Deck 15: Financial Statements and Ratios

Question 1

You own a business that has assets of $148,000. If your equity is $55,000, what is the amount of your liabilities?

A) $203,000
B) $93,000
C) $122,000
D) $98,000

Answer 1

$93,000

Question 2

Into what category does the following balance sheet item fall: Land

A) Long-term Liability
B) Stockholder's (or Owner's) Equity
C) Current Assets
D) Fixed Assets (Property, Plant, and Equipment)

Answer 2

Fixed Assets (Property, Plant, and Equipment)

Question 3

Into what category does the following balance sheet item fall: Goodwill

A) Current asset
B) Fixed asset
C) Intangible asset
D) Current liability

Answer 3

Intangible asset

Question 4

____________________ are financial ratios that indicate how effectively a company uses its resources to generate sales.

Question 5

The rights of the creditors of a business are known as ____________________ and represent debts of the business.

Question 6

The primary tools of financial analysis are financial ____________________.

Question 7

The rights of the owners of a business are known as ____________________.

Question 8

You are considering buying a business that has assets of $148,000. Owner's equity is shown as $45,000. What is the amount of liabilities in that business?

A) $103,000
B) $93,000
C) $112,000
D) $108,000

Question 9

In vertical analysis, each item on the balance sheet is expressed as a percent of the total ____________________.

Question 10

The difference between current assets and current liabilities at a point in time is known as ____________________.

Question 11

In ____________________ analysis, each item of the current period is compared in dollars and percent with the corresponding item from a previous period.

Question 12

A(n) ____________________ balance sheet shows data from the current year side by side with the figures from one or more previous periods.

Question 13

Into what category does the following balance sheet item fall: Note Receivable (3-month)

A) Current asset
B) Fixed asset
C) Intangible asset
D) Current liability

Question 14

Into what category does the following balance sheet item fall: Salaries Payable

A) Intangible Liability
B) Intangible Asset
C) Current Asset
D) Current Liability

Question 15

Voltron Electrical has assets of $157,000 and liabilities of $71,000. What is the owner's equity?

A) $158,000
B) $86,000
C) $81,000
D) $117,000

Question 16

Your partnership business has liabilities of $38,000. If your equity is $85,000, what is the amount of your assets?

A) $103,000
B) $123,000
C) $122,000
D) $108,000

Question 17

Your small printing shop has assets of $18,000. If your equity is $5,000, what is the amount of your liabilities?

A) $3,000
B) $13,000
C) $2,000
D) $8,000

Question 18

____________________ ratios tell how well a company can pay off its short-term debts and meet unexpected needs for cash.

Question 19

A(n) ____________________ is a summary of the operations of a business over a period of time.

Question 20

____________________ provides a dynamic picture of a firm by showing its financial direction over a period of time.

Question 21

Use the following financial information to find the entry you would make on an income statement for COST OF GOODS SOLD for the year ended December 31, 2011: Gross Sales, $180,000; Sales Returns and Allowances, $9,000; Sales Discounts, $6,300; Merchandise Inventory, January 1, 2011, $60,900; Merchandise Inventory, December 31, 2011, $66,700; Net Purchases, $58,300; Freight In, $600; Salaries, $84,700; Rent, $22,000; Utilities, $1,125; Insurance, $2,025; and Income Tax, $17,750.

A) $45,985
B) $30,800
C) $53,100
D) $65,754

Question 22

Perform a vertical analysis for the entry "Sales Returns and Allowances" on the portion of an income statement shown below. (Round to the nearest tenth) $$\begin{array} { l l } \text { Revenue } & \\\text { Gross Sales } & \$ 288,000 \\\text { Less: Sales Returns and Allowances } & 7,600 \\\text { Net Sales } & 280,400 \\\text { Cost of Good Sold } & \\\text { Merchandise Inventory, Jan. } 1 & 47,500 \\\text { Net purchases } & 64,300 \\\text { Goods Available for Sale } & 112,375 \\\text { Less: Merchandise Inventory, Dec. } 31 & 77,800 \\\text { Cost of Goods Sold } & 34,575 \\\text { Gross Margin } & \$ 245,825\end{array}$$

A) 2.6%
B) 2.7%
C) 3.9%
D) 3.1%

Question 23

Perform a horizontal analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { l l l l } \hline \text { Assets } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } & \begin{array} { l } \text { Increase/Decrease } \\\text { Amount Percent }\end{array} \\\hline \text { Current Assets } & & \\\text { Cash } & \$ 33,700 & \$ 43,500 \\\text { Accounts Receivables } & 40,000 & 40,800 \\\text { Merchandise Inventory } & 41,300 & 35,500 \\\text { Supplies } & 5,300 & 3,300 \\\text { Total Current Assets } & 120,300 & 123,100 \\\text { Property, Plant, and Equipment } & & \\\text { Machinery and Equipment } & 30,700 & 37,100 \\\text { Total Assets } & \$ 151,000 & \$ 160,200 \\\hline\end{array}$$

A) (2.0%)
B) (19.6%)
C) (3.5%)
D) (8.9%)

