105.Mitchell Corporation has current assets of $1,600,000 and current liabilities of$750,000. If they issue $200,000 of new stock what will their new current ratio be? a.2.4:1b.1.9:1c.1.7:1d.2.13:1Ans: A, LO: 2, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC:Problem Solving, IMA: Business EconomicsSolution: ($1,600,000 + $200,000) ⎟$750,000 =2.4:1(Cur. assets + New stock ) ÷ Cur. liab.106.The debt to assets ratio is a107.Free cash flow provides an indication of a company’s ability to FOR INSTRUCTOR USE ONLY
2-34Test Bank for Survey of Accounting, First Edition108.Free cash flow represents109.Free cash flow is net cash provided by operating activitiesa.less capital expenditures.b.less cash dividends.c.less capital expenditures and cash dividends.d.less capital expenditures and salaries expense.Ans: C, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA:Reporting110.In 2017 Grider Corporation had cash receipts of $56,000 and cash disbursements of$32,000. Grider’s ending cash balance at December 31, 2017 was $78,000. What wasGrider’s beginning cash balance?111.In 2017 Grider Corporation had cash receipts of $35,000 and cash disbursements of$20,000. Grider’s ending cash balance at December 31, 2017 was $65,000. What wasGrider’s beginning cash balance?