90.Kreighton Manufacturing purchased on credit £50,000 worth of production materials from a British company when the exchange rate was $1.97 per British pound. At the year-end balance sheet date the exchange rate increased to $2.76. If the liability is still unpaid at that time, Kreighton must record a:
A. gain of $39,500.
B. loss of $39,500.
C. gain of $138,000.
D. loss of $138,000.
E. neither a gain nor loss.
91.Marshall Company sold supplies in the amount of €25,000 (euros) to a French company when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate decreased to $0.82. Marshall must record a:
A. gain of $9,750.
B. gain of $20,500.
C. loss of $9,750.
D. loss of $20,500.
E. neither a gain nor loss.
92.Select the correct statement from the following:
A. Profit margin reflects a company's ability to produce net sales from total assets.
B. Total asset turnover reflects the percent of net income in each dollar of net sales.
C. Return on total assets can be separated into gross margin ratio and price-earnings ratio.
D. High returns on total assets are desirable.
E. Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.
93.Cloverton Corporation had net income of $30,000, net sales of $1,000,000, and average total assets of $500,000. Its return on total assets is:
A. 3%
B. 200%
C. 6%
D. 17%
E. 1.5%
94.Canberry Corporation had net income of $80,000, beginning total assets of $640,000 and ending total assets of $580,000. Its return on total assets is:
A. 13.1%
B. 12.5%
C. 13.8%
D. 800%
E. 725%
95.A company has net income of $250,000, net sales of $2,000,000, and average total assets of $1,500,000. Its return on total assets equals:
A. 12.5%.
B. 13.3%.
C. 16.7%.
D. 75.0%.
E. 600.0%.
96.A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets equals:
A. 3.01%.
B. 10.64%.
C. 32.00%.
D. 33.25%.
E. 300.75%.
97.A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:
A. 11.3%; 1.73.
B. 11.3%; 19.5.
C. 1.7%; 19.5.
D. 1.7%; 11.3.
E. 19.5%; 11.3.
98.A company had a profit margin of 10.5% and total asset turnover of 1.84. Its return on total assets was:
A. 5.71%
B. 8.66%
C. 12.34%
D. 13.61%
E. 19.32%
99.A company had net income of $40,000, net sales of $300,000, and average total assets of $200,000. Its profit margin and total asset turnover were respectively:
A. 13.3%; 0.2.
B. 13.3%; 1.5.
C. 2.0%; 1.5.
D. 1.5%; 0.2.
E. 1.5%; 13.3.