the selected data from the general ledger of a corporation at the end of the yea
ID: 2560944 • Letter: T
Question
the selected data from the general ledger of a corporation at the end of the year reveal the following:
cash $65,000
temp investments $50,000
accounts and notes receivables $110,000
inventory $140,000
prepaid expenses $10,000
fixed assets $900,000
accounts payable $125,000
notes payable short term non-interest bearing $100,000
accrued liabilities $25,000
mortgage note payable 5% due in 2025 $250,000
preferred 8% stock, $100 par $100,000
common stock, $10 par $400,000
paid in capital in excess of par, common stock $50,000
retained earnings $225,000
Selected data related to the 12 months of the current year reveal the following:
average common stockholders equity $650,000
average stockholders equity $750,000
average inventory $130,000
average total assets $1,200,000
cash dividends paid on common stock $40,000
cost of goods sold $910,000
income before income tax $140,000
interest expense $20,000
net income $88,000
sales $1,500,000
a common stock was selling for $25 per share at the end of the year.
The working capital is
A. $250,000
B. $200,000
C. $125,000
D. $100,000
E. $150,000
2. The acid-test/quick ratio is
A. 9:1
B. .9:1
C. 7:1
D. .7:1
E. .5:1
3. The current ratio is
A. 4:1
B. 1.5:1
C. 1:1
D. .5:1
E. 2:1
4. The inventory turnover is
A. 11 times
B. 10 times
C. 9 times
D. 8 times
E. 7 times
5. The earnings per share on common stock is
A. $3.50
B. $2.50
C. $1.50
D. $1.00
E. $0.75
Explanation / Answer
1. Working capital is the difference between current assets and current liabililities.
Answer is C.
2. Acid test ratio is current assets minus prepids and inventory which is then divided by current liabilities.
Answer is b.
3. Current ratio is:
Answer is b.
4. Inventory turnover is:
Answer is d.
Particulars Amount ($) Current Assets: Cash $65,000 Temp Investments $50,000 Account and Note Receivable $110,000 Inventory $140,000 Prepaid Expenses $10,000 Total current assets (a) $375,000 Current Liabilities Accounts payables $125,000 Short term notes payable $100,000 Accrued liabilities $25,000 Total current liabilities (b) $250,000 Working capital (a-b) $125,000Related Questions
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