111. Which one of the following is not a characteristic generally evaluated in ratio analysis? A. liquidityB. profitabilityC. solvencyD. marketability   112. Short-term creditors are typically most interested in assessing A. marketability.B. profitability.C. operating results.D. solvency.   113. A common measure of liquidity is A. ratio of net sales to assets.B. dividends per share of common stock.C. receivable turnover.D. profit margin.   114. In 2012 Robert Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. They had […]

  18) What is the Machining Department’s allocation of both service departments respectively if their complete reciprocated cost were $375,000 for Plant Maintenance and $100,000 for Data Processing? A) $112,275 and $74,468 B) $131,250 and $84,375 C) $281,250 and $12,500 D) $337,500 and $200,000 E) $337,500 and $12,500   19) What is the Capping Department’s total cost if both service departments are allocated using the […]

  34) On July 31, Ace Electronics paid a cash dividend of $0.50 per share to common shareholders. There were 80,000 shares issued at the time. Ace held 5,000 shares of treasury stock. Ace also paid a dividend to preferred shareholders. There were 1,000 shares of 6%, $100 par preferred stock outstanding. What was the total dollar amount of the cash dividend?   35) The […]

  11. Joe’s Auto Company uses the accrual basis of accounting. Which situation violates the matching principle during 2012?  A. Sales commissions are charged to expense in 2012 on all sales revenue recognized in 2012 even though some of the commissions have not been paid. B. Insurance expense is recognized for the total cost of a 1-year policy purchased in May, 2012. C. Rent expenses are recognized as expenses […]

  153. Which of the following assets is not depreciated?  A. Store fixtures. B. Computers. C. Land. D. Buildings. E. Equipment. 154. Which of the following does not require an adjusting entry at year-end?  A. Accrued interest on notes payable. B. Supplies used during the period. C. Cash invested by  stockholder. D. Accrued wages. E. Expired portion of prepaid insurance. 155. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. What […]

  Objective 7.5   1) Which of the following can be a reason for a favorable price variance for direct materials? A) a decrease in the price of materials due to an oversupply of materials B) an unexpected increase in the price of materials C) less amount of material used during production than planned for actual output D) workers taking less time to produce the […]

    21. The following items were reported on the balance sheets and income statement for Online Co.:  Accounts receivable, December 31, 2011 $   250,000 Accounts receivable, December 31, 2012 225,000 Sales–2012 1,000,000     What amount would be reported in the operating activities section of Online’s statement of cash flows for collections from customers under the direct method, assuming that all sales are on credit? A. $   […]

  112.The Goldfarb Company manufactures and sells toasters. Each toaster sells for $23.75 and the variable cost per unit is $16.25. Goldfarb’s total fixed costs are $25,000, and budgeted sales are 8,000 units. What is the contribution margin per unit?     A. $7.50. B. $16.25. C. $23.75. D. $60,000. E. $1.25. 113.Leeks Company’s product has a contribution margin per unit of $11.25 and a contribution margin ratio of 22.5%. What […]

    61.Gibbs Corporation makes indoor gas fireplaces. A standard fireplace includes unit-level materials, labor, and overhead costs. In addition, the company incurs product-level engineering and advertising costs. The sales staff is paid a 5% commission on each fireplace sold. A sales representative has been in contact with a building developer who wants to buy 20 fireplaces only if he can buy them at amount […]

    127.Here is the trial balance for McLeary Corporation:   McLeary Corporation Trial Balance January 31, 20×7 Cash $3,000   Accounts Receivable 2,000   Art Supplies 3,000   Office Supplies 5,000   Prepaid Rent 7,000   Prepaid Insurance 5,000   Art Equipment 5,000   Office Equipment 3,000   Accounts Payable   $10,000 Common Stock   5,000 Retained Earnings   5,000 Dividends ?   Advertising […]