Question :
131.Comparative financial statements for Cross, Inc. shown below:
December 31
Assets2014 2013
Current : 1302945
131.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’ current ratio at the end of 2014?
A.1.9
B.2.8
C.0.4
D.0.3
132.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’ acid-test ratio at the end of 2014?
A.2.8
B.0.7
C.2.7
D.1.9
133.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 the company’s debt-to-equity ratio for 2014?
A.0.571
B.1.065
C.0.364
D.0.018
134.Swanson Company has a current ratio of 2.1 and the following assets on December 31, 2014:
Cash $ 98,500
Accounts receivable, net 499,700
Inventory 960,000
Prepaid expenses 23,100
Equipment, net 2,284,800
Total assets $3,866,100
How much are the company’s current liabilities on December 31, 2014
A.$285,000
B.$742,000
C.$753,000
D.$1,841,000
135.Chua Company has current liabilities totaling $1,500,000 and the following assets on December 31 of the current year:
Cash $ 300,000
Accounts receivable, net 600,000
Inventory 960,000
Prepaid expenses 25,000
Equipment, net 2,200,000
Total assets $4,085,000
How much is the company’s acid-test ratio on December 31?
A.0.20
B.0.60
C.1.26
D.1.24
136.Chua Company has has a current ratio of 2.5 and the following assets on December 31, 2014:
Cash $ 300,000
Accounts receivable, net 600,000
Inventory 960,000
Prepaid expenses 25,000
Equipment, net 2,200,000
Total assets $4,085,000
The company paid an account payable of $175,000 immediately on January 1, 2015. What effect did this have on the current ratio?
A.An increase to 2.95
B.There was no effect since both cash and accounts payable changed by the same amount.
C.An increase to 2.50
D.A decrease to 3.26
137.Chua Company had a current ratio of 2.5 to 1 on December 31, 2014. On that date, the company’s assets were as follows:
Cash $ 100,000
Accounts receivable, net 600,000
Inventory 960,000
Prepaid expenses 25,000
Equipment, net 2,200,000
Total assets $3,885,000
What impact will the declaration of a cash dividend by Chua have on its current ratio?
A.An increase in the current ratio
B.A decrease in the current ratio
C.No efffect on the current ratio
D.There is not enough information provided to determine the answer.
138.Chua Company had a current ratio of 2.5 to 1 on December 31, 2014. On that date, the company’s assets were as follows:
Cash $ 100,000
Accounts receivable, net 600,000
Inventory 960,000
Prepaid expenses 25,000
Equipment, net 2,200,000
Total assets $3,885,000
What impact will the sale of inventory to customers for cash have on Chua’s debt-to-equity ratio?
A.An increase in the debt-to-equity ratio
B.A decrease in the debt-to-equity ratio
C.No efffect on the debt-to-equity ratio
D.There is not enough information provided to determine the answer.
