acct 202 first exam

1.

award:

1.61 out of 1.61 points

  

Ozols Corporation’s most recent income statement appears below:  

														Sales (all on account)	$713,000
														Cost of goods sold	305,000
														Gross margin	408,000
														Selling and administrative expense	175,000
														Net operating income	233,000
														Interest expense	64,000
Net Income before taxes	169,000
Income taxes	60,000
														Net income	$109,000

   The gross margin percentage is closest to:

  2.award: 1.61 out of 1.61 points  

Crandler Company’s net income last year was $65,000. The company paid preferred dividends of $22,500 and its average common stockholders’ equity was $500,000. The company’s return on common stockholders’ equity for the year was closest to:

  3.

award: 0 out of 1.61 points

  

The average stockholders’ equity for Horn Co. last year was $2,800,000. Included in this figure was $280,000 of preferred stock. Preferred dividends were $32,000. If the return on common stockholders’ equity was

12.

5% for the year, net income was:

 4.award: 0 out of 1.61 points  

Artist Company’s net income last year was $540,000. The company has 152,000 shares of common stock and 41,900 shares of preferred stock outstanding. There was no change in the number of common or preferred shares outstanding during the year. The company declared and paid dividends last year of $1.80 per share on the common stock and $0.80 per share on the preferred stock. The earnings per share of common stock is closest to:

  5.award: 1.61 out of 1.61 points  

Archer Company had net income of $86,800 last year. The company has 6,800 shares of common stock and 4,300 shares of preferred stock outstanding. There was no change in the number of common or preferred shares outstanding during the year. Preferred dividends were $2 per share. The earnings per share of common stock was:

  6.award: 1.61 out of 1.61 points  

The following data have been taken from your company’s financial records for the current year:   

Earning per share	$30
Dividend per share	$8
Market price per share	$3			90
Book value per share	$225

   

The price-earnings ratio is:

  7.award: 0 out of 1.61 points  

Last year the return on total assets in Jeffrey Company was 8.00%. The total assets were 3 million at the beginning of the year and 3.25 million at the end of the year. The tax rate was 30%, interest expense totaled $115 thousand, and sales were $5.3 million. Net income for the year was:

  9.award: 0 out of 1.61 points  

The following account balances have been provided for the end of the most recent year:    

													Total assets	$180,000
		Total stockholder’s equity	$150,000
Total common stock (5,000 shares)	$50,000
Total preferred stock (1,000 shares)	$10,000

  

 

10.

award: 0 out of 1.61 points  

Delatrinidad Corporation’s net income last year was $7,748,000. The dividend on common stock was $

13.

4 per share and the dividend on preferred stock was $3.2 per share. The market price of common stock at the end of the year was $54.5 per share. Throughout the year, 480,000 shares of common stock and 240,000 shares of preferred stock were outstanding. The dividend payout ratio is closest to:

 

11.

award: 1.61 out of 1.61 points  

Last year, Shadow Corporation’s dividend on common stock was $

21.

75 per share and the dividend on preferred stock was $

20.

86 per share. The market price of common stock at the end of the year was $75.00 per share. The dividend yield ratio is closest to:

  12.award: 1.61 out of 1.61 points  

Hagerman Corporation’s most recent income statement appears below:     

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income125,000    Interest expense

  Net income

$625,000
375,000
250,000
	125,000
3	1,	2		50
													Net income before taxes	93,	750
													Income taxes (30%)	28,125
$65,625

   The beginning balance of total assets was $330,000 and the ending balance was $204,000. The return on total assets is closest to:

  13.award: 0 out of 1.61 points  

Excerpts from Lasso Corporation’s most recent balance sheet appear below:     

 

 

 

$280,000  

760,000  

286,000  

760,000  

  Total stockholder’s equity

													Year 2														Year 1
Preferred stock		$280,000
Common stock			760,000
			Additional paid-in capital–common stock		286,000
			Retained earnings	690,000
$1,186,000	$1,116,000

   Net income for Year 2 was $181,000. Dividends on common stock were $73,000 in total and dividends on preferred stock were $38,000 in total. The return on common stockholders’ equity for Year 2 is closest to:

 

14.

award: 0 out of 1.61 points  

Drama Company’s working capital is $136,000 and its current liabilities are $214,000. The company’s current ratio is closest to:

