Question 1

Selected year-end data for the Brayer Company are presented below:  The company has no prepaid expenses and inventories remained unchanged during the year.Based on these data,the company's inventory turnover ratio for the year was closest to:
A) 1.20 times.
B) 1.67 times.
C) 2.33 times.
D) 2.40 times.

Accepted Answer

The answer of Selected year-end data for the Brayer Company...

Question 2

Frabine Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000 and the ending accounts receivable balance was $18,000.The company's accounts receivable turnover was closest to:
A) 4.69 times.
B) 8.33 times.
C) 9.38 times.
D) 10.71 times.

Accepted Answer

Accounts receivable turnover = Sales on credit / Average accounts receivable

Average accounts receivable = (Beginning accounts receivable + Ending accounts receivable) / 2

Average accounts receivable = ($14,000 + $18,000) / 2 = $16,000

Accounts receivable turnover = $150,000 / $16,000 = 9.38 times (rounded to two decimal places)

Therefore, the closest answer choice is C: 9.38 times.

Question 3

Eastham Company's accounts receivable were $600,000 at the beginning of the year and $800,000 at the end of the year.Cash sales for the year were $300,000.The accounts receivable turnover for the year was 5 times.Eastham Company's total sales for the year were:
A) $800,000.
B) $1,300,000.
C) $3,300,000.
D) $3,800,000.

Accepted Answer

The answer of Eastham Company's accounts receivable were $600,000 at...

Question 4

Andy Inc.has $15,000 in cash,$38,000 in current receivables,$18,000 in inventories,$4,000 in prepaid expenses and $40,000 in current liabilities.The company's current ratio is closest to:
A) 0.95 to 1.
B) 1.33 to 1.
C) 1.43 to 1.
D) 1.88 to 1.

Accepted Answer

The answer of Andy Inc.has $15,000 in cash,$38,000 in current...

Question 5

Harwichport Company has a current ratio of 3.5 to 1 and an acid-test ratio of 2.8 to 1.Current assets equal $175,000 of which $5,000 consists of prepaid expenses.Harwichport Company's inventory must be:
A) $30,000.
B) $35,000.
C) $40,000.
D) $50,000.

Accepted Answer

Current assets - prepaid expenses = $175,000 - $5,000 = $170,000Current ratio = current assets / current liabilities = 3.5Current liabilities = current assets / 3.5 = $170,000 / 3.5 = $48,571.43Acid-test ratio = (current assets - inventory) / current liabilities = 2.8Inventory = current assets - (current liabilities * acid-test ratio) = $170,000 - ($48,571.43 * 2.8) = $30,000

Question 6

Grapp Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $18,000 and the ending accounts receivable balance was $16,000.The company's average collection period (age of receivables)was closest to:
A) 44.92 days.
B) 47.73 days.
C) 50.54 days.
D) 95.46 days.

Accepted Answer

To find the average collection period, we need to divide the total number of days in the period by the accounts receivable turnover ratio.

Accounts receivable turnover ratio = Sales on Account / Average accounts receivable

Average accounts receivable = (Beginning accounts receivable balance + Ending accounts receivable balance) / 2

Average accounts receivable = ($18,000 + $16,000) / 2 = $17,000

Accounts receivable turnover ratio = $130,000 / $17,000 = 7.65

Average collection period = 365 days / 7.65 = 47.73 days (rounded to nearest hundredth)

Therefore, the best answer is B.

Question 7

Erack Company has $15,000 in cash,$4,000 in marketable securities,$38,000 in current receivables,$18,000 in inventories,and $40,000 in current liabilities.The company's acid-test (quick)ratio is closest to:
A) 0.95 to 1.
B) 1.33 to 1.
C) 1.43 to 1.
D) 1.88 to 1.

Accepted Answer

The acid-test (quick) ratio measures a company's ability to pay off its current liabilities with its most liquid assets, excluding inventory.

The formula for acid-test ratio is:

( Cash + Marketable Securities + Current Receivables ) / Current Liabilities

Plugging in the values:

(15000 + 4000 + 38000) / 40000 = 1.57

This means that for every dollar of current liabilities, the company has $1.57 in quick assets that can be used to pay them off.

The closest answer choice is C) 1.43 to 1, which is within a reasonable range of 1.57.

Question 8

Paul Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's current ratio is closest to:
A) 0.44 to 1.
B) 0.80 to 1.
C) 1.24 to 1.
D) 1.78 to 1.

Accepted Answer

The answer of Paul Company has $17,000 in cash,$3,000 in...

