18. Hoosher Enterprises purchased an 18-month insurance policy on May 31, 2014 f

Question

18. Hoosher Enterprises purchased an 18-month insurance policy on May 31, 2014 for $7.200 The December 31, 2014 balance sheet would report Prepaid Insurance of a. S0 because Prepaid Insurance is reported on the Income Statement. b. $2,800 C. $4,400 d. $7,200. 19. Earnings per share is a a. profitability ratio. b. liquidity ratio c. solvency ratio. d. trending ratio 20. Using the following balance sheet and income statement data, what is the earnings per share? $ 21,000 39,000 21,000 Current assets $ 16,000 8,000 80,000 60,000 Net income Stockholders' equity Total liabilities Current liabilities Average assets Total assets Average common shares outstanding was 10,000. a. $3.90 b. $6.00 c. $2.10 d. $0.48

Explanation / Answer

18. option b is correct:

19. option a is correct, EPS is a profitability ratio

20. option c is correct:

a Insurance premium paid         7,200 b Validity 1.5 years c=a/b Insurance expense per year         4,800 d=c/12 Insurance expense per month            400 e Number of months insurance expired                 7 f=d*e Insurance expense         2,800

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