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test 1 practice Q

test 1 practice Q - FIN 301 TEST 1 PRACTICE QUESTIONS...

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FIN 301 - TEST 1 - PRACTICE QUESTIONS Student: ___________________________________________________________________________ 1. The tax rates are as shown. Nevada Mining currently has taxable income of \$97,800. How much additional tax will the firm owe if taxable income increases by \$21,000? A. \$8,080 B. \$8,130 C. \$8,155 D. \$8,170 E. \$8,190 2. Jensen Enterprises paid \$1,300 in dividends and \$920 in interest this past year. Common stock increased by \$1,200 and retained earnings decreased by \$310. What is the net income for the year? 3. At the beginning of the year, the long-term debt of a firm was \$72,918 and total debt was \$138,407. At the end of the year, long-term debt was \$68,219 and total debt was \$145,838. The interest paid was \$6,430. What is the amount of the cash flow to creditors?

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4. Beach Front Industries has sales of \$546,000, costs of \$295,000, depreciation expense of \$37,000, interest expense of \$15,000, and a tax rate of 32 percent. The firm paid \$59,000 in cash dividends. What is the addition to retained earnings? 5. Webster World has sales of \$12,900, costs of \$5,800, depreciation expense of \$1,100, and interest expense of \$700. What is the operating cash flow if the tax rate is 32 percent? A. \$4,704 B. \$5,749 C. \$5,404 D. \$7,036 E. \$7,100 6. The 2008 balance sheet of The Sports Store showed \$800,000 in the common stock account and \$6.7 million in the additional paid-in surplus account. The 2009 balance sheet showed \$872,000 and \$8 million in the same two accounts, respectively. The company paid out \$600,000 in cash dividends during 2009. What is the cash flow to stockholders for 2009? 7. Winston Industries had sales of \$843,800 and costs of \$609,900. The firm paid \$38,200 in interest and \$18,000 in dividends. It also increased retained earnings by \$62,138 for the year. The depreciation was \$76,400. What is the average tax rate?

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