Question 9

Grave Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000 and the ending accounts receivable balance was $10,000.The company's average collection period (age of receivables)was closest to:
A) 24.33 days.
B) 29.20 days.
C) 34.07 days.
D) 58.40 days.

Accepted Answer

The answer of Grave Company had $150,000 in sales on...

Question 10

Eral Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's acid-test (quick)ratio is closest to:
A) 0.44 to 1.
B) 0.80 to 1.
C) 1.24 to 1.
D) 1.78 to 1.

Accepted Answer

The answer of Eral Company has $17,000 in cash,$3,000 in...

Question 11

Ben Company has the following data for the year just ended:  Ben Company's current liabilities were:
A) $35,000.
B) $43,750.
C) $50,400.
D) $63,000.

Accepted Answer

Current liabilities include accounts payable, accrued expenses, and short-term loans. Adding all these up, we get $43,750.

Question 12

Erambo Company has $11,000 in cash,$6,000 in marketable securities,$27,000 in current receivables,$8,000 in inventories,and $51,000 in current liabilities.The company's acid-test (quick)ratio is closest to:
A) 0.53 to 1.
B) 0.75 to 1.
C) 0.86 to 1.
D) 1.02 to 1.

Accepted Answer

The acid-test (quick) ratio is calculated by dividing the sum of cash, marketable securities, and current receivables by current liabilities.

Acid-test ratio = (cash + marketable securities + current receivables) / current liabilities

Plugging in the given values, we get:

Acid-test ratio = (11000 + 6000 + 27000) / 51000 = 0.86

Therefore, the closest option to the company's acid-test (quick) ratio is C) 0.86 to 1.

Question 13

Frantic Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to:
A) 5.00 times.
B) 8.13 times.
C) 10.00 times.
D) 13.00 times.

Accepted Answer

The answer of Frantic Company had $130,000 in sales on...

Question 14

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?
A) Prepayment of $50,000 of next year's rent.
B) Refinancing $50,000 of short-term debt with long-term debt.
C) Acquisition of land valued at $50,000 by issuing new common shares.
D) Purchase of $50,000 of marketable securities for cash.

Accepted Answer

Refinancing $50,000 of short-term debt with long-term debt decreases current liabilities, thereby increasing working capital.

Question 15

Fracus Company had $100,000 in sales on account last year.The beginning accounts receivable balance was $14,000 and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to:
A) 3.33 times.
B) 6.25 times.
C) 6.67 times.
D) 7.14 times.

Accepted Answer

The accounts receivable turnover can be calculated as:

Accounts Receivable Turnover = Sales on Account / Average Accounts Receivable

Where Average Accounts Receivable is the average of beginning and ending accounts receivable balances.

Sales on Account = $100,000

Beginning Accounts Receivable = $14,000

Ending Accounts Receivable = $16,000

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2 = ($14,000 + $16,000) / 2 = $15,000

Accounts Receivable Turnover = $100,000 / $15,000 = 6.67 times

Therefore, the closest answer choice is C) 6.67 times.

Question 16

Granger Company had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000.The company's average collection period (age of receivables)was closest to:
A) 20.28 days.
B) 28.39 days.
C) 36.50 days.
D) 56.78 days.

Accepted Answer

The average accounts receivable is ($10,000 + $18,000) / 2 = $14,000. The accounts receivable turnover is $180,000 / $14,000 = 12.857. The average collection period is 365 / 12.857 ≈ 28.39 days.

Question 17

Marcy Corporation's current ratio is currently 1.75 to 1.The firm's current ratio cannot fall below 1.5 to 1 without violating agreements with its bondholders.If current liabilities are presently $250 million,the maximum new short-term debt that can be issued to finance an equivalent amount of inventory expansion is:
A) $41.67 million.
B) $62.50 million.
C) $125.00 million.
D) $375.00 million.

Accepted Answer

The answer of Marcy Corporation's current ratio is currently 1.75...

Question 18

At the end of the year just completed,Orem Company's current liabilities totalled $75,000,and its long-term liabilities totalled $225,000.Working capital at year-end was $100,000.If the company's debt-to-equity ratio is 0.30 to 1,total long-term assets must equal:
A) $1,000,000.
B) $1,125,000.
C) $1,225,000.
D) $1,300,000.

Accepted Answer

First, we can calculate the total liabilities by adding the current and long-term liabilities:
$75,000 + $225,000 = $300,000.

Next, we can use the debt-to-equity ratio to calculate the total equity:
Debt-to-equity ratio = 0.30 to 1.
This means that for every $1 of equity, the company has $0.30 of debt.
So, we can set up the following equation:
Debt/Equity = 0.30
Debt = 0.30 x Equity
$300,000 = 0.30 x Equity
Equity = $1,000,000.

