Question : 91.Waylon Appliances a large applicance retailer with more than 800 : 1302941

 

 

91.Waylon Appliances is a large applicance retailer with more than 800 stores in the U.S. The following financial information relates to fiscal 2013 and 2014.

 

(In Millions)20142013

Sales$42,286$40,185

Cost of goods sold33,00031,000

Accounts receivable820960

Merchandise inventory2,9002,700

 

How much is the company’s days’ sales in inventory for 2014 and 2013, respectively?

A.32.08, 31.79 days

B.41.52, 41.91 days

C.11.38, 11.48 days

D.2.13; 3.15 days

 

92.Brick Works, Inc. had a current ratio of 1.5 to 1 on December 31 of the current year. On that date, the company’s assets were as follows:

 

Cash              $   100,000

Accounts receivable, net              800,000

Inventory              960,000

Prepaid expenses              25,000

Equipment, net              2,600,000

Total assets              $4,485,000

 

What impact will collecting $56,000 due from customers have on Brick Work’s inventory turnover?

A.It will increase.

B.It will decrease.

C.It will have no effect.

D.The amount of current liabilities is needed to determine the answer.

 

93.A company has a high debt-to-equity ratio. What other amount will most likely be high for the company?

A.The company’s level of risk

B.The company’s assets

C.Earnings per share

D.Net income

 

94.What does times interest earned measure?

A.The ability of a company to make interest payments on its debt

B.The ability of a company to pay its interest-bearing debt obligations

C.The increase in interest expense as a result of new debt obligations acquired during the period

D.The average interest rate incurred on the company’s debt

 

95.What does a quick ratio of less than one typically indicate?

A.The company does not have enough quick assets to settle its current liabilities.

B.The company is unprofitable.

C.The company has a very high debt-to-equity ratio.

D.All of the answer choices are correct.

 

96.RT Enterprises has a current ratio of less than one, and a very high debt-to-equity ratio. Which of the following will management of other companies most likely be reluctant to do?

I.Sign an agreement with RT Enterprises to become a major supplier

II.Sell RT Enterprises goods on credit

III.Expand capacity to better serve the needs of RT Enterprises

              I and II

              II and III

              I and III

              I, II, and III

 

97.Which of the following is not a communication by a company’s management that may help alleviate investors and creditors concerns of the company’s financial statements?

A.News articles

B.Notes to their financial statements

C.Assessment of vendors and customers

D.Press releases

 

98.Cramer Cooling Company reported the following results for the year just ended:

 

Cash$50,000

Accounts receivable45,000

Prepaid insurance10,000

Inventory51,300

 

Cramer Cooling’s acid-test ratiois 1.25. How much are the company’s current liabilities?

A.$76,000

B.$84,000

C.$125,040

D.$117,040

 

99.Planter Zone’s working capital is $32,500 and its current assets are $85,100. How much is the company’s current ratio?

A.0.72

B.1.62

C.2.62

D.1.38

 

100.Seekers Limited reported the following results for the year just ended:

 

Cash$  30,000

Accounts receivable  90,000

Inventory150,000

 

The company’s quick ratio was 0.90 for the year. How much are the company’s current liabilities?

A.$120,000

B.$133,333

C.$266,667

D.$108,000