31) Accounts receivable turnover is calculated as:
A) total cost of goods sold / 365 days
B) total net credit sales / average net accounts receivable
C) average net accounts receivable / 365 days
D) total net credit sales / cost of goods sold
32) The times-interest-earned ratio is calculated as:
A) income from operations / interest expense
B) net income / interest expense
C) net income after taxes + interest expense/interest expense
D) income from operations - interest expense/interest expense
33) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
• 10,000 shares of common shares have been issued and outstanding since the company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. The current ratio for Hot Rolled Corporation on December 31, 2011, was:
A) 1.26
B) 0.67
C) 1.45
D) 1.26
34) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
•10,000 shares of common shares have been issued and outstanding since the company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. For the year ending on December 31, 2010, Hot Rolled Corporation's rate of return on net sales was:
A) 0.19
B) 0.18
C) 0.17
D) 0.21
35) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
•10,000 shares of common shares have been issued and outstanding since the
company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. The acid-test ratio for Hot Rolled Corporation on December 31, 2010, was:
A) 0.67
B) 0.57
C) 1.26
D) 1.45
36) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
•10,000 shares of common shares have been issued and outstanding since the company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. The inventory turnover for Hot Rolled Corporation for the year ended December 31, 2011, was:
A) 4.00
B) 3.86
C) 3.61
D) 3.49
37) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
•10,000 shares of common shares have been issued and outstanding since the company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. Hot Rolled Corporation's times-interest-earned ratio for the year ended December 31, 2011, was:
A) 22.75
B) 11.88
C) 11.38
D) 10.88
38) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
•10,000 shares of common shares have been issued and outstanding since the
company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. The accounts receivable turnover for Hot Rolled Corporation for the year ended December 31, 2011, was:
A) 13.45
B) 13.32
C) 12.33
D) 12.11
39) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2011 and 2010:
|
2011
|
2010
|
Cash
|
$ 10,000
|
$ 15,000
|
Net accounts receivable
|
30,000
|
25,000
|
Inventory
|
43,000
|
40,000
|
Prepaid expenses
|
5,000
|
7,000
|
Total current assets
|
88,000
|
87,000
|
Total noncurrent assets
|
112,000
|
114,000
|
Total current liabilities
|
70,000
|
60,000
|
Total noncurrent liabilities
|
40,000
|
45,000
|
Common shares
|
60,000
|
60,000
|
Retained earnings
|
30,000
|
36,000
|
Net credit sales
|
370,000
|
333,000
|
Cost of goods sold
|
150,000
|
160,000
|
Gross margin
|
220,000
|
173,000
|
Income from operations
|
95,000
|
87,000
|
Interest expense
|
8,000
|
8,000
|
Net income
|
70,000
|
57,000
|
•10,000 shares of common shares have been issued and outstanding since the company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011.
Refer to the table above. The debt ratio for Hot Rolled Corporation on December 31, 2011, was:
A) 87
B) 1.82
C) 0.55
D) 0.54
40) The dividend yield is calculated as:
A) dividends per share / market price per share of common shares
B) dividends per share / earnings per share of common shares
C) dividends per share / book value per share of common shares
D) dividends per share / number of shares of common shares