Maxwell company sells goods and services gross of sales taxes In other words

Maxwell company sells goods and services gross of

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20.Maxwell company sells goods and services gross of sales taxes. In other words, the sales taxes are included in the sales price. The sales tax rate is 6 percent. At the end of the current period, the Revenue account has a balance of $265,000. The amount of sales tax payable is: 21.Profitability ratios are an important measure of a company’s operating success. Return on assets, Return on sales, aka Net Profit Margin Percentage, aka Net income to net sales, Return on equity- return to average common 22.Market tests help investors and potential investors assess the relative merits of the various stocks in the marketplace. These tests include:
11 ACCT 701 TRUE AND FALSE QUESTIONS REVIEW QUIZZES 23.The following data was abstracted from the 2014 December 31, balance sheet Andrews Company: Cash $136,000Marketable securities 64,000. Accounts and notes receivable, net 184,000. Merchandise inventory 244,000. Prepaid expenses 12,000.Accounts and notes payable, short-term 256,000.Short-term accrued liabilities 64,000. Bonds payable, long-term 400,000. The current ratio is: 2:1 24.Benson Company shows the following data on its 2014 financial statements: Accounts receivable, January 1 $720,000;Accounts receivable, December 31 960,000; Merchandise inventory, January 1 900,000; Merchandise inventory, December 31 1,020,000; Gross sales 4,800,000; Sales returns and allowances 180,000;Net sales 4,620,000; Cost of goods sold 3,360,000;Income before interest and taxes 720,000; Interest on bonds 192,000; Net income 384,000; The accounts receivable turnover is: 5.5 times per year. 25.The following data were abstracted from the 2014 December 31, balance sheet of Andrews Company: Cash $136,000 Marketable securities 64,000.Accounts and notes receivable, net 184,000. Merchandise inventory 244,000. Prepaid expenses 12,000. Accounts and notes payable, short-term 256,000.Short-term accrued liabilities 64,000. Bonds payable, long-term 400,000.The acid-test ratio is: 1.2:1
12 ACCT 701 TRUE AND FALSE QUESTIONS REVIEW QUIZZES Acid-test ratio: $384,000 / $320,000 = 1.2: 1 26.Benson Company shows the following data on its 2014 financial statements: Accounts receivable, January 1 $720,000; Accounts receivable, December 31 960,000;Merchandise inventory, January 1 900,000; Merchandise inventory, December 31 1,020,000; Gross sales 4,800,000;Sales returns and allowances 180,000; Net sales 4,620,000; Cost of goods sold 3,360,000; Income before interest and taxes 720,000;Interest on bonds 192,000; Net income 384,000; The inventory turnover is: 3.5 times per year.

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