International Corporation leased a building from Domestic Company. The 10-year lease is recorded as a capital lease. The annual payments are $10,000 and the recorded cost of the asset is $67,100. The straight-line method is used to calculate depreciation. Which of the following statements is true? A. Depreciation expense of $6,710 will be recorded each year by International Corporation.B. Depreciation expense of $10,000 will be recorded each year by International Corporation.C. No depreciation expense will be recorded by International Corporation.D. No rent expense will be recorded by International Corporation.

 

42. Rating Corporation’s balance sheet showed the following amounts for its liability accounts: Accounts Payable, $100,000; Bonds Payable, $150,000; Taxes Payable, $20,000; and Deferred Income Tax Liability, $5,000. Total assets was $500,000. The debt to assets ratio is: A. 0.20B. 0.35C. 1.22D. 0.55

 

43. Pointe Corporation’s balance sheet showed the following amounts for its liability accounts: Notes payable, $130,000; Bonds Payable, $800,000; Accrued Expenses, $20,000; and Deferred Income Tax Liability, $120,000. Total assets was $1,470,000. The debt to assets ratio is: A. 0.27B. 1.37C. 0.65D. 0.73

 

44. IBD Corporation has Current Assets of $200,000, Long Term Assets of $300,000, Current Liabilities of $100,000, Long Term Liabilities of $200,000, Paid in Capital of $150,000, and Retained Earnings of $50,000. Calculate IBD’s debt to assets ratio? A. .40 B. .60 C. .20 D. .90

 

45. Britt CompanySelected data from Britt Company’s financial statements are provided below: 

 

2012

2011

2010

Cash

$  22,000

$  14,000

$    7,000

Accounts receivable

42,000

16,000

57,200

Inventory

22,000

83,000

50,000

Prepaid expenses

23,000

18,000

20,800

Total current assets

109,000

131,000

135,000

 

 

 

 

Total current liabilities

$  65,000

$  72,000

 

Net credit sales

221,000

326,000

 

Cost of goods sold

168,000

299,000

 

Net cash flows from operating activities

16,000

29,000

 

 

 

 

 

Refer to the selected financial data for Britt Company. Britt’s current ratio for 2012 is: A. 0.60.B. 0.99.C. 1.34.D. 1.68.

 

46. If a company’s current ratio is 3.0 and the current liabilities are $100,000, then the current assets are: A. $400,000.B. $300,000.C. $103,000.D. $  33,333.

 

47. Faultless, Inc.Selected data from Faultless’ financial statements are provided below:

 

2012

2011

Current Assets

$6,000

$3,000

Long-Term Assets

7,000

4,000

Current Liabilities

2,000

3,000

Long-Term Liabilities

7,000

0

Stockholders’ Equity

4,000

4,000

Net Sales

9,500

9,100

Net Income

1,000

500

 

 

 

Refer to the financial information presented for Faultless, Inc. What is the debt to assets ratio for Faultless in the year 2011 and 2012? A. 0.692 in 2011 and 0.429 in 2012.B. 0.429 in 2011 and 0.692 in 2012.C. 2.250 in 2011 and 0.750 in 2012.D. 0.750 in 2011 and 2.250 in 2012.

 

48. Refer to the financial information presented for Faultless, Inc. What is the company’s current ratio for 2012? A. 0.3B. 3.0C. 1.0D. 0.9

 

49. If current assets amount to $150, total assets are $350, current liabilities are $65, and total liabilities are $100, then the current ratio is: A. 3.50.B. 3.03.C. 2.31.D. 2.12.

 

50. Bassell Enterprises has long-term assets of $800, current liabilities of $500, and long-term liabilities of $600. If the current ratio is 2.5, then current assets must be: A. $2,000.B. $1,250.C. $   625.D. $   200.

 

 

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