131. Use the following information to answer questions 44-46.
Accounts payable
|
$ 30,000
|
Accounts receivable
|
65,000
|
Accrued liabilities
|
7,000
|
Cash
|
25,000
|
Intangible assets
|
40,000
|
Inventory
|
72,000
|
Long-term investments
|
100,000
|
Long-term liabilities
|
75,000
|
Marketable securities
|
36,000
|
Notes payable (short-term)
|
20,000
|
Property, plant, and equipment
|
625,000
|
Prepaid expenses
|
2,000
|
|
|
Based on the above data, what is the quick ratio, rounded to one decimal point?
A. 2.2
B. 3.5
C. 3.0
D. 1.6
132. The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is sometimes referred to as
A. leverage
B. solvency
C. yield
D. quick assets
133. Use the following information for questions 48-51.
The balance sheets at the end of each of the first two years of operations indicate the following:
|
2010
|
2009
|
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
|
|
|
|
If net income is $115,000 and interest expense is $30,000 for 2010 what is the rate earned on total assets for 2010 (round percent to one decimal point)?
A. 9.3%
B. 10.1%
C. 8.0%
D. 7.4%
134. Use the following information for questions 48-51.
The balance sheets at the end of each of the first two years of operations indicate the following:
|
2010
|
2009
|
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
|
|
|
|
If net income is $115,000 and interest expense is $30,000 for 2010, what is the rate earned on stockholders' equity for 2010 (round percent to one decimal point)?
A. 10.6%
B. 11.2%
C. 12.4%
D. 15.6%
135. Use the following information for questions 48-51.
The balance sheets at the end of each of the first two years of operations indicate the following:
|
2010
|
2009
|
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
|
|
|
|
If net income is $115,000 and interest expense is $30,000 for 2010, what are the earnings per share on common stock for 2010, (round to two decimal places)?
A. $1.92
B. $1.89
C. $1.77
D. $1.42
136. Use the following information for questions 48-51.
The balance sheets at the end of each of the first two years of operations indicate the following:
|
2010
|
2009
|
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
|
|
|
|
If net income is $115,000 and interest expense is $30,000 for 2010, and the market price is $30, What is the price-earnings ratio on common stock for 2010. (round to one decimal point)?
A. 17.0
B. 12.1
C. 12.4
D. 15.9
137. The numerator of the rate earned on common stockholders' equity ratio is equal to
A. net income
B. net income minus preferred dividends
C. income plus interest expense
D. income minus interest expense
138. The numerator of the rate earned on total assets ratio is equal to
A. net income
B. income before taxes
C. income plus interest expense
D. net income minus preferred dividends
139. For most profitable companies, the rate earned on stockholders' equity will be less than
A. the rate earned on total assets
B. the rate earned on total liabilities and stockholders' equity
C. the rate earned on sales
D. the rate earned on common stockholders' equity
140. The following information is available for Gomez Company.:
|
2009
|
Market price per share of common stock
|
$25.00
|
Earnings per share on common stock
|
1.25
|
|
|
Which of the following statements is correct?
A. The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of 2009.
B. The price-earnings ratio is 5.0% and a share of common stock was selling for 5.0% more than the amount of earnings per share at the end of 2009.
C. The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of 2009.
D. The market price per share and the earnings per share are not statistically related to each other.