ACCOUNTING

Question 12

1.

Chicago Co. is interested in purchasing a machine that would improve its operational efficiency. The cost is $200,000 with an estimated residual value of $20,000 and a useful life of eight years. Cash inflows are expected to increase by $40,000 a year. The company’s minimum rate of return is 10 percent. The present value of $1 for eight years at 10 percent is 0.467, and the present value of an annuity of $1 at 10 percent and eight years is 5.335.

 

The net present value of the project is

a.
$74,520.
b.
$120,100.
c.
$93,400.
d.
$22,740.

1 points   

Question 13

1.

Seattle, Inc., is contemplating a project that costs $190,000. Expectations are that annual cash revenues will be $70,000 and annual expenses (including depreciation) will total $30,000. The project has a six-year useful life and a residual value of $40,000. Assume Seattle Inc. uses straight line method of depreciation.

The project’s payback period is

a.
2.14 years.
b.
2.31 years.
c.
2.77 years.
d.
2.92 years.

1 points   

Question 14

1.

The primary purpose of the statement of cash flows is to provide information

a.
about a company’s cash receipts and cash payments during an accounting period.
b.
about a company’s investing and financing activities during an accounting period.
c.
regarding a company’s financial position at the end of an accounting period.
d.
regarding the results of operations for a period of time.

1 points   

Question 15

1.

Royer Corporation engaged in this transaction:

 

Purchased inventory with cash.

 

Indicate which section, if any,  the above transaction would appear in, or relate to, on a statement of cash flows.

a.
Does not represent a cash flow
b.
Investing activities section
c.
Operating activities section
d.
Financing activities section

1 points   

Question 16

1.

Royer Corporation engaged in this transaction:

 

Sold buildings and equipment for cash.

 

Indicate which section, if any,  the above transaction would appear in, or relate to, on a statement of cash flows.

a.
Operating activities section
b.
Investing activities section
c.
Financing activities section
d.
Does not represent a cash flow

1 points   

Question 17

1.

If the indirect method is used to prepare a statement of cash flows, which of the following would be added to net income to arrive at net cash flows from operating activities?

a.
Decrease in accounts payable
b.
Increase in inventory
c.
Decrease in prepaid expenses
d.
Increase in accounts receivable

1 points   

Question 18

1.

Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements—Increase in Accounts Receivable—indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

a.
Add to net income to arrive at net cash flows from operating activities
b.
Subtract from net income to arrive at net cash flows from operating activities
c. Would be included in the investing activities section of the Statement of Cash Flows
d.
Not used to adjust net income to calculate net cash flows from operating activities

1 points   

Question 19

1.

Use this information to answer the following question.

Northbrook Corporation is preparing a statement of cash flows. The following transactions occurred during the year:

1. Sold machinery for $9,000 cash.

2. Purchased a building for $80,000 cash.

3. Issued $70,000 worth of stock to acquire an airplane.

4. Converted long-term bonds by issuing $100,000 worth of stock.

5. Declared and paid a $10,000 cash dividend.

Transaction 2 would be found on the statement of cash flows in the

a.
cash flows from operating activities section.
b.
cash flows from financing activities section.
c.
cash flows from investing activities section.
d.
noncash investing and financing transactions section.

1 points   

Question 20

1.

In a common-size balance sheet for a retail store, the 100 percent amount is for

a.
merchandise inventory.
b.
total property, plant, and equipment.
c.
total assets.
d.
total current assets.

1 points   

Question 21

1.

Use the following information to answer questions 21 – 25.

Following are the financial statements for Jasmin Corporation for the year ended December 31, 2009. Assume that all balance sheet amounts represent both average and ending figures.

 

Jasmin Corporation
Balance Sheet
December 31, 2009
Assets
Cash   $  20,000
Marketable securities   30,000
Accounts receivable   50,000
Inventory   100,000
Long-term receivables   35,000
Property, plant, and equipment      65,000
Total assets   $300,000
 
Liabilities and Stockholders’ Equity
Current liabilities   $100,000
Long-term liabilities   60,000
Stockholders’ equity     140,000
Total liabilities and stockholders’ equity   $300,000

 

Jasmin Corporation
Income Statement
For the Year Ended December 31, 2009
Net sales $400,000
Cost of goods sold   240,000
Gross margin $160,000
Operating expenses     40,000
Income before income taxes $120,000
Income taxes expense    30,000
Net income $ 90,000

 

What is the current ratio for this corporation? Round your answer to two decimal places.

a.
1.00 times
b.
1.54 times
c.
1.70 times
d.
2.00 times

1 points   

Question 22

1.

What is the receivable turnover for Jasmin corporation? Round your answer to one decimal place.

a.
1.8 times
b.
4.8 times
c.
6.0 times
d.
8.0 times

1 points   

Question 23

1.

 

What is the inventory turnover for Jasmin Corporation? Round your answer to one decimal place.

a.
1.2 times
b.
1.6 times
c.
2.4 times
d.
4.0 times

1 points   

Question 24

1.

What is the return on assets for Jasmin Corporation? Round your answer to one decimal place.

a.
30.0 percent
b.
40.0 percent
c.
53.3 percent
d.
75.0 percent

1 points   

Question 25

1.

What is the profit margin for Jasmin Corporation? Round your answer to one decimal place.

a.
22.5 percent
b.
30.0 percent
c.
40.0 percent
d.
53.3 percent

Order now and get 10% discount on all orders above $50 now!!The professional are ready and willing handle your assignment.

ORDER NOW »»