81. An unsecured bond is the same as a A. debenture bond. B. zero coupon bond. C. term bond. D. bond indenture. 82. A legal document that indicates the name of the issuer, the face value of the bond and such other data is called A. trading on the equity. B. convertible bond. C. a bond debenture. D. a bond certificate. 83. Bonds that are subject to retirement at a stated dollar amount prior […]
91. In contrast to the total product and variable cost concepts used in setting seller’s prices, the target cost approach assumes that: A. a markup is added to total costB. selling price is set by the marketplaceC. a markup is added to variable costD. a markup is added to product cost 92. McClelland Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale […]
21) A payment packet of documents: A) reports the arrival of items purchased. B) is sent by the purchasing department to the vendor selling the item. C) identifies the need for merchandise and begins the purchasing process. D) includes the invoice, receiving report and purchase order. 22) When approving an invoice for payment: A) the receiving department should examine the payment packet to […]
151. Under U.S. GAAP, sometimes a firm sells or otherwise disposes of a major division or segment of its business during the year or contemplates its sale or disposal within a foreseeable time after the end of the accounting period. If so, it must disclose separately any income, gains, and losses related to that division or segment. The separate disclosure appears in the […]
71. The basis for both U.S. GAAP and IFRS requirements for income tax accounting for financial reporting purposes focuses on which of the following financial reporting objectives? A. recognizing the amount of taxes payable in the current year, only. B. recognizing deferred tax assets and deferred tax liabilities for the future income tax consequences of temporary differences, only. C. recognizing the amount of taxes payable in the […]
137. Below is a table for the present value of $1 at compound interest. Year 6% 10% 12% 1 .943 .909 .893 2 .890 .826 .797 3 .840 .751 .712 4 .792 .683 .636 5 .747 .621 .567 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 1 .943 .909 .893 […]
6) Dual pricing is widely used as it reduces the goal-congruence problems associated with a pure cost-plus based transfer-pricing method. 7) Opportunity costs represent the cash flows directly associated with the production and transfer of the products and services. 8) If the product sold between divisions has no intermediate market, the opportunity cost of supplying the product internally is the variable cost […]
81. On December 31, 2010, Avery Corporation paid $10,000 for next year’s insurance policy. This transaction should be recorded as follows by Avery: A. Option A B. Option B C. Option C D. Option D 82. Mama June Pizza Company sold land costing $39,000 for $51,000 cash. Which of the following statements concerning the land sale is correct? A. The land account was credited for $51,000. B. The revenue account was […]
121. In contribution margin analysis, the quantity factor is computed as: A. the increase or decrease in the number of units sold multiplied by the planned unit sales price or unit cost B. the increase or decrease in unit sales price or unit cost multiplied by the planned number of units to be sold C. the increase or decrease in the number of units sold multiplied by […]
91. Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at […]
111.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
The income tax rate is 54%. How would you best describe the company’s use of financial leverage in 2014?
A.The company is highly leveraged and is using leverage well to generate a high return for stockholders.
B.The company is poorly leveraged.
C.The company is highly leveraged, but the leverage has a negative impact on stockholders.
D.The company has no financial leverage.
112.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s inventory turnover for 2014?
A.7.32 times
B.26.70 times
C.49.86 times
D.13.67 times
113.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s accounts receivable turnover for 2014?
A.29.41 times
B.37.31 times
C.12.31 times
D.0.03 times
114.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
What is the company’s days’ sales in receivables for 2014?
A.29.41 days
B.37.31 days
C.12.41 days
D.8.06 days
115.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s day’s sales in inventory for 2014?
A.7.32 days
B.26.70 days
C.49.86 days
D.13.67 days
116.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s current ratio at the end of 2014?
A.0.92
B.1.09
C.1.06
D.1.34
117.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s quick ratio at the end of 2014?
A.1.09
B.1.03
C.0.57
D.0.50
118.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s debt-to-equity ratio at the end of 2014?
A.0.35
B.2.87
C.2.41
D.0.74
119.Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash$ 3,000 $ 800
Accounts receivable8,5006,000
Inventory12,0008,200
Prepaid expenses 1,400 900
Total current assets24,90015,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net 64,000 47,000
Total assets$192,500 $186,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$ 11,000 $ 12,000
Other current liabilities 11,800 3,200
Total current liabilities22,800 15,200
Long-term debt 120,000 128,000
Total liabilities 142,800 143,200
Stockholders’ equity:
Common stock15,00015,000
Additional paid-in capital20,000 20,000
Retained earnings 14,700 8,000
Total stockholders’ equity 49,700 43,000
Total liabilities and stockholders’ equity $192,500 $186,200
Year Ended December 31
20142013
Sales$250,000 $ 230,000
Cost of goods sold 164,000 142,300
Gross margin86,000 87,700
Operating expenses 64,000 54,000
Operating income22,000 33,700
Interest expense 7,500 5,900
Earnings before income taxes 14,500 27,800
Income taxes 7,800 7,140
Net earnings$ 6,700 $ 20,660
How much is Bent Stew’s times interest earned for 2014?
A.2.93 times
B.37.31 times
C.0.34 times
D.0.89 times
120.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
Using horizontal analysis, how much is Cross, Inc.’s percentage change in accounts receivable from 2013 to 2014?
A.4.9% increase
B.5.2% increase
C.1.1% increase
D.1.2% decrease
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