 

15.

award: 1.61 out of 1.61 points  

Brewster Company has an acid-test ratio of 1.5 and a current ratio of 2.5. Current assets equal $440,000, of which $12,400 is prepaid expenses. The company’s current assets consist of cash, marketable securities, accounts receivable, prepaid expenses, and inventory. Brewster Company’s inventory must be:

  6.award: 1.61 out of 1.61 points  

Fraser Company had $390,000 in sales on account last year. The beginning accounts receivable balance was $23,000 and the ending accounts receivable balance was $32,200. The company’s accounts receivable turnover was closest to:

[removed]

17.

award: 1.61 out of 1.61 points  

Irastan Company, a retailer, had cost of goods sold of $320,000 last year. The beginning inventory balance was $56,000 and the ending inventory balance was $48,000. The company’s average sale period was closest to:
 (Assume 365 days a year.)

 

18.

award: 1.61 out of 1.61 points  

Deschambault Corporation’s total current assets are $264,000, its noncurrent assets are $708,000, its total current liabilities are $132,000, its long-term liabilities are $520,000, and its stockholders’ equity is $330,000. Working capital is:

  

19.

award: 1.61 out of 1.61 points  

Hartzog Corporation’s most recent balance sheet and income statement appear below:

 

 

Year 2  

Year 1  

  

  

40  40  

1,

250  

  Total assets

   

  

  

20  20  

250  

440  

  

200  

290  290  

200  

  Total stockholder’s equity

					Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars)
			Assets
									Current assets:
					Cash	$3									40	$310
					Accounts receivable	5	80	5		60
									Inventory									290	6								20
								Prepaid expenses
									Total current assets	1,		530
			Plant and equipment, net	1,										190	1,										200
$2,	440		$2,	730
Liabilities and Stockholder’s Equity
									Current liabilities:
									Accounts payable	$	320	$			330
							Accrued liabilities
									Notes payable, short term						100
									Total current liabilities				600
					Bonds payable								260					340
												Total liabilities			700		940
Stockholder’s equity:
Preferred stock, $10 par, 5%					420
Common stock, $2 par				660	880
									Additional paid-in capital–common stock
									Retained earnings	590
1,740	1,790
Total liabilities and stockholder’s equity	$2,440	$2,730

  

 

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense

  Net income before taxes

  Income taxes (30%)

  Net income

				Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars)
$7,			350
4,410
2,940
2,178
762
105
657
197
$			460

   Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $7.04 per share.   The earnings per share of common stock for Year 2 is closest to:

  20.award: 0 out of 1.61 points  Hartzog Corporation’s most recent balance sheet and income statement appear below:

Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars)

 Year 2Year 1

Assets    Current assets:  

    Cash

    Accounts receivable420  

    Inventory

    Prepaid expenses40  40  

  Total current assets

  Plant and equipment, net

  Total assets

   

  

  Current liabilities:  

    Accounts payable

    Accrued liabilities20  20  

    Notes payable, short term

  Total current liabilities

  Bonds payable

260  

  Total liabilities

  

100  260  

640  

    Additional paid-in capital–common stock190  190      Retained earnings

230  

$2,120  $2,010  

		$		500	$									230
	400
						210				380
1,			1					70		1,050
	950		960
	$2,120		$2,010
		Liabilities and Stockholders’ Equity
$325	$250
	170			160
515	430
	240
$755	$	690
											Stockholders’ equity:
				Preferred stock, $100 par value, 5%
					Common stock, $2 par value				640
435
						Total stockholders’ equity	1,3	65	1,320
			Total liabilites & stockholders’ equity

 

Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars)

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense65    Net income before taxes

  Income taxes (30%)

  Net income

$4,350
2,	610
1,		740
1,289
451
386
116
$		270

Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.04 per share. The dividend payout ratio for Year 2 is closest to:

  21.award: 0 out of 1.61 points  Hartzog Corporation’s most recent balance sheet and income statement appear below:

Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2Year 1Assets    Current assets:  

    Cash

    Accounts receivable

340  

    Inventory

290  

    Prepaid expenses40  40  

  Total current assets

  Plant and equipment, net

870  

  Total assets

   Liabilities and Stockholders’ Equity    Current liabilities:  