Now, we can use the working capital formula to calculate the total current assets:
Working capital = Current assets - Current liabilities
$100,000 = Current assets - $75,000
Current assets = $175,000.

Finally, we can use the following formula to calculate the total assets:
Total Assets = Total Liabilities + Total Equity
Total Assets = $300,000 + $1,000,000
Total Assets = $1,300,000.

Therefore, the correct answer is B) $1,125,000.

Question 19

Harris Company,a retailer,had cost of goods sold of $290,000 last year.The beginning inventory balance was $26,000 and the ending inventory balance was $24,000.The company's inventory turnover was closest to:
A) 5.80 times.
B) 11.15 times.
C) 11.60 times.
D) 12.08 times.

Accepted Answer

Inventory turnover = Cost of goods sold / Average inventory

Average inventory = (Beginning inventory + Ending inventory) / 2

Average inventory = ($26,000 + $24,000) / 2 = $25,000

Inventory turnover = $290,000 / $25,000 = 11.6 times (rounded to two decimal places)

Therefore, the closest value to the company's inventory turnover is option C) 11.60 times.

Question 20

Draban Company's working capital is $38,000 and its current liabilities are $59,000.The company's current ratio is closest to:
A) 0.36 to 1.
B) 0.64 to 1.
C) 1.64 to 1.
D) 2.55 to 1.

Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given that working capital is current assets minus current liabilities, we can find current assets as $38,000 + $59,000 = $97,000. Therefore, the current ratio is $97,000 / $59,000 = 1.64 to 1.

Quiz 13: How Well Am I Doing Statement of Cash Flows

Selected year-end data for the Brayer Company are presented below: The company has no prepaid expenses and inventories remained unchanged during the year.Based on these data,the company's inventory turnover ratio for the year was closest to:

Frabine Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000 and the ending accounts receivable balance was $18,000.The company's accounts receivable turnover was closest to:

Eastham Company's accounts receivable were $600,000 at the beginning of the year and $800,000 at the end of the year.Cash sales for the year were $300,000.The accounts receivable turnover for the year was 5 times.Eastham Company's total sales for the year were:

Andy Inc.has $15,000 in cash,$38,000 in current receivables,$18,000 in inventories,$4,000 in prepaid expenses and $40,000 in current liabilities.The company's current ratio is closest to:

Harwichport Company has a current ratio of 3.5 to 1 and an acid-test ratio of 2.8 to 1.Current assets equal $175,000 of which $5,000 consists of prepaid expenses.Harwichport Company's inventory must be:

Grapp Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $18,000 and the ending accounts receivable balance was $16,000.The company's average collection period (age of receivables) was closest to:

Erack Company has $15,000 in cash,$4,000 in marketable securities,$38,000 in current receivables,$18,000 in inventories,and $40,000 in current liabilities.The company's acid-test (quick) ratio is closest to:

Paul Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's current ratio is closest to:

Grave Company had $150,000 in sales on account last year.The beginning accounts receivable balance was $14,000 and the ending accounts receivable balance was $10,000.The company's average collection period (age of receivables) was closest to:

Eral Company has $17,000 in cash,$3,000 in marketable securities,$36,000 in current receivables,$24,000 in inventories,and $45,000 in current liabilities.The company's acid-test (quick) ratio is closest to:

Ben Company has the following data for the year just ended: Ben Company's current liabilities were:

Erambo Company has $11,000 in cash,$6,000 in marketable securities,$27,000 in current receivables,$8,000 in inventories,and $51,000 in current liabilities.The company's acid-test (quick) ratio is closest to:

Frantic Company had $130,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to:

Starrs Company has current assets of $300,000 and current liabilities of $200,000.Which of the following transactions would increase its working capital?

Fracus Company had $100,000 in sales on account last year.The beginning accounts receivable balance was $14,000 and the ending accounts receivable balance was $16,000.The company's accounts receivable turnover was closest to:

Granger Company had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000.The company's average collection period (age of receivables) was closest to:

At the end of the year just completed,Orem Company's current liabilities totalled $75,000,and its long-term liabilities totalled $225,000.Working capital at year-end was $100,000.If the company's debt-to-equity ratio is 0.30 to 1,total long-term assets must equal:

Harris Company,a retailer,had cost of goods sold of $290,000 last year.The beginning inventory balance was $26,000 and the ending inventory balance was $24,000.The company's inventory turnover was closest to:

Draban Company's working capital is $38,000 and its current liabilities are $59,000.The company's current ratio is closest to: