homework chapter 2 flash card

# homework chapter 2 flash card - A firm has common stock of...

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A firm has common stock of \$115, paid-in surplus of \$345, total liabilities of \$380, current assets of \$370, and fixed assets of \$560. What is the amount of the shareholders' equity? (Chapter 2) \$550 \$930 \$790 Recently, the owner of Martha's Wares encountered severe legal problems and is trying to sell her business. The company built a building at a cost of \$1,200,000 that is currently appraised at \$1,400,000. The equipment originally cost \$659,000 and is currently valued at \$446,000. The inventory is valued on the balance sheet at \$367,000 but has a market value of only one-half of that amount. The owner expects to collect 99 percent of the \$197,500 in accounts receivable. The firm has \$9,100 in cash and owes a total of \$1,400,000. The legal problems are personal and unrelated to the actual business. What is the market value of this firm? (Chapter 2) \$1,017,625 \$834,125 \$1,215,125 \$1,582,125 Ivan's, Inc. paid \$470 in dividends and \$675 in interest this past year. Common stock increased by \$215 and retained earnings decreased by \$115. What is the net income for the year? (Chapter 2) \$675 \$355 \$890 The tax rates are as shown. Taxable Income Tax Rate \$0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% What is the average tax rate for a firm with taxable income of \$118,842? (Chapter 2) 20.00% 36.66% 24.91% 28.25% The tax rates are as shown. Taxable Income Tax Rate \$0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% Your firm currently has taxable income of \$81,300. How much additional tax will you owe if you increase your taxable income by \$22,200? (Chapter 2) \$6,358 \$7,723 \$7,738 \$6,367 Your firm has net income of \$312 on total sales of \$1,280. Costs are \$670 and depreciation is \$130. The tax rate is 35 percent. The firm does not have interest expenses. What is the operating cash flow? (Chapter 2) \$84 \$442 \$610 Teddy's Pillows has beginning net fixed assets of \$472 and ending net fixed assets of \$560. Assets valued at \$259 were sold during the year. Depreciation was \$37. What is the amount of net capital spending? (Chapter 2) \$51 \$384 \$88 \$125 At the beginning of the year, a firm has current assets of \$321 and current liabilities of \$238. At the end of the year, the current assets are \$452 and the current liabilities are \$278. What is the change in net working capital? (Chapter 2)

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\$131 \$-91 \$278 \$91 Peggy Grey's Cookies has net income of \$370. The firm pays out 35 percent of the net income to its shareholders as dividends. During the year, the company sold \$77 worth of common stock. What is the cash flow to stockholders? (Chapter 2) \$129.50 \$259.00 \$206.50 52.50 Use the following information to answer this question: ? (Chapter 2) Windswept, Inc. 2010 Income Statement (\$ in millions) Net sales \$8,500 Less: Cost of goods sold 7,200 Less: Depreciation 420 Earnings before interest and taxes 880 Less: Interest paid 82 Taxable Income 798 Less: Taxes 279 Net income \$ 519 Windswept, Inc. 2009 and 2010 Balance Sheets (\$ in millions)
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## This note was uploaded on 03/15/2012 for the course FIN 300 taught by Professor Cindychen during the Fall '07 term at CSU Long Beach.

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homework chapter 2 flash card - A firm has common stock of...

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