    Accounts payable

    Accrued liabilities20  20  

    Notes payable, short term90  

  Total current liabilities290  

  Bonds payable210  230    Total liabilities

$500  

  Stockholders’ equity:  

    Preferred stock, $100 par value, 5%100  200  

    Common stock, $2 par value

550  

    Additional paid-in capital–common stock190  190  

    Retained earnings330  200    Total stockholders’ equity

  Total liabilites & stockholders’ equity$1,670  $1,740  

				$230		$200
	360
				180
	810						870
				860
			$	1,670				$ 1,740
	$180		$		220
	130
			370
		$600
					550
	1,170		1,		140

 

Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars)

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense50    Net income before taxes

  Income taxes (30%)

  Net income

	$3,	150
		1,890
		1,260
	932
	328
	278
	83
	$195

   Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.04 per share. The average collection period for Year 2 is closest to:
 (Assume 365 days a year.)

 

22.

award: 1.61 out of 1.61 points  Hartzog Corporation’s most recent balance sheet and income statement appear below:Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2Year 1Assets  

  Current assets:    

  Cash$230  $200      Accounts receivable360  340      Inventory180  290      Prepaid expenses40  40    Total current assets810  870    Plant and equipment, net860  870    Total assets$1,670  $1,740     Liabilities and Stockholders’ Equity    Current liabilities:      Accounts payable$180  

$220  

    Accrued liabilities20  20      Notes payable, short term90  130    Total current liabilities290  370    Bonds payable210  230    Total liabilities$500  $600    Stockholders’ equity:      Preferred stock, $100 par value, 5%100  200      Common stock, $2 par value550  550      Additional paid-in capital–common stock190  190      Retained earnings330  200    Total stockholders’ equity1,170  1,140    Total liabilites & stockholders’ equity$1,670  $1,740   

Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) 

 Sales (all on account)

$3,150  

  Cost of goods sold1,890    Gross margin1,260    Selling and administrative expense932    Net operating income328    Interest expense50    Net income before taxes278    Income taxes (30%)83    Net income$195  

Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.04 per share.

The times interest earned for Year 2 is closest to:

 

23.

award: 0 out of 1.61 points  

Financial statements for Larned Company appear below:

 Year 2Year 1  Current assets:  

530  320  

    Inventory

480  

    Prepaid expenses210  210    Total current assets

  

  Total assets

     Current liabilities:  

    Accounts payable

    Accrued liabilities150  90      Notes payable, short term160  350    Total current liabilities370  550  

  

230  

  Total liabilities$600  

  Stockholders’ equity:  

170  170  

260  260  

    Additional paid-in capital–common stock300  300      Retained earnings

  Total stockholders’ equity

  Total liabilites & stockholders’ equity$7,060  $5,120  

Larned Company Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands)
			Cash and marketable securities	$		510		$290
			Accounts receivable, net
	480
1,730	1,					300
			Noncurrent assets:
			Plant & equipment, net	5,330	3,				820
	$7,060		$5,120
$60	$	110
			Noncurrent liabilities:
			Bonds payable		780
$1,330
Preferred stock, $20 par, 10%
Common stock, $10 par
5,730	3,060
6,460	3,790

 

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense230    Net income before taxes

  Income taxes (30%)

  Net income

Larned Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands)
$19,270
13,490
5,780
		540
5,240
5,010
1,503
$3,507

Dividends during Year 2 totaled $837 thousand, of which $17 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $198. Larned Company’s earnings per share of common stock for Year 2 was closest to

 

24.

award: 1.61 out of 1.61 points  

Excerpts from Goodrow Corporation’s most recent balance sheet and income statement appear below:

 Year 2Year 1

  Total assets

  Total liabilities

  Stockholders’ equity:  

$950  

  Common stock, $2 par value

3,800  

  Additional paid-in capital–common stock

980  

  Retained earnings

  Total stockholders’ equity

$7,689	$7,					830
$1,360		$1,380
		Preferred stock, $100 par value, 10%		$950
	3,				800
		980
599				720
$6,329	$6,	450

 

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income300    Interest expense

