35 the acid test quick ratio a is used to quickly

This preview shows page 33 - 45 out of 45 pages.

35. The acid-test (quick) ratio a. is used to quickly determine a company's solvency and long-term debt paying ability. b. relates cash, short-term investments, and net receivables to current liabilities. c. is calculated by taking one item from the income statement and one item from the balance sheet.
d. is the same as the current ratio except it is rounded to the nearest whole percent. 36. If a stockholder receives a dividend that reduces retained earnings by the fair market value of the stock, the stockholder has received a large stock dividend. cash dividend. contingent dividend.
d. small stock dividend. 37. A $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. The entry to record the retirement would include a
38. At December 31, 2012, Gammon Inc. has these data on its security investments: Security Cost Fair Value 12/31/12 Trading $ 140,000 $192,000 Available-for-sale 137,000 125,000 If the available-for-sale securities are held as long-term investments, which of the following will be recorded to adjust the securities to fair value?
Unrealized Gain ¾ Income 40,000 b. Unrealized Loss ¾ Income 12,000 Securities 40,000 Unrealized Gain ¾ Income 52,000
c. Market Adjustment ¾ Trading 52,000 Unrealized Gain ¾ Income 52,000 Unrealized Gain or Loss ¾ Equity 12,000 Market Adjustment ¾ Available-for-Sale 12,000
d. Unrealized Gain ¾ Income 52,000 Market Adjustment ¾ Trading 52,000 Market Adjustment ¾ Available-for-Sale 12,000 Unrealized Gain or Loss ¾ Equity 12,000
39. The following data are available for Nemo Corporation. Sale of land $250,000 Sale of equipment $125,000 Issuance of common stock 140,000 Purchase of equipment 60,000 Payment of cash dividends 120,000 Net cash provided by investing activities is:
40. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $ 45,000
Accounts receivable (net) 25,000 Inventory 20,000 Property, plant and equipment 210,000 Total Assets $300,000 Liabilities and Stockholders’ Equity Current liabilities $ 50,000 Long-term liabilities 90,000 Stockholders’ equity—common
160,000 Total Liabilities and Stockholders’ Equity $300,000 Income Statement Sales $ 120,000 Cost of goods sold 66,000 Gross profit 54,000 Operating expenses 18,000
Net income $ 36,000 Number of shares of common stock 6,000 Market price of common stock $33 Dividends per share .50 What is the price-earnings ratio for Sampson? a. 5.5 times b. 1.1 times
c. 6 times 6.6 times

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture