Name: 26. The date on which a cash dividend becomes a binding legal obligation i

Question

Name: 26. The date on which a cash dividend becomes a binding legal obligation is on the a. b. c. d. date of record. declaration date. last day of the fiscal year end. payment date. 27. Using this data, answer the following questions; Sales, $905,000; cost of merchandise sold, S540,000; administrative expenses, $10,000; interest exp $20,000; rent revenue, $25,000; selling expenses, $90,000. How much is net income? a. 235,000 C. 365,000 d. 365,000 b. 270,000 -28. The classified balance sheet will have liabilities divided into the following subsections Current Liabilities and Long-Term Liabilities a. b. Current Liabilities and Other Liabilities Other Liabilities and Long-Term Liabilities d. c. Present Liabilities and Tomorrow's Liabilities Accounts payable Accounts receivable Accrued liabilities Cash Intangible assets Inventory Long-term investments Long-term liabilities Marketable securities Notes payable (short-term) Property, plant, and equipment Prepaid expenses $30,000 65,000 7,000 20,000 40,000 72,000 100,000 75,000 36,000 20,000 625,000 2,000 Based on the above data, what is the amount of working capital? a. $64,000 b. $138,000 c. $238,000 d. $178,000 29. 30. Based on the above data, what is the quick ratio, rounded to one decimal point? a. 2.1 d. 2.4

Explanation / Answer

Q26. Answer is b. Declaration date Q27. Answer is b. $ 270000 Explanation: Total revenue (905000+25000) 930000 Less: Expense Cost of goods sold 540000 Admin expense 10000 Interest exense 20000 Selling expense 90000 Net income 270000 Q28. Answer is a. Current liabilitiess and Long term liabilities Q29. Answer is b. $ 138000 explanation: Current assets: Accounts receivable 65000 cash 20000 Inventory 72000 marketable securities 36000 prepaid eexpense 2000 Total current assets 195000 Current liabilities: Accounts payable 30000 Accrued liabilities 7000 Notes payable 20000 Total currrent liabilitie 57000 Working capital 138000 Q30. Answer is a. 2.1 Quick assets: 195000-2000-72000= 121000 Current liabilities: 57000 Quick ratio: Quick assets / Current liabilities 121000/57000 = 2.123

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