  Net income before taxes

  Income taxes (30%)70    Net income

$3,030
1,820
	1,210
910
66
234
$164

Dividends on common stock during Year 2 totaled $190. Dividends on preferred stock totaled $95. The market price of common stock at the end of Year 2 was $5.68 per share. The earnings per share of common stock for Year 2 is closest to:

  

25.

award: 1.61 out of 1.61 points  Excerpts from Goodrow Corporation’s most recent balance sheet and income statement appear below:

 Year 2Year 1

  Total assets

  Total liabilities

  Stockholders’ equity:  

  Preferred stock, $100 par value, 10%

$800  

  Common stock, $2 par value

3,200  

  Additional paid-in capital–common stock830  830    Retained earnings

600  

  Total stockholders’ equity

$6,548	$6,660
$1,210	$1,230
	$800
	3,200
508
$5,338	$5,430

 

  Sales (all on account)

$2,730  

  Cost of goods sold

  Gross margin

  Selling and administrative expense820    Net operating income270    Interest expense

  Net income before taxes

  Income taxes (30%)

  Net income

1,640

1,090

59

211

63

$148

Dividends on common stock during Year 2 totaled $160. Dividends on preferred stock totaled $80. The market price of common stock at the end of Year 2 was $5.62 per share. The return on total assets for Year 2 is closest to:

26.

award: 0 out of 1.61 points  Excerpts from Goodrow Corporation’s most recent balance sheet and income statement appear below:

 Year 2Year 1

  Total assets

  Total liabilities

  Stockholders’ equity:  

  Preferred stock, $100 par value, 10%

$150  

  Common stock, $2 par value600  600    Additional paid-in capital–common stock180  180    Retained earnings

80  

  Total stockholders’ equity

$1,602	$1,590
$	560	$ 580
	$150
112
$1,042	$1,010

 

  Sales (all on account)

  Cost of goods sold860    Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense

  Net income before taxes110    Income taxes (30%)

  Net income

	$1,430
		570
429
141
31
33
$77

Dividends on common stock during Year 2 totaled $

30.

Dividends on preferred stock totaled $15. The market price of common stock at the end of Year 2 was $5.36 per share. The book value per share at the end of Year 2 is closest to:

27.

award: 1.61 out of 1.61 points  

Financial statements for Marcell Company appear below:

 Year 2Year 1  Current assets:  

    Cash and marketable securities

$230  

    Accounts receivable, net190  190      Inventory420  420  

100  100  

  Total current assets950  940  

  Noncurrent assets:  

    Plant & equipment, net

  Total assets

     Current liabilities:  

    Accounts payable

$230  

    Accrued liabilities60  60      Notes payable, short term270  450    Total current liabilities730  740  

  Noncurrent liabilities:  

    Bonds payable

660  

  Total liabilities

  Stockholders’ equity:  

260  260  

300  300  

    Additional paid-in capital–common stock520  520      Retained earnings960  780  

$3,290  $3,260  

		Marcell Company Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands)
$240
Preferred expenses
2,340		2,320
	$3,290		$3,260
		$400
		520
$1,250	$1,400
		Preferred stock, $10 par, 8%
		Common stock, $5 par
				Total stockholders equity	2,040	1,860
				Total liabilites & stockholders equity

 

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense700    Net operating income870    Interest expense40    Net income before taxes830    Income taxes (30%)

  Net income

		Marcell Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands)
$4,150
	2,580
1,570
249
$581

Marcell Company’s working capital (in thousands of dollars) at the end of Year 2 was closest to:

28.

award: 1.61 out of 1.61 points  Financial statements for Marcell Company appear below:

Marcell Company Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands) Year 2Year 1  Current assets:  

    Cash and marketable securities

    Accounts receivable, net230  230      Inventory540  540      Prepaid expenses140  140    Total current assets

  Noncurrent assets:  

    Plant & equipment, net

  Total assets

     Current liabilities:  

    Accounts payable$230  $270  

70  70  

    Notes payable, short term400  530    Total current liabilities700  870  

  Noncurrent liabilities:  

    Bonds payable

740  

  Total liabilities

  Stockholders’ equity:  

    Preferred stock, $10 par, 8%340  340      Common stock, $5 par380  380      Additional paid-in capital–common stock640  640      Retained earnings

