Question 1

Better Products just filed its quarterly report with the SEC. This report is referred to as which one of the following?

Accepted Answer

A)  10-F
B)  10-K
C)  10-Q
D)  EDGAR 10
E)  10FDF) B) and C)
G) B) and D)

Question 2

Which one of the following is defined as anything a firm owns that has value?

Accepted Answer

A)  equity
B)  asset
C)  liability
D)  cash inflow
E)  cash outflowF) C) and D)
G) C) and E)

Question 3

Sales minus cost of goods sold are equal to which one of the following?

Accepted Answer

A)  net sales
B)  operating income
C)  gross profit
D)  pretax income
E)  net incomeF) A) and E)
G) A) and C)

Question 4

A firm has a price-cash flow ratio of 12.5 and a price-book value ratio of 7.6. If the cash flow per share is $4.67, what is the book value per share?

Accepted Answer

A)  $2.84
B)  $3.55
C)  $4.44
D)  $6.45
E)  $7.68F) A) and D)
G) None of the above

Question 5

Sweet Tree Cookies has current net income of $268,000 of which $110,000 was paid out in dividends. The remaining $158,000 will be shown in which account on the firm's financial statements for next year?

Accepted Answer

A)  long-term debt
B)  common stock
C)  net income
D)  retained earnings
E)  paid in surplusF) D) and E)
G) B) and E)

Question 6

Your company has pretax income of $52,000 on sales of $506,000. Sales are expected to increase by 6% next year and the tax rate is 21%. What is the expected net income for next year if your firm uses the percentage of sales approach when compiling pro forma statements?

Accepted Answer

A)  $28,938
B)  $31,835
C)  $33,072
D)  $35,582
E)  $43,545F) C) and D)
G) None of the above

Question 7

Which one of the following ratios indicates the amount of assets a firm needs to generate $1 in sales?

Accepted Answer

A)  capital intensity ratio
B)  return on assets
C)  asset turnover rate
D)  profit margin
E)  earnings ratioF) All of the above
G) A) and D)

Question 8

Which one of the following statements is correct?

Accepted Answer

A)  Pretax income is equal to gross profit minus interest expense.
B)  Gross profit is equal to sales minus costs of goods sold and depreciation.
C)  Operating expenses are indirect costs.
D)  Costs that vary directly with production are classified as operating expenses.
E)  The change in retained earnings is equal to net income plus dividends paid.F) D) and E)
G) B) and E)

Question 9

Eagle Tactical, Inc., has taxable income of $1,500,000. The company paid out $240,000 in interest expense. The tax rate is 21% and the dividend payout ratio is 35%. What is the amount that was paid out in dividends?

Accepted Answer

A)  $315,000
B)  $350,000
C)  $382,500
D)  $414,750
E)  $470,000F) None of the above
G) A) and B)

Question 10

Wilson's Clothing has a loan payable to a bank which is due 18 months from now. How is this loan classified on the firm's financial statements?

Accepted Answer

A)  fixed asset
B)  current liability
C)  long-term debt
D)  equity
E)  expenseF) A) and B)
G) B) and E)

Question 11

ABC Construction, Inc., has buildings and equipment of $315,600, long-term debt of $154,700, accounts payable of $52,000, cash of $9,800, accounts receivable of $18,300, inventory of $62,000, and retained earnings of $147,000. What is the total equity of the firm?

Accepted Answer

A)  $5,200
B)  $97,000
C)  $147,000
D)  $199,000
E)  $228,000F) A) and C)
G) C) and E)

Question 12

Which one of the following is an intangible fixed asset?

Accepted Answer

A)  accounts receivable
B)  patent
C)  inventory
D)  equipment
E)  buildingF) A) and B)
G) A) and C)

Question 13

Behrend Corporation has annual sales of $4.5 million, depreciation of $425,000, operating expenses of $679,000, cost of goods sold of $2.3 million, and interest expense of $230,000. What is the operating income?

Accepted Answer

A)  $1,096,000
B)  $2,036,000
C)  $3,525,000
D)  $4,000,000
E)  $4,811,000F) B) and C)
G) A) and D)

Question 14

Marley Enterprises has financing cash flow of −$45,200 and investment cash flow of $24,500 for the year. The beginning cash balance was $64,200 and the ending cash balance was $55,100. What was the operating cash flow for the period?

