NAME: SCORE /50 DATE: FINANCIAL MANAGEMENT FIN 450 SUMMER 2014 QUIZ 1 ________ QUESTIONNUMBER | ANSWERS | QUESTIONS | 1 | b | A firm has $520 in inventory, $1,860 in fixed assets, $190 in accounts receivables, $210 in accounts payable, and $70 in cash. What is the amount of the current assets? A. | $710 | B. | $780 | C. | $990 | D. | $2,430 | E. | $2,640 | | 2 | D | A firm has common stock of $6,200, paid-in surplus of $9,100, total liabilities of $8,400, current assets of $5,900, and fixed assets of $21,200.
(0.5 points) 50% c. A company has $1,400 in liabilities and $1,500 in assets. Calculate the company's debt ratio as a percentage. (0.5 points) 93.3% d. A company has $1,400 in liabilities and $1,500 in equity. Calculate the company's debt to equity ratio as a percentage. (0.5 points) 93.3% e. A company's current assets are $30,000 and current liabilities are
A. $16,500 B. $9,000 C. $25,500 D. $7,500 E. $50,000 Difficulty: Easy 2. Yaro Company owns 30% of the common stock of Dew Co. and uses the equity method to account for the investment. During 2008, Dew reported income of $250,000 and paid dividends of $80,000.
What is the amount of its credit carryover and the last year to which the carryover could be used? Answer: $7,750 carried over to 2004 or 2025 4. Margolin Corporation has a regular taxable income of $120,000. It has a positive adjustment of $90,000, preference items of $50,000 and negative adjustments of $40,000. What is its alternative minimum tax?
DSO = Receivables / Ave. sales per day Receivables= DSO * Ave. sales per day = 20 * 20,000 Receivables= $400,000 (3-2) Debt Ratio: Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Debt ratio = 1 – (1 / Equity multiplier) Debt ratio = 1 – (1/2.5) = 1 - .40 = .60 Debt ratio = 60% (3-3) Market/Book Ratio: Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets.
J. Premium offers outstanding- Current Liability K. Discount notes payable- Current Liability L. Employee payroll deductions unremitted- Current Liability M. Current maturities of long-term debts to be paid from current assets- Current Liability N. Cash dividends declared but unpaid- Current Liability O. Dividends in arrears on preferred stock- Footnote disclosure P. Loans from officers- Current Liability 13-2. Accounts and Notes Payable * The following are selected 2012 transactions of Darby Corporation. Sept. 1 | Purchased inventory from Orion Company on account for $50,000.
C. accounting profits produced. D. increase in total sales produced. 3. Assume your firm has an unused machine that originally cost $75,000, has a book value of $20,000, and is currently worth $25,000. Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: A.
1-6 Ending retained earnings $278,000. 1-8 (b) Net income $34,154. 1-9 Common stock $30,000; Cost of goods sold $55,000. 1-10 (b) Ending retained earnings $24,000; total assets $125,000. 1-11 (b) Net income $1,005.1.
It will be depreciated under MACRS using a 5-year recovery period. At the end of 5 years, the machine can be sold to net $400,000 before taxes. If this machine is acquired, it is anticipated that the following current account changes would result. Cash + $25,000 Accounts Receivable + 120,000 Inventories - 20,000 Accounts Payable + 35,000 Press B – This press is not as sophisticated as press A. It costs $640,000 and requires $20,000 in
What would be the impact on monthly sales cost, and income? Regular Selling Price Impact: Price $4,350 Quantity $3,000 Revenue $13,050,000 Variable Manufacturing Costs ($5,385,000) Variable Marketing Costs ($825,000) Contribution Margin $6,840,000 *Fixed Manufacturing Costs ($1,980,000) *Fixed Marketing Costs ($2,310,000) Income $2,550,000 Using the regular selling price Income = Revenues – Total costs = $13,050,000 - $10,500,000 = $2,550,000 * Continue to the next page New Selling Price Impact: Price $3,850 Quantity $3,500 Revenue $13,475,000 Variable Manufacturing Costs ($6,282,500) Variable Marketing Costs ($962,500) Contribution Margin $6,230,000 Fixed Manufacturing Costs ($1,980,000) Fixed Marketing Costs ($2,310,000) Income $1,940,000 2) After price reduction, income = $13,475,000 - $11,535,000 =