Question :
121. The following information pertains to Carlton Company. Assume that all : 1239376
121. The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
Cash and short-term investments
$ 40,000
Accounts receivable (net)
25,000
Inventory
20,000
Property, plant and equipment
210,000
Total assets
$295,000
Liabilities and Stockholders’ Equity
Current liabilities
60,000
Long-term liabilities
85,000
Stockholders’ equity-common
150,000
Total liabilities and stockholders’ equity
$295,000
Income Statement
Net sales
$ 85,000
Cost of goods sold
45,000
Gross margin
40,000
Operating expenses
15,000
Interest expense
5,000
Net income
$ 20,000
Number of shares of common stock
6,000000
Market price of common stock
$20
Total dividends paid
$5,400
Cash provided by operations
$30,000
What is the price earnings ratio for this company? Round your answer to one decimal point. A. 8.0 timesB. 2.5 timesC. 4.0 timesD. 6.0 times
122. The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
Cash and short-term investments
$ 40,000
Accounts receivable (net)
30,000
Inventory
25,000
Property, plant and equipment
215,000
Total Assets
$310,000
Liabilities and Stockholders’ Equity
Current liabilities
60,000
Long-term liabilities
95,000
Stockholders’ equity-common
155,000
Total Liabilities and stockholders’ equity
$310,000
Income Statement
Sales
$ 90,000
Cost of goods sold
45,000
Gross margin
45,000
Operating expenses
20,000
Net income
$ 25,000
Number of shares of common stock
6,000000
Market price of common stock
$40
Dividends per share
1.00
Cash provided by operations
$40,000
What is the rate earned on total assets for this company? A. 8.1%B. 6.8%C. 10.5%D. 16.1%
123. The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
Cash and short-term investments
$ 40,000
Accounts receivable (net)
30,000
Inventory
25,000
Property, plant and equipment
215,000
Total Assets
$310,000
Liabilities and Stockholders’ Equity
Current liabilities
60,000
Long-term liabilities
95,000
Stockholders’ equity-common
155,000
Total Liabilities and stockholders’ equity
$310,000
Income Statement
Sales
$ 90,000
Cost of goods sold
45,000
Gross margin
45,000
Operating expenses
20,000
Net income
$ 25,000
Number of shares of common stock
6,000000
Market price of common stock
$40
Dividends per share
1.00
Cash provided by operations
$40,000
What is the price earnings ratio for this company? A. 6.0 timesB. 4.2 timesC. 8.0 timesD. 9.6 times
124. Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are A. a substitute for sound judgment.B. useful analytical measures.C. enough information for analysis, industry information is not needed.D. unnecessary for analysis, but reaction is better.
125. The following information pertains to Auburn Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
Cash and short-term investments
$ 40,000
Accounts receivable (net)
30,000
Inventory
25,000
Property, plant and equipment
280,000
Total Assets
$375,000
Liabilities and Stockholders’ Equity
Current liabilities
60,000
Long-term liabilities
95,000
Stockholders’ equity-common
220,000
Total Liabilities and stockholders’ equity
$375,000
Income Statement
Sales
$ 90,000
Cost of goods sold
45,000
Gross margin
45,000
Operating expenses
10,000
Net income
$ 35,000
Number of shares of common stock
6,000000
Market price of common stock
$20
Dividends per share
1.00
Cash provided by operations
$40,000
What is the rate earned on stockholders’ equity? Round answer to a single decimal point. A. 9.3%B. 15.9%C. 24.0%D. 40.9%
126. Corporate annual reports typically do not contain which of the following? A. management discussion and analysisB. SEC statement expressing an opinionC. accompanying foot notesD. auditor’s report
127. The independent auditor’s report does which of the following? A. describes which financial statements are covered by the auditB. gives the auditor’s opinion regarding the fairness of the financial statementsC. summarizes what the auditor didD. states that the financial statements were presented on time
128. The purpose of an audit is to A. determine whether or not a company is a good investment.B. render an opinion on the fairness of the statements.C. determine whether or not a company complies with corporate social responsibility.D. determine whether or not a company is a good credit risk.
129. Which of the following is required by the Sarbanes-Oxley Act of 2002? A. A price-earnings ratio.B. A report on internal control.C. A vertical analysis.D. A common-sized statement.
130. All of the following are typically included in the Management’s Discussion and Analysis in annual reports except: A. explanations of any significant changes between the current and prior years’ financial statements.B. management’s assessment of liquidity.C. journal entries.D. off-balance-sheet arrangements
