b. $7,900
c. $12,300

d. $177,400
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The correct answer is: $11,000
Question 8
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Based on the information below and considering that this company paid $322,500 in cash to its
suppliers during the year, what is the company's cost of goods sold for 2015?
1/1/2015 12/31/2015
Inventory
$23,400
$34,560
Accounts payable $354,000
$223,000
Select one:
a. $180,340
b. $311,340
c. $322,500
d. $442,340
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The correct answer is: $180,340

Question 9
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A business purchased merchandise for $15,000 on account; terms are 2/10, n/30. If $2,600 of the
merchandise was returned and the remaining amount due was paid within the discount period,
the purchase discount would be:
Select one:
a. $248
(15,000-2,600)*2%=$248
b. The right answer is not listed here.
c. $52
d. $300
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The correct answer is: $248
Question 10
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On December 31, 2015, Sveva Inc. has total liabilities of $252,000 and total equity of $420,000.
The company needs to raise additional funds through debt and equity. The company will issue
40,000 shares of common stock at $4.50 per share and in addition it intends to borrow as much
as it can from Bank of Switzerville. Bank of Switzerville requires a maximum debt-to-asset ratio
of 0.75.
What is the maximum additional amount that Sveva can borrow after the additional stock is
issued?
Select one:
a. $1,548,000
b. $1,236,000
c. $639,000
d. $852,000
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The correct answer is: $1,548,000
Question 11
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Below is selected financial information for Panettone, Inc.
In the answer boxes below, select the right answer from the drop-down menu. Each answer is
worth 2 points. Answers are rounded to two decimals.
Ratio
Answer
Days Sales in Inventory
Answer
Average Collection Period
Answer
Dividend Payout Ratio
Answer

Return on Sales
Answer
Current Ratio
Answer
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Ratio
Correct Answer
Days Sales in Inventory
79.84
Average Collection Period
53.41
Dividend Payout Ratio
0.69
Return on Sales
0.12
Current Ratio
1.75
Question 12
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If a company has a current ratio below 1, which of the following transactions would cause the
current ratio to increase?
Select one:
a. Purchasing land with cash

b. Collecting an account receivable
c. Purchasing land by signing a short-term note
d. Purchasing inventory by signing a long-term note
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The correct answer is: Purchasing inventory by signing a long-term note
Question 13
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ABC Inc. sells socks. During January 2016, its inventory records for one brand of its socks were
as follows:
Quantity Price per pair
Beginning Inventory
10 pairs
$20
= $200
January 6 Purchase
4 pairs
$25
= $100
January 10 Sale
5 pairs
N/A
January 15 Purchase
7 pairs
$30
= $210
January 20 Sale
10 pairs
N/A
January 25 Purchase
4 pairs
$30
= $120
See information above. Using this information, the cost of goods sold using the periodic average
cost method is
Select one:
a. $265

b. $236
c. $358
d. $378
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