ACC 291 Week 4 Individual Practice Chapter 14

ACC 291 Week 4 Individual Practice Chapter 14 Question 1 Comparisons of data within a company are an example of the following comparative basis: Industry averages. Intracompany. Intercompany. Both intracompany and intercompany. Question 2

In horizontal analysis, each item is expressed as a percentage of the: base year amount. net income amount. stockholdersâ&#x20AC;&#x2122; equity amount. total assets amount. Question 3 In vertical analysis, the base amount for depreciation expense is generally: fixed assets. net sales. depreciation expense in a previous year. gross profit. Question 4 The data in the schedule is a display of vertical analysis because the individual asset items are expressed as a percentage of total assets. The following schedule is a display of what type of analysis?

Amount Current assets

Percent \$200,000

Property, plant, and equipment 75% Total assets

\$800,000

25% 600,000 100%

ratio analysis horizontal analysis differential analysis vertical analysis Question 5 Sammy Corporation reported net sales of \$300,000, \$330,000, and \$360,000 in the years, 2009, 2010, and 2011, respectively. If 2009 is the base year, what is the trend percentage for 2011? 77% 108% 120% 130%

Question 6 Which of the following measures is an evaluation of a firmâ&#x20AC;&#x2122;s ability to pay current liabilities? Acid-test ratio Current ratio Both acid-test ratio and current ratio None of the above Question 7 A measure useful in evaluating the efficiency in managing inventories is: a. inventory turnover. b. average days to sell inventory. c. Both (a) and (b). d. None of the above. Question 8 Financial statement information follows as of the end of each year.

2011 Inventory

2010

\$54,000

Current assets Total assets Net sales

\$48,000

81,000 382,000

784,000

Cost of goods sold

106,000 326,000 697,000

306,000

277,000

Compute the days in inventory for 2011. 64.4 days 6 days 60.8 days 24 days Question 9 Financial statement information follows as of the end of each year. 2011 Inventory

\$54,000

Current assets Total assets

2010

81,000 382,000

\$48,000 106,000 326,000

Current liabilities Total liabilities

27,000

36,000

102,000

88,000

Compute the current ratio for 2011. 3.75:1 1.26:1 .80:1 3.0:1 Question 10 Financial statement information follows as of the end of each year. 2011

2010

Inventory

\$54,000

\$48,000

Net sales

784,000

697,000

Cost of goods sold Net income

306,000

134,000

277,000

90,000

Compute the profit margin ratio for 2011. 18.1% 37.9%

17.1% 5.9% Question 11 Financial statement information follows as of the end of each year. 2011 Stockholdersâ&#x20AC;&#x2122; equity Net income

2010 \$280,000

\$238,000

134,000

90,000

22,000

18,000

Tax expense Interest expense

12,000

12,000

Dividends paid to preferred stockholders 20,000 20,000 Dividends paid to common stockholders 15,000 10,000 Compute the return on common stockholdersâ&#x20AC;&#x2122; equity for 2011. 47.9% 44.0%

51.7% 40.7% Question 12 Financial statement information follows as of the end of each year. 2011 Stockholdersâ&#x20AC;&#x2122; equity Net income

2010 \$280,000

\$238,000

134,000

90,000

22,000

18,000

Tax expense Interest expense

12,000

12,000

Dividends paid to preferred stockholders 20,000 20,000 Dividends paid to common stockholders 15,000 10,000 Compute the times interest earned for 2011. 13.0 times 14.0 times 11.2 times

65.3 times Question 13 In reporting discontinued operations, the income statement should show in a special section: a. gains and losses on the disposal of the discontinued segment. b. gains and losses from operations of the discontinued segment. c. Both (a) and (b). d. Neither (a) nor (b). Question 14 Scout Corporation has income before taxes of \$400,000 and an extraordinary loss of \$100,000. If the income tax rate is 25% on all items, the income statement should show income before extraordinary items and extraordinary items, respectively, of \$325,000 and \$100,000. \$300,000 and \$75,000.

\$325,000 and \$75,000. \$300,000 and \$100,000. Question 15 Which situation below might indicate a company has a low quality of earnings? The same accounting principles are used each year. The company is continually reporting pro forma income numbers. Revenue is recognized when earned. Maintenance costs are expensed as incurred.

Visit the link below for further Homework http://www.tutorialgator.com/

Acc 291 week 4 individual practice chapter 14