Accepted Answer

A)  −$15,500
B)  −$9,600
C)  −$7,700
D)  $8,900
E)  $11,600F) All of the above
G) B) and D)

Question 15

Which one of the following is an accounting statement that provides information on a firm's revenues and expenses?

Accepted Answer

A)  balance sheet
B)  cash budget
C)  pro forma balance sheet
D)  income statement
E)  cash flow statementF) B) and E)
G) B) and D)

Question 16

The summation of the operating, investment, and financing cash flows for a stated period of time must equal which one of the following for the same time period?

Accepted Answer

A)  net income
B)  total assets
C)  ending cash balance
D)  change in the cash balance
E)  taxable incomeF) C) and D)
G) A) and B)

Question 17

The DeSoto Container Company has sales of $3.6 million and operating expenses of $225,000. The firm uses the percentage of sales approach and estimates next year's sales at $3.8 million. What are the operating expenses expected to be next year?

Accepted Answer

A)  $221,231
B)  $225,123
C)  $229,400
D)  $232,549
E)  $237,500F) A) and E)
G) C) and D)

Question 18

A firm has earnings per share of $3.50 and cash flow per share of $3.84. The price-earnings ratio is 24.1. What is the price-cash flow ratio?

Accepted Answer

A)  19.8
B)  20.1
C)  22.0
D)  26.0
E)  27.1F) B) and E)
G) A) and B)

Question 19

What is the operating cash flow, given the following information?
 Net income $740 Depreciation$40Issuance of new stock $20 Repayment of dept $35Sale of old equipment $40 Purchase of new equipment$60 Dividend payments $65 Interest payments$80\begin{array}{lrr}  	ext {Net income  } &\$740\ 	ext {  Depreciation} &\$40\ 	ext {Issuance of new stock  } &\$20\ 	ext { Repayment of dept } &\$35\ 	ext {Sale of old equipment  } &\$40\ 	ext {  Purchase of new equipment} &\$60\ 	ext { Dividend payments } &\$65\ 	ext {  Interest payments} &\$80\\end{array}Net income  DepreciationIssuance of new stock  Repayment of dept Sale of old equipment  Purchase of new equipment Dividend payments  Interest payments​$740$40$20$35$40$60$65$80​

Accepted Answer

A)  $680
B)  $650
C)  $780
D)  $890
E)  $930 F) D) and E)
G) C) and D)

Question 20

Return on equity is equal to which one of the following?

Accepted Answer

A)  dividend yield divided by total equity
B)  retained earnings divided by total equity
C)  revenue divided by total equity
D)  net income divided by total equity
E)  operating cash flow divided by total equityF) B) and E)
G) C) and D)

Exam 19: Projecting Cash Flow and Earnings

Return on equity is equal to which one of the following?

Correct Answer
verified

Behrend Corporation has annual sales of $4.5 million, depreciation of $425,000, operating expenses of $679,000, cost of goods sold of $2.3 million, and interest expense of $230,000. What is the operating income?

Correct Answer
verified

The summation of the operating, investment, and financing cash flows for a stated period of time must equal which one of the following for the same time period?

Correct Answer
verified

Your company has pretax income of $52,000 on sales of $506,000. Sales are expected to increase by 6% next year and the tax rate is 21%. What is the expected net income for next year if your firm uses the percentage of sales approach when compiling pro forma statements?

Correct Answer
verified

A firm has earnings per share of $3.50 and cash flow per share of $3.84. The price-earnings ratio is 24.1. What is the price-cash flow ratio?

Correct Answer
verified

Which one of the following is an intangible fixed asset?

Correct Answer
verified

Wilson's Clothing has a loan payable to a bank which is due 18 months from now. How is this loan classified on the firm's financial statements?

Correct Answer
verified

Marley Enterprises has financing cash flow of −$45,200 and investment cash flow of $24,500 for the year. The beginning cash balance was $64,200 and the ending cash balance was $55,100. What was the operating cash flow for the period?

Correct Answer
verified

ABC Construction, Inc., has buildings and equipment of $315,600, long-term debt of $154,700, accounts payable of $52,000, cash of $9,800, accounts receivable of $18,300, inventory of $62,000, and retained earnings of $147,000. What is the total equity of the firm?

Correct Answer
verified

Which one of the following is an accounting statement that provides information on a firm's revenues and expenses?

Correct Answer
verified

Which one of the following statements is correct?

