question3 - (a) 47.9%. (b) 51.7%. (c) 40.7%. (d) 44.0%....

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  2010 2009 Inventory $ 54,000 $ 48,000 Current assets 81,000 106,000 Total assets 382,000 326,000 Current liabilities 27,000 36,000 Total liabilities 102,000 88,000 Stockholders' equity 280,000 238,000 Net sales 784,000 697,000 Cost of goods sold 306,000 277,000 Net income 134,000 90,000 Tax expense 22,000 18,000 Interest expense 12,000 12,000 Dividends paid to preferred stockholders 20,000 20,000 Dividends paid to common stockholders 15,000 10,000 Compute the days in inventory for 2010. (a)   64.4 days. (b)   60.8 days. (c)   6 days. (d)   24 days. Answer: (b)   60.8 days. Compute the current ratio for 2010. (a)   1.26:1. (b)   3.0:1. (c)   0.80:1.
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(d)   3.75:1. Answer: (b)  3.0:1. Compute the profit margin ratio for 2010. (a)   17.1%. (b)   18.1%. (c)   37.9%. (d)   5.9%. Answer: (a)  17.1%. Compute the return on common stockholders' equity for 2010.
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Unformatted text preview: (a) 47.9%. (b) 51.7%. (c) 40.7%. (d) 44.0%. Answer: (d) 44.0%. Compute the times interest earned for 2010. (a) 11.2 times. (b) 65.3 times. (c) 14.0 times. (d) 13.0 times. Answer: (c) 14.0 times. Which situation below might indicate a company has a low quality of earnings? (a) The same accounting principles are used each year. (b) Revenue is recognized when earned. (c) Maintenance costs are capitalized and then depreciated. (d) The company's P-E ratio is high relative to competitors. Answer: (c) Maintenance costs are capitalized and then depreciated....
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question3 - (a) 47.9%. (b) 51.7%. (c) 40.7%. (d) 44.0%....

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