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.