Correct Answer
verified

Better Products just filed its quarterly report with the SEC. This report is referred to as which one of the following?

Correct Answer
verified

A firm has a price-cash flow ratio of 12.5 and a price-book value ratio of 7.6. If the cash flow per share is $4.67, what is the book value per share?

Correct Answer
verified

Eagle Tactical, Inc., has taxable income of $1,500,000. The company paid out $240,000 in interest expense. The tax rate is 21% and the dividend payout ratio is 35%. What is the amount that was paid out in dividends?

Correct Answer
verified

Sales minus cost of goods sold are equal to which one of the following?

Correct Answer
verified

Which one of the following is defined as anything a firm owns that has value?

Correct Answer
verified

Sweet Tree Cookies has current net income of $268,000 of which $110,000 was paid out in dividends. The remaining $158,000 will be shown in which account on the firm's financial statements for next year?

Correct Answer
verified

Correct Answer
verified

Which one of the following ratios indicates the amount of assets a firm needs to generate $1 in sales?

Correct Answer
verified

The DeSoto Container Company has sales of $3.6 million and operating expenses of $225,000. The firm uses the percentage of sales approach and estimates next year's sales at $3.8 million. What are the operating expenses expected to be next year?

Correct Answer
verified

Exam 19: Projecting Cash Flow and Earnings

Return on equity is equal to which one of the following?

Correct AnswerverifiedShow Answer

Behrend Corporation has annual sales of $4.5 million, depreciation of $425,000, operating expenses of $679,000, cost of goods sold of $2.3 million, and interest expense of $230,000. What is the operating income?

Correct AnswerverifiedShow Answer

The summation of the operating, investment, and financing cash flows for a stated period of time must equal which one of the following for the same time period?

Correct AnswerverifiedShow Answer

Your company has pretax income of $52,000 on sales of $506,000. Sales are expected to increase by 6% next year and the tax rate is 21%. What is the expected net income for next year if your firm uses the percentage of sales approach when compiling pro forma statements?

Correct AnswerverifiedShow Answer

A firm has earnings per share of $3.50 and cash flow per share of $3.84. The price-earnings ratio is 24.1. What is the price-cash flow ratio?

Correct AnswerverifiedShow Answer

Which one of the following is an intangible fixed asset?

Correct AnswerverifiedShow Answer

Wilson's Clothing has a loan payable to a bank which is due 18 months from now. How is this loan classified on the firm's financial statements?

Correct AnswerverifiedShow Answer

Marley Enterprises has financing cash flow of −$45,200 and investment cash flow of $24,500 for the year. The beginning cash balance was $64,200 and the ending cash balance was $55,100. What was the operating cash flow for the period?

Correct AnswerverifiedShow Answer

ABC Construction, Inc., has buildings and equipment of $315,600, long-term debt of $154,700, accounts payable of $52,000, cash of $9,800, accounts receivable of $18,300, inventory of $62,000, and retained earnings of $147,000. What is the total equity of the firm?

Correct AnswerverifiedShow Answer

Which one of the following is an accounting statement that provides information on a firm's revenues and expenses?

Correct AnswerverifiedShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

Better Products just filed its quarterly report with the SEC. This report is referred to as which one of the following?

Correct AnswerverifiedShow Answer

A firm has a price-cash flow ratio of 12.5 and a price-book value ratio of 7.6. If the cash flow per share is $4.67, what is the book value per share?

Correct AnswerverifiedShow Answer

Eagle Tactical, Inc., has taxable income of $1,500,000. The company paid out $240,000 in interest expense. The tax rate is 21% and the dividend payout ratio is 35%. What is the amount that was paid out in dividends?

Correct AnswerverifiedShow Answer

Sales minus cost of goods sold are equal to which one of the following?

Correct AnswerverifiedShow Answer

Which one of the following is defined as anything a firm owns that has value?

Correct AnswerverifiedShow Answer

Sweet Tree Cookies has current net income of $268,000 of which $110,000 was paid out in dividends. The remaining $158,000 will be shown in which account on the firm's financial statements for next year?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following ratios indicates the amount of assets a firm needs to generate $1 in sales?

Correct AnswerverifiedShow Answer

The DeSoto Container Company has sales of $3.6 million and operating expenses of $225,000. The firm uses the percentage of sales approach and estimates next year's sales at $3.8 million. What are the operating expenses expected to be next year?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified