Chapter 9--Financial Statement Analysis
Student: ___________________________________________________________________________
1. The percentage analysis of increases and decreases in corresponding items in comparative financial
2. The percentage analysis of increases and decreases in corresponding items in comparative financial
4. Statements in which all items are expressed as percentages with no dollar amounts are called common-sized
6. Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 10%;
11. The terms acid-test ratio and quick ratio refer to the same ratio which measures the instant debt-paying
12. If a company has current assets totaling $56,000 and current liabilities totaling $40,500, then the company’s
14. If the accounts receivable turnover for the current year has decreased when compared with the ratio for the
15. A balance sheet shows cash, $75,000; marketable securities, $110,000; receivables, $90,000; and $225,000
17. If a firm has an quick ratio of 1, the subsequent payment of an account payable will cause the ratio to
18. A company’s assets are comprised of the following: Cash, $25,000; Receivables, $5,600; Marketable
19. If the current credit terms are 2/10, n/30 for Jones Inc., an accounts receivable turnover of 3 for the current
20. The number of days' sales in inventory is one means of expressing the relationship between net sales and
21. Assuming that the quantities of inventory on hand during the current year were sufficient to meet all
demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover
22. A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety
23. In computing the rate earned on total assets, interest expense is added to net income before dividing by
24. The rate earned on total common stockholders' equity for most thriving businesses will be less than the rate
25. If a company has issued only one class of stock, the earnings per share is determined by dividing net income
27. The ratio of the market price per share of common stock on a specific date to the annual earnings per share
28. Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide
29. Interpreting financial analysis should be considered in light of conditions peculiar to the industry and the
30. The effects of differences in accounting methods are of little importance when analyzing comparable data
31. The percentage analysis of increases and decreases in related items in comparative financial statements is
34. What type of analysis is indicated by the following?
Increase (Decrease)
2013
2012
Amount
Percent
Current assets
$ 380,000
$ 500,000
$(120,000)
(24%)
Fixed assets
1,680,000
1,500,000
180,000
12%
36. An analysis in which all the components of an income statement are expressed as a percentage of net sales is
37. Basic analytical method in which all items are expressed only in relative terms (percentages of a common
base) and are often useful for comparing one company with another or for comparing a company with industry
38. The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is
45. Thomson Company reported the following on its income statement:
Income before income taxes
$420,000
Income tax expense
120,000
Net income
$300,000
An analysis of the income statement revealed that interest expense was $40,000. Thomson Company's number of times interest charges are earned
46. A company with working capital of $500,000 and a current ratio of 2.25 pays a $100,000 short-term
47. A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability.
48. The ratio of the sum of cash and other current assets that can be easily converted to cash to current liabilities
49. Which of the following is included in the computation of the quick ratio?
A. Prepaid rent
B. Accounts receivable
C. Inventory
D. Supplies
50. Which of the following is not included in the computation of the quick ratio?
A. Inventory
B. Marketable securities
C. Accounts receivable
D. Cash
51. Washington Corporation has the following financial data for 2013 and 2012.
2013
2012
ASSETS
Current Assets:
Cash
$ 37,000
$ 9,000
Marketable Securities
8,000
11,000
Accounts Receivable
32,000
25,000
Other Current Assets
13,000
10,000
Total Current Assets
90,000
55,000
Fixed Assets (net)
135,000
120,000
Total Assets
$225,000
$175,000
Liabilities
Current Liabilities
$ 71,000
$ 40,000
Long-term Liabilities
34,000
35,000
Total Liabilities
$105,000
$ 75,000
Total Stockholders’ Equity
$120,000
$100,000
Total Liabilities And Stockholders’ Equity
$225,000
$175,000
What is Washington’s working capital for 2013?
A. $6,000
B. $19,000
C. $0
D. $120,000
52. Washington Corporation has the following financial data for 2013 and 2012.
2013
2012
ASSETS
Current Assets:
Cash
$ 37,000
$ 9,000
Marketable Securities
8,000
11,000
Accounts Receivable
32,000
25,000
Other Current Assets
13,000
10,000
Total Current Assets
90,000
55,000
Fixed Assets (net)
135,000
120,000
Total Assets
$225,000
$175,000
Liabilities
Current Liabilities
$ 71,000
$ 40,000
Long-term Liabilities
34,000
35,000
Total Liabilities
$105,000
$ 75,000
Total Stockholders’ Equity
$120,000
$100,000
Total Liabilities And Stockholders’ Equity
$225,000
$175,000
What is Washington’s current ratio for 2013?
A. 1.08
B. 0.79
C. 1.27
D. 1.50
53. Washington Corporation has the following financial data for 2013 and 2012.
2013
2012
ASSETS
Current Assets:
Cash
$ 37,000
$ 9,000
Marketable Securities
8,000
11,000
Accounts Receivable
32,000
25,000
Other Current Assets
13,000
10,000
Total Current Assets
90,000
55,000
Fixed Assets (net)
135,000
120,000
Total Assets
$225,000
$175,000
Liabilities
Current Liabilities
$ 71,000
$ 40,000
Long-term Liabilities
34,000
35,000
Total Liabilities
$105,000
$ 75,000
Total Stockholders’ Equity
$120,000
$100,000
Total Liabilities And Stockholders’ Equity
$225,000
$175,000
A. Washington’s current ratio has increased, indicating that the company is in a more favorable position to
obtain short-term credit than in 2012.
B. Washington’s current ratio has decreased, indicating that the company is in a less favorable position to obtain
short-term credit than in 2012.
C. Washington’s current ratio has increased, indicating that the company is in a less favorable position to obtain
short-term credit than in 2012.
D. Washington’s current ratio has decreased, indicating that the company is in a more favorable position to
obtain short-term credit than in 2012.
54. Based on the following data for the current year, determine the accounts receivable turnover?
A. 13.14
B. 11.7
C. 10.35
D. 8.3
55. Based on the following data for the current year, determine the accounts receivable turnover?
A. 12.5
B. 14.3
C. 11.1
D. 7.5
56. Based on the following data for the current year, compute the number of days' sales in accounts receivable?
Net sales on account during the year
$ 800,000
Cost of merchandise sold during the year
300,000
Accounts receivable, beginning of year
45,000
Accounts receivable, end of year
35,000
Inventory, beginning of year
90,000
Inventory, end of year
110,000
57. Based on the following data for the current year, determine the number of days' sales in accounts
receivable?
Net sales on account during the year
$1,095,000
Cost of merchandise sold during the year
700,000
Accounts receivable, beginning of year
47,500
Accounts receivable, end of year
37,500
Inventory, beginning of year
190,000
Inventory, end of year
220,000
58. Based on the following data for the current year, determine the inventory turnover?
Net sales on account during the year
$ 517,500
Cost of merchandise sold during the year
450,000
Accounts receivable, beginning of year
50,000
Accounts receivable, end of year
40,000
Inventory, beginning of year
110,000
Inventory, end of year
140,000
59. Based on the following data for the current year, compute the inventory turnover?
Net sales on account during the year
$ 500,000
Cost of merchandise sold during the year
300,000
Accounts receivable, beginning of year
45,000
Accounts receivable, end of year
35,000
Inventory, beginning of year
90,000
Inventory, end of year
110,000
60. The balance sheet and income statement for the year ended 2013 indicate the following:
Bonds payable, 12% (issued 1998, due 2022)
$1,000,000
Preferred 5% stock, $100 par (no change during year)
300,000
Common stock, $50 par (no change during year)
2,000,000
Income before income tax for year
300,000
Income tax for year
80,000
Common dividends paid
50,000
Preferred dividends paid
15,000
Based on the data presented above, what is the number of times interest charges were earned?
A. 3.5
B. 2.2
C. 4.0
D. The answer cannot be determined.
61. An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to:
A. decrease.
B. remain the same.
C. neither increase nor decrease.
D. increase.
62. Based on the following data for the current year, what is the number of days' sales in inventory (rounded to
the next whole day)?
Net sales on account during the year
$1,204,000
Cost of merchandise sold during the year
630,000
Accounts receivable, beginning of year
75,000
Accounts receivable, end of year
85,000
Inventory, beginning of year
81,600
Inventory, end of year
98,600
A. 58
B. 48
C. 53
D. 30
63. Based on the following data, what is the amount of quick assets?
A. $228,000
B. $188,000
C. $116,000
D. $114,000
64. Based on the following data, what is the amount of working capital?
A. $190,000
B. $134,000
C. $118,000
D. $62,000
65. Based on the following data, what is the quick ratio, rounded to one decimal place?
A. 3.2
B. 2.1
C. 1.9
D. 1.4
66. Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or
bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a
68. The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on
69. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what is the rate earned on stockholders' equity
70. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what is the rate earned on common
stockholders' equity for 2013 (round to one decimal place)?
A. 12.3%
B. 14.0%
C. 13.0%
D. 17.4%
71. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what are the earnings per share on common
stock for 2013 (round to two decimal places)?
A. $2.17
B. $2.68
C. $2.02
D. $2.32
72. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, and the market price is $40, what is the
74. The following information is available for Morgan Corporation:
Earnings per share on common stock
1.25
76. Sarbanes-Oxley Act of 2002 requires which of the following report to be prepared by the management of
79. Condensed data taken from the ledger of Crawford Company at December 31, 2013 and 2012, are as
follows:
80. Revenue and expense data for Reuters Company are as follows:
2013
2012
Administrative expenses
$ 24,750
$ 18,000
Cost of goods sold
500,000
375,000
Income tax
11,600
12,000
Net sales
750,000
600,000
Selling expenses
182,250
154,800
81. The following data are taken from the financial statements:
Current
Preceding
Year
Year
Net sales
$3,592,000
$4,056,000
Cost of goods sold
2,092,000
2,656,000
Average monthly inventory
332,000
328,000
Inventory, end of year
372,000
347,000
82. The following items are reported on a company’s balance sheet:
Cash
$300,000
Marketable securities
100,000
Accounts receivable
200,000
Inventory
200,000
Accounts payable
250,000
83. A company reports the following:
Net sales
$750,000
Average accounts receivable (net)
$ 50,000
Chapter 9--Financial Statement Analysis Key
1. The percentage analysis of increases and decreases in corresponding items in comparative financial
2. The percentage analysis of increases and decreases in corresponding items in comparative financial
4. Statements in which all items are expressed as percentages with no dollar amounts are called common-sized
6. Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 10%;
11. The terms acid-test ratio and quick ratio refer to the same ratio which measures the instant debt-paying
12. If a company has current assets totaling $56,000 and current liabilities totaling $40,500, then the company’s
14. If the accounts receivable turnover for the current year has decreased when compared with the ratio for the
15. A balance sheet shows cash, $75,000; marketable securities, $110,000; receivables, $90,000; and $225,000
17. If a firm has an quick ratio of 1, the subsequent payment of an account payable will cause the ratio to
18. A company’s assets are comprised of the following: Cash, $25,000; Receivables, $5,600; Marketable
19. If the current credit terms are 2/10, n/30 for Jones Inc., an accounts receivable turnover of 3 for the current
20. The number of days' sales in inventory is one means of expressing the relationship between net sales and
21. Assuming that the quantities of inventory on hand during the current year were sufficient to meet all
demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover
22. A decrease in the ratio of liabilities to stockholders' equity indicates an improvement in the margin of safety
23. In computing the rate earned on total assets, interest expense is added to net income before dividing by
24. The rate earned on total common stockholders' equity for most thriving businesses will be less than the rate
25. If a company has issued only one class of stock, the earnings per share is determined by dividing net income
27. The ratio of the market price per share of common stock on a specific date to the annual earnings per share
28. Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide
29. Interpreting financial analysis should be considered in light of conditions peculiar to the industry and the
30. The effects of differences in accounting methods are of little importance when analyzing comparable data
31. The percentage analysis of increases and decreases in related items in comparative financial statements is
34. What type of analysis is indicated by the following?
Increase (Decrease)
2013
2012
Amount
Percent
Current assets
$ 380,000
$ 500,000
$(120,000)
(24%)
Fixed assets
1,680,000
1,500,000
180,000
12%
36. An analysis in which all the components of an income statement are expressed as a percentage of net sales is
37. Basic analytical method in which all items are expressed only in relative terms (percentages of a common
base) and are often useful for comparing one company with another or for comparing a company with industry
38. The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is
45. Thomson Company reported the following on its income statement:
Income before income taxes
$420,000
Income tax expense
120,000
Net income
$300,000
An analysis of the income statement revealed that interest expense was $40,000. Thomson Company's number of times interest charges are earned
46. A company with working capital of $500,000 and a current ratio of 2.25 pays a $100,000 short-term
47. A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability.
48. The ratio of the sum of cash and other current assets that can be easily converted to cash to current liabilities
49. Which of the following is included in the computation of the quick ratio?
A. Prepaid rent
B. Accounts receivable
C. Inventory
D. Supplies
50. Which of the following is not included in the computation of the quick ratio?
A. Inventory
B. Marketable securities
C. Accounts receivable
D. Cash
51. Washington Corporation has the following financial data for 2013 and 2012.
2013
2012
ASSETS
Current Assets:
Cash
$ 37,000
$ 9,000
Marketable Securities
8,000
11,000
Accounts Receivable
32,000
25,000
Other Current Assets
13,000
10,000
Total Current Assets
90,000
55,000
Fixed Assets (net)
135,000
120,000
Total Assets
$225,000
$175,000
Liabilities
Current Liabilities
$ 71,000
$ 40,000
Long-term Liabilities
34,000
35,000
Total Liabilities
$105,000
$ 75,000
Total Stockholders’ Equity
$120,000
$100,000
Total Liabilities And Stockholders’ Equity
$225,000
$175,000
What is Washington’s working capital for 2013?
A. $6,000
B. $19,000
C. $0
D. $120,000
52. Washington Corporation has the following financial data for 2013 and 2012.
2013
2012
ASSETS
Current Assets:
Cash
$ 37,000
$ 9,000
Marketable Securities
8,000
11,000
Accounts Receivable
32,000
25,000
Other Current Assets
13,000
10,000
Total Current Assets
90,000
55,000
Fixed Assets (net)
135,000
120,000
Total Assets
$225,000
$175,000
Liabilities
Current Liabilities
$ 71,000
$ 40,000
Long-term Liabilities
34,000
35,000
Total Liabilities
$105,000
$ 75,000
Total Stockholders’ Equity
$120,000
$100,000
Total Liabilities And Stockholders’ Equity
$225,000
$175,000
What is Washington’s current ratio for 2013?
A. 1.08
B. 0.79
C. 1.27
D. 1.50
53. Washington Corporation has the following financial data for 2013 and 2012.
2013
2012
ASSETS
Current Assets:
Cash
$ 37,000
$ 9,000
Marketable Securities
8,000
11,000
Accounts Receivable
32,000
25,000
Other Current Assets
13,000
10,000
Total Current Assets
90,000
55,000
Fixed Assets (net)
135,000
120,000
Total Assets
$225,000
$175,000
Liabilities
Current Liabilities
$ 71,000
$ 40,000
Long-term Liabilities
34,000
35,000
Total Liabilities
$105,000
$ 75,000
Total Stockholders’ Equity
$120,000
$100,000
Total Liabilities And Stockholders’ Equity
$225,000
$175,000
A. Washington’s current ratio has increased, indicating that the company is in a more favorable position to
obtain short-term credit than in 2012.
B. Washington’s current ratio has decreased, indicating that the company is in a less favorable position to obtain
short-term credit than in 2012.
C. Washington’s current ratio has increased, indicating that the company is in a less favorable position to obtain
short-term credit than in 2012.
D. Washington’s current ratio has decreased, indicating that the company is in a more favorable position to
obtain short-term credit than in 2012.
54. Based on the following data for the current year, determine the accounts receivable turnover?
A. 13.14
B. 11.7
C. 10.35
D. 8.3
55. Based on the following data for the current year, determine the accounts receivable turnover?
A. 12.5
B. 14.3
C. 11.1
D. 7.5
56. Based on the following data for the current year, compute the number of days' sales in accounts receivable?
Net sales on account during the year
$ 800,000
Cost of merchandise sold during the year
300,000
Accounts receivable, beginning of year
45,000
Accounts receivable, end of year
35,000
Inventory, beginning of year
90,000
Inventory, end of year
110,000
57. Based on the following data for the current year, determine the number of days' sales in accounts
receivable?
Net sales on account during the year
$1,095,000
Cost of merchandise sold during the year
700,000
Accounts receivable, beginning of year
47,500
Accounts receivable, end of year
37,500
Inventory, beginning of year
190,000
Inventory, end of year
220,000
58. Based on the following data for the current year, determine the inventory turnover?
Net sales on account during the year
$ 517,500
Cost of merchandise sold during the year
450,000
Accounts receivable, beginning of year
50,000
Accounts receivable, end of year
40,000
Inventory, beginning of year
110,000
Inventory, end of year
140,000
59. Based on the following data for the current year, compute the inventory turnover?
Net sales on account during the year
$ 500,000
Cost of merchandise sold during the year
300,000
Accounts receivable, beginning of year
45,000
Accounts receivable, end of year
35,000
Inventory, beginning of year
90,000
Inventory, end of year
110,000
60. The balance sheet and income statement for the year ended 2013 indicate the following:
Bonds payable, 12% (issued 1998, due 2022)
$1,000,000
Preferred 5% stock, $100 par (no change during year)
300,000
Common stock, $50 par (no change during year)
2,000,000
Income before income tax for year
300,000
Income tax for year
80,000
Common dividends paid
50,000
Preferred dividends paid
15,000
Based on the data presented above, what is the number of times interest charges were earned?
A. 3.5
B. 2.2
C. 4.0
D. The answer cannot be determined.
61. An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to:
A. decrease.
B. remain the same.
C. neither increase nor decrease.
D. increase.
62. Based on the following data for the current year, what is the number of days' sales in inventory (rounded to
the next whole day)?
Net sales on account during the year
$1,204,000
Cost of merchandise sold during the year
630,000
Accounts receivable, beginning of year
75,000
Accounts receivable, end of year
85,000
Inventory, beginning of year
81,600
Inventory, end of year
98,600
A. 58
B. 48
C. 53
D. 30
63. Based on the following data, what is the amount of quick assets?
A. $228,000
B. $188,000
C. $116,000
D. $114,000
64. Based on the following data, what is the amount of working capital?
A. $190,000
B. $134,000
C. $118,000
D. $62,000
65. Based on the following data, what is the quick ratio, rounded to one decimal place?
A. 3.2
B. 2.1
C. 1.9
D. 1.4
66. Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or
bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a
68. The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on
69. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what is the rate earned on stockholders' equity
70. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what is the rate earned on common
stockholders' equity for 2013 (round to one decimal place)?
A. 12.3%
B. 14.0%
C. 13.0%
D. 17.4%
71. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, what are the earnings per share on common
stock for 2013 (round to two decimal places)?
A. $2.17
B. $2.68
C. $2.02
D. $2.32
72. The balance sheets at the end of each of the first two years of operations indicate the following:
2013
2012
Total current assets
$600,000
$560,000
Total investments
60,000
40,000
Total property, plant, and equipment
900,000
700,000
Total current liabilities
125,000
80,000
Total long-term liabilities
350,000
250,000
Preferred 9% stock, $100 par
100,000
100,000
Common stock, $10 par
600,000
600,000
Paid-in capital in excess of par--common stock
60,000
60,000
Retained earnings
325,000
210,000
Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2013, and the market price is $40, what is the
74. The following information is available for Morgan Corporation:
Earnings per share on common stock
1.25
76. Sarbanes-Oxley Act of 2002 requires which of the following report to be prepared by the management of
79. Condensed data taken from the ledger of Crawford Company at December 31, 2013 and 2012, are as
follows:
Current assets
$200,000
$180,000
$ 20,000
11.1%
Property, plant, and equipment
450,000
400,000
50,000
12.5%
Total assets
$670,700
$610,000
$ 60,700
10.0%
Common stock
$275,000
$200,000
$ 75,000
37.5%
Retained earnings
125,700
80,000
45,700
57.1%
Total stockholders' equity
$400,700
$280,000
$120,700
43.1%
Total liabilities and stockholders' equity
$670,700
$610,000
$ 60,700
10.0%
80. Revenue and expense data for Reuters Company are as follows:
2013
2012
Administrative expenses
$ 24,750
$ 18,000
Cost of goods sold
500,000
375,000
Income tax
11,600
12,000
Net sales
750,000
600,000
Selling expenses
182,250
154,800
Net sales
$750,000
100.0%
$600,000
100.0%
Administrat
24,750
3.3%
18,000
3.0%
Total
$207,000
27.6%
$172,800
28.8%
Income
$43,000
5.7%
$52,200
8.7%
Income tax
11,600
1.5%
12,000
2.0%
Net income
$31,400
4.2%
$40,200
6.7%
81. The following data are taken from the financial statements:
Current
Preceding
Year
Year
Net sales
$3,592,000
$4,056,000
Cost of goods sold
2,092,000
2,656,000
Average monthly inventory
332,000
328,000
Inventory, end of year
372,000
347,000
(1)
6.3
8.1
(2)
57.9
45.08
daily cost
31.5
82. The following items are reported on a company’s balance sheet:
Cash
$300,000
Marketable securities
100,000
Accounts receivable
200,000
Inventory
200,000
Accounts payable
250,000
83. A company reports the following:
Net sales
$750,000
Average accounts receivable (net)
$ 50,000