860  

  Total stockholders equity

  Total liabilites & stockholders equity$3,850  $3,830  

$280		$270
1,190	1,180
2,660	2,	650
	$3,	850		$3,830
	Accured liabilities
710
$1,410	$1,610
1,080
	2,440	2,220

 

Marcell Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands)

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense1,210    Net operating income1,890    Interest expense170    Net income before taxes

  Income taxes (30%)

  Net income

$10,350

7,250

3,100

1,720

516

$1,204

Marcell Company’s current ratio at the end of Year 2 was closest to:

  

29.

award: 1.61 out of 1.61 points  Financial statements for Marcell Company appear below:

Marcell Company Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands) Year 2Year 1  Current assets:  

    Cash and marketable securities

    Accounts receivable, net290  290      Inventory720  720      Prepaid expenses200  200    Total current assets

  Noncurrent assets:  

    Plant & equipment, net

  Total assets

     Current liabilities:  

    Accounts payable$290  $330  

    Accured liabilities70  70  

    Notes payable, short term460  650    Total current liabilities820  1,050  

  Noncurrent liabilities:  

    Bonds payable830  860    Total liabilities

  Stockholders’ equity:  

    Preferred stock, $10 par, 8%460  460      Common stock, $5 par500  500      Additional paid-in capital–common stock820  820      Retained earnings1,260  980    Total stockholders equity

  Total liabilites & stockholders equity$4,690  $4,670  

$340		$330
1,550	1,540
3,140	3,130
	$4,690		$4,670
$1,650	$1,910
3,040	2,760

 

Marcell Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands)

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense1,670    Net operating income

  Interest expense230  

  Net income before taxes

  Income taxes (30%)

  Net income

$14,250

9,980

4,270

2,600

2,370

711

$1,659

Marcell Company’s acid-test ratio at the end of Year 2 was closest to:

 30.award: 1.61 out of 1.61 points  

Mclaughlin Corporation’s most recent balance sheet and income statement appear below:

Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2Year 1  Current assets:  

    Cash$400  

    Accounts receivable550  560      Inventory380  240      Prepaid expenses190  200    Total current assets

2,320  

  Total assets

 

  Current liabilities:  

    Accounts payable

$400  

    Accrued liabilities210  200      Notes payable, short term160  170    Total current liabilities750  

  Bonds payable

660  

  Total liabilities$1,380  $1,430  

  Stockholders’ equity:  

    Preferred stock, $100 par value, 5%800  800  

800  800  

    Additional paid-in capital–common stock510  510      Retained earnings350  330    Total stockholders equity

2,440  

  Total liabilites & stockholders equity$3,840  $3,870  

$350
1,520	1,350
	Plant and equipment, net	2,520
	$3,840		$3,870
	Liabilities and Stockholders’ Equity
$380
770
630
	Common stock, $1 par value
2,460

 

Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars)

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense45    Net income before taxes660    Income taxes (30%)

  Net income

$6,690
4,340
2,350
1,6	45
705
198
$462

The times interest earned for Year 2 is closest to:

31.

award: 1.70 out of 1.70 points

  Mclaughlin Corporation’s most recent balance sheet and income statement appear below:

Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars)

  Year 2Year 1

  Current assets:    

    Cash

    Accounts receivable610  

    Inventory420  260      Prepaid expenses210  220    Total current assets

    Plant and equipment, net2,580  

  Total assets

             Liabilities and Stockholders’ Equity  Current liabilities:  

    Accounts payable

$440  

    Accrued liabilities230  220      Notes payable, short term180  190    Total current liabilities830  850    Bonds payable690  720    Total liabilities

  Stockholders’ equity:  

    Preferred stock, $100 par value, 5%

900  

    Common stock, $1 par value900  900      Additional paid-in capital–common stock570  570      Retained earnings370  350    Total stockholders equity

  Total liabilites & stockholders equity$4,260  $4,290  

	$440	$390
620
1,680	1,490
2,800
	$4,260		$4,290
$420
$1,520	$1,570
			900
2,740	2,720

 

Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars)

  Sales (all on account)

  Cost of goods sold

  Gross margin

  Selling and administrative expense

  Net operating income

  Interest expense

  Net income before taxes

  Income taxes (30%)

  Net income

$7,570
4,920
2,650
1,855
795
47
748
224
$524