pt1 - Chapters 1 - 3 Review Questions If a firm uses part...

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Chapters 1 - 3 Review Questions
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If a firm uses part of the cash it received from the payment of an account receivable to buy inventory and leaves the rest in its bank account, its current ratio will remain unchanged. A) True B) False If a firm uses cash to purchase inventory, its quick ratio will increase. A) True B) False An excess of uses of funds over the sources of funds in a firm’s financial statements implies that the firm incurred a loss over the relevant accounting period. A) True B) False
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A(n) ______________ asset is one that can be converted into cash quickly without significant loss in value. A) current B) fixed C) intangible D) liquid E) long-term Which of the following is not a current asset? A) Inventory B) Cash on hand C) Patents D) Accounts receivable E) Marketable securities
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XYZ Company had a net income of $40 million in 1999. The firm paid no dividends. If there were no further changes to the stockholders' equity accounts, then ______________________________ by $40 million. A) common stock increased B) retained earnings increased C) total shareholders' equity decreased D) common stock decreased E) the market value of the firm's stock decreased
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Marble Comics Group Year-end Balance Sheets ($ millions) 1998 1999 1998 1999 Cash 75 135 Accounts payable 89 110 Accounts receivable 230 214 Notes payable 227 442 Inventory 240 188 Current liabilities 316 552 Current assets 545 537 Long-term debt 615 440 Net fixed assets 788 890 Common stock 55 55 Retained earnings 347 380 Total Assets 1333 1427 Total Liab. & S. Equity 1333 1427 Income Statement for 1999 ($ millions) Net sales 905 Less: Cost of goods sold 522 Less: General & admin. expenses 93 Less: Depreciation 110 EBIT 180 Less: Interest on long-term debt 61 Earnings before taxes 119 Less: Taxes 30 Net income 89
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Marble Comics' debt to equity ratio at the end of 1999 is: D/E: Long-Term Debt / Shareholders’ Equity
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This note was uploaded on 10/06/2009 for the course MIME 310 taught by Professor Bilido during the Summer '08 term at McGill.

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pt1 - Chapters 1 - 3 Review Questions If a firm uses part...

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