Question 1

Calculate the value of total equity given the following information: total debt ratio = 0.52; total assets = $25,000.
A) $11,000
B) $11,250
C) $11,500
D) $11,750
E) $12,000

Accepted Answer

The total debt ratio is defined as total debt divided by total assets. If the total debt ratio is 0.52, it means that 52% of the company's assets are financed through debt, leaving 48% (100% - 52%) financed through equity. Therefore, the value of total equity can be calculated as 48% of total assets, which is 0.48 * $25,000 = $12,000.

Question 2

An Edmonton ﬁrm has a debt-equity ratio of 62 %, a total asset turnover of 1.39, and a proﬁt margin of 7.8 %. The total equity is $672,100. What is the amount of the net income?
A) $118,048
B) $119,600
C) $120,202
D) $121,212
E) $124,097

Accepted Answer

To find the net income, first calculate total assets using the debt-equity ratio: Total Assets = Total Equity + Total Debt. With a debt-equity ratio of 0.62, Total Debt = 0.62 * Total Equity = 0.62 * $672,100 = $416,902. Total Assets = $672,100 + $416,902 = $1,089,002. Then, calculate sales using total asset turnover: Sales = Total Asset Turnover * Total Assets = 1.39 * $1,089,002 = $1,512,712.78. Finally, calculate net income using the profit margin: Net Income = Profit Margin * Sales = 0.078 * $1,512,712.78 = $118,048.20, which rounds to $118,048.

Question 3

Bentley and Moore has net working capital of $6,900, net ﬁxed assets of $86,100, sales of $156,000, and current liabilities of $41,700. How many dollars' worth of sales are generated from
Every $1 in total assets?
A) $1.13
B) $1.16
C) $1.22
D) $1.25
E) $1.27

Accepted Answer

The answer of Bentley and Moore has net working capital...

Question 4

Atlasta Limo Corp. has an average collection period of 36.5 days. Sales are $300,001. What is the average investment in receivables?
A) $4,441
B) $8,219
C) $10,000
D) $30,000
E) $36,500

Accepted Answer

The answer of Atlasta Limo Corp. has an average collection...

Question 5

A ﬁrm has a total debt ratio of .47. This means that that ﬁrm has 47 cents in debt for every:
A) $1.00 in equity.
B) $1.00 in total sales.
C) $1.00 in current assets.
D) $0.53 in equity.
E) $0.53 in total assets.

Accepted Answer

The total debt ratio of 0.47 means that 47% of the firm's total assets are financed by debt. Therefore, the remaining 53% is financed by equity. For every $0.53 in equity, there is $0.47 in debt.

Question 6

The following statement of ﬁnancial position and statement of comprehensive income should be used.   How many dollars of sales are being generated by every $1 that Woodburn has in total assets($ in
Thousands)? (Use 2015 assets)
A) $1.01
B) $1.07
C) $1.09
D) $1.12
E) $1.16

Accepted Answer

The answer of The following statement of ﬁnancial position and...

Question 7

During the year, Doug's Bakery decreased its accounts receivable by $50, increased its inventory by $100, and decreased its accounts payable by $50. For these three accounts, the ﬁrm has a net:
A) $200 use of cash.
B) $100 use of cash.
C) $0 use of cash.
D) $100 source of cash.
E) $200 source of cash.

Accepted Answer

Decreasing accounts receivable by $50 is a source of cash, increasing inventory by $100 is a use of cash, and decreasing accounts payable by $50 is a use of cash. The net effect is a $100 use of cash ($50 source - $100 use - $50 use = -$100).

Question 8

How many additional assets can RTF, Inc. acquire if the company issues an additional $1,000 in common stock($ in millions)?
A) $1,000
B) $1,190
C) $1,500
D) $1,780
E) Cannot be determined from the information given.

Accepted Answer

To determine how many additional assets RTF, Inc. can acquire, we need to use the equation:
Assets = Liabilities + Equity

We are given the balance sheet for RTF, Inc. before issuing any additional common stock:

Assets = $7,500 million
Liabilities = $2,500 million
Equity = $5,000 million

We are also told that if the company issues an additional $1,000 million in common stock, equity will increase to $6,000 million.

Using the equation above, we can solve for the new total assets:
$6,000 million = $2,500 million + New Assets
New Assets = $3,500 million

Therefore, the additional assets RTF, Inc. can acquire is:
New Assets - Original Assets = $3,500 million - $7,500 million = -$4,000 million

This means that RTF, Inc. cannot acquire any additional assets by issuing $1,000 million in common stock. However, this calculation assumes that all of the additional $1,000 million in common stock is issued as new equity. If some or all of the proceeds are used to pay off liabilities, then RTF, Inc. could potentially acquire additional assets. However, we cannot determine this from the information given.

Question 9

Calculate depreciation expense given the following information. Interest expense $2,000; times interest earned 5; cash coverage ratio 5.5.
A) $1,000
B) $1,200
C) $1,400
D) $1,600
E) $1,800

Accepted Answer

The answer of Calculate depreciation expense given the following information....

Question 10

A Kinston ﬁrm has net working capital of $2,580, net ﬁxed assets of $13,120, sales of $22,580, and current liabilities of $1,610. How many dollars' worth of sales are generated from every $1 in total
Assets?
A) $1.27
B) $1.30
C) $1.67
D) $1.72
E) $1.75

Accepted Answer

The answer of A Kinston ﬁrm has net working capital...

Question 11

Given the following information, calculate sales value. Total asset turnover 0.80; total liabilities $5,000; total equity $5,000.
A) $8,600
B) $8,000
C) $10,600
D) $11,600
E) $12,600

Accepted Answer

Total Asset Turnover = Sales / Total Assets
0.80 = Sales / (Total Liabilities + Total Equity)
0.80 = Sales / (5,000 + 5,000)

Sales = 0.80 * 10,000
Sales = $8,000

Question 12

Freda's, Inc. has sales of $3,200, current liabilities of $900, total assets of $3,000, and net working capital of $500. How many dollars' worth of sales are generated from every $1 in net ﬁxed assets?
A) $.91
B) $1.07
C) $1.67
D) $2.00
E) $2.29

Accepted Answer

To find the sales generated from every $1 in net fixed assets, first calculate net fixed assets: Total assets ($3,000) minus current assets ($900 + $500) equals $1,600. Then, divide sales ($3,200) by net fixed assets ($1,600) to get $2.00.

Question 13

Determine the value of cash given the following information: cash ratio = 2; cash equivalents = $600 ; current liabilities = $800.
A) $1,000
B) $1,100
C) $1,200
D) $1,300
E) $1,400

Accepted Answer

Cash ratio = Cash and Cash Equivalents / Current Liabilities
2 = (Cash + $600) / $800
$1,400 = Cash + $600 
Cash = $1,400 - $600 = $800
Therefore, the value of cash is $800, so the correct answer is A) $1,000 (cash + cash equivalents).

Question 14

Calculate sales given the following data. Total ﬁxed assets $400,000; long-term liabilities $155,000; total liabilities $280,000; total shareholders' equity $320,000; net working capital turnover 20.
A) $1,500,000
B) $1,700,000
C) $1,900,000
D) $2,100,000
E) $2,250,000

Accepted Answer

The answer of Calculate sales given the following data. Total...

Question 15

Calculate net income given the following information: tax rate = 30%; times interest earned = 10.75 times; sales = $4,500; cost of goods sold = $1,600; general and administrative expenses = $750.
A) $965
B) $1,065
C) $1,165
D) $1,265
E) $1,365

Accepted Answer

The answer of Calculate net income given the following information:...

Question 16

Swenson Motors has total debt of $682,400 and a debt-equity ratio of .65. What is the value of the total assets?
A) $1,049,846
B) $1,364,800
C) $1,414,141
D) $1,578,002
E) $1,732,246

Accepted Answer

The answer of Swenson Motors has total debt of $682,400...

Question 17

A Waterloo ﬁrm with net income of $500,000 pays 48% of net income out in dividends. If the ﬁrm has 150,000 shares of common stock outstanding, what is the dividend paid per share of stock?
A) $0.30
B) $1.44
C) $1.60
D) $1.73
E) $3.33

Accepted Answer

Step 1: Calculate the total dividend payout
- Net income = $500,000
- Dividend payout ratio = 48%
- Total dividends = Net income x Dividend payout ratio 
= $500,000 x 48% 
= $240,000

Step 2: Calculate the dividend per share
- Dividend per share = Total dividends / Number of shares 
= $240,000 / 150,000 
= $1.60 per share

Therefore, the dividend paid per share of stock is $1.60, which is choice C.

Question 18

A Quebec City ﬁrm has a debt-equity ratio of .65. From this, you can determine that the ﬁrm has _____ in assets for every $1 in equity.
A) $.54
B) $.65
C) $1.54
D) $1.65
E) $2.54

Accepted Answer

The debt-equity ratio is defined as total debt divided by total equity. Therefore, if the debt-equity ratio is .65, it means that for every $1 in equity, the firm has $0.65 in debt. The total assets of the firm are equal to the sum of the equity and debt. Therefore, the assets-to-equity ratio is:

Assets/Equity = (Debt + Equity)/Equity = 1 + Debt/Equity = 1 + 0.65 = 1.65

This means that the firm has $1.65 in assets for every $1 in equity.

Question 19

Calculate total asset value given the following information: ROA = 5%; Total equity = $600,000 and ROE = 8%.
A) $960,000
B) $1,100,000
C) $1,200,000
D) $1,300,000
E) $1,400,000

Accepted Answer

Total asset value can be calculated using the formula for Return on Assets (ROA) = Net Income / Total Assets. Similarly, Return on Equity (ROE) = Net Income / Total Equity. Given ROE = 8% and Total Equity = $600,000, we can find Net Income = 0.08 * $600,000 = $48,000. Using the ROA = 5%, we rearrange the formula to find Total Assets = Net Income / ROA = $48,000 / 0.05 = $960,000.

Question 20

Calculate net income given the following information: tax rate = 30%; accounts receivable = $900; receivable turnover = 5 times; inventory = $500; inventory turnover = 3.20 times; operating
Expenses = $700; interest expense = $200.
A) $1,400
B) $1,465
C) $1,565
D) $1,665
E) $1,765

Accepted Answer

The answer of Calculate net income given the following information:...

Quiz 3: Working With Financial Statements

Calculate the value of total equity given the following information: total debt ratio = 0.52; total assets = $25,000.

An Edmonton ﬁrm has a debt-equity ratio of 62 %, a total asset turnover of 1.39, and a proﬁt margin of 7.8 %. The total equity is $672,100. What is the amount of the net income?

Bentley and Moore has net working capital of $6,900, net ﬁxed assets of $86,100, sales of $156,000, and current liabilities of $41,700. How many dollars' worth of sales are generated from Every $1 in total assets?

Atlasta Limo Corp. has an average collection period of 36.5 days. Sales are $300,001. What is the average investment in receivables?

A ﬁrm has a total debt ratio of .47. This means that that ﬁrm has 47 cents in debt for every:

The following statement of ﬁnancial position and statement of comprehensive income should be used. How many dollars of sales are being generated by every $1 that Woodburn has in total assets($ in Thousands) ? (Use 2015 assets)

During the year, Doug's Bakery decreased its accounts receivable by $50, increased its inventory by $100, and decreased its accounts payable by $50. For these three accounts, the ﬁrm has a net:

How many additional assets can RTF, Inc. acquire if the company issues an additional $1,000 in common stock($ in millions) ?

Calculate depreciation expense given the following information. Interest expense $2,000; times interest earned 5; cash coverage ratio 5.5.

A Kinston ﬁrm has net working capital of $2,580, net ﬁxed assets of $13,120, sales of $22,580, and current liabilities of $1,610. How many dollars' worth of sales are generated from every $1 in total Assets?

Given the following information, calculate sales value. Total asset turnover 0.80; total liabilities $5,000; total equity $5,000.

Freda's, Inc. has sales of $3,200, current liabilities of $900, total assets of $3,000, and net working capital of $500. How many dollars' worth of sales are generated from every $1 in net ﬁxed assets?

Determine the value of cash given the following information: cash ratio = 2; cash equivalents = $600 ; current liabilities = $800.

Calculate sales given the following data. Total ﬁxed assets $400,000; long-term liabilities $155,000; total liabilities $280,000; total shareholders' equity $320,000; net working capital turnover 20.

Calculate net income given the following information: tax rate = 30%; times interest earned = 10.75 times; sales = $4,500; cost of goods sold = $1,600; general and administrative expenses = $750.

Swenson Motors has total debt of $682,400 and a debt-equity ratio of .65. What is the value of the total assets?

A Waterloo ﬁrm with net income of $500,000 pays 48% of net income out in dividends. If the ﬁrm has 150,000 shares of common stock outstanding, what is the dividend paid per share of stock?

A Quebec City ﬁrm has a debt-equity ratio of .65. From this, you can determine that the ﬁrm has _____ in assets for every $1 in equity.

Calculate total asset value given the following information: ROA = 5%; Total equity = $600,000 and ROE = 8%.

Calculate net income given the following information: tax rate = 30%; accounts receivable = $900; receivable turnover = 5 times; inventory = $500; inventory turnover = 3.20 times; operating Expenses = $700; interest expense = $200.