Question 24

Perform a horizontal analysis for the entry "Sales Returns and Allowances" shown on the income statement portion below. (Round to the nearest tenth) $\begin{array}{c}\begin{array}{lll}\\\\ \hline\text { Revenue}\\ \text { Gross Sales}\\ \text { Less: Sales Returns and Allowances Net Sales}\\\text { Net Sales }\\ \text { Cost of Good Sold }\\ \text { Merchandise Inventory, Jan. 1 }\\ \text {Net purchases}\\ \text { Rent and Utilities}\\ \text { Goods Available for Sale }\\ \text { Less: Merchandise Inventory, Dec. 31}\\ \text { Cost of Goods Sold}\\ \text {Gross Margin }\end{array}\begin{array}{lll}\\2012\\ \hline \\\$ 170,000 \\6,100 \\163,900 \\\\\\34,000 \\72,900 \\106,900 \\86,500 \\20,400 \\\$ 143,500 \\ \end{array}\begin{array}{lll}\\2011\\ \hline\\\$ 205,700 \\4,300 \\201,400 \\\\\\30,600 \\70,000 \\100,600 \\60,600 \\40,000 \\\$ 161,400 \end{array}\begin{array}{lll} \text { Increase/Decrease }\\ \text { Amount Percent}\\ \hline\\ \\ \\ \\\\\\\\\\\\\\\\\\\end{array}\end{array}$

A) 1.3%
B) 3.7%
C) 12.8%
D) 41.9%

Question 25

Panhead's Bike Shop had net sales of $382,500 and the cost of goods sold were $172,300. Operating expenses were $107,645 and owner's equity is $437,645. Calculate the net profit margin. (Round to the nearest tenth)

A) 40.4%
B) 34.8%
C) 26.8%
D) 22.8%

Question 26

Use the following financial information to find the entry you would make on an income statement for GROSS MARGIN for the year ended December 31, 2011: Gross Sales, $231,000; Sales Returns and Allowances, $7,700; Sales Discounts, $6,800; Merchandise Inventory, January 1, 2011, $55,200; Merchandise Inventory, December 31, 2011, $61,300; Net Purchases, $81,900; Freight In, $950; Salaries, $87,000; Rent, $20,600; Utilities, $1,500; Insurance, $2,350; and Income Tax, $17,350.

A) $216,500
B) $139,750
C) $128,800
D) $87,700

Question 27

Perform a vertical analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { | l l | } \hline \text { Assets } & \\\hline \text { Current Assets } & \$ 13,000 \\\text { Cash } & 26,000 \\\text { Accounts Receivables } & 40,000 \\\text { Merchandise Inventory } & 2,000 \\\text { Supplies } & 81,000 \\\text { Total Current Assets } & \\\text { Property, Plant, and Equipment } & 13,000 \\\text { Machinery and Equipment } & \$ 94,000 \\ \text { Total Assets } &\end{array}$$

A) 42.6%
B) 13.8%
C) 37.7%
D) 27.7%

Question 28

Perform a horizontal analysis for the entry "Gross Sales" shown on the income statement portion below. (Round to the nearest tenth) $\begin{array}{c}\begin{array}{lll}\\\\ \hline\text { Revenue}\\ \text { Gross Sales}\\ \text { Less: Sales Returns and Allowances Net Sales}\\\text { Net Sales }\\ \text { Taxes Payable}\\ \text { Operating Expenses }\\ \text { Salaries and Benefits}\\ \text { Rent and Utilities}\\ \text { Advertising and Promotions}\\ \text { Insurance}\\ \text { Miscellaneous Expenses}\\ \text {Total Operating Expenses}\end{array}\begin{array}{lll}\\2012\\ \hline \\\$ 258,000 \\7,100 \\250,900 \\\\\\84,600 \\21,300 \\1,425 \\2,250 \\17,000 \\\$ 126,575 \end{array}\begin{array}{lll}\\2011\\ \hline\\\$ 193,500 \\4,800 \\188,700 \\\\\\106,600 \\24,900 \\900 \\1,900 \\15,300 \\\$ 149,600 \end{array}\begin{array}{lll} \text { Increase/Decrease }\\ \text { Amount Percent}\\ \hline\\ \\ \\ \\\\\\\\\\\\\\\\\\\end{array}\end{array}$

A) 33.3%
B) 10.5%
C) 3.3%
D) 23.9%

Question 29

Use the following financial information to find the entry you would make on an income statement for INCOME BEFORE TAXES for the year ended December 31, 2011: Gross Sales, $223,000; Sales Returns and Allowances, $11,200; Sales Discounts, $1,800; Merchandise Inventory, January 1, 2011, $67,600; Merchandise Inventory, December 31, 2011, $78,300; Net Purchases, $84,000; Freight In, $950; Salaries, $107,200; Rent, $19,500; Utilities, $1,450; Insurance, $2,150; and Income Tax, $14,900.

A) $130,300
B) $135,750
C) ($9,450)
D) $5,450

Question 30

Use the following financial information to find the entry you would make on an income statement for NET INCOME (LOSS) for the year ended December 31, 2011: Gross Sales, $123,000; Sales Returns and Allowances, $9,300; Sales Discounts, $8,700; Merchandise Inventory, January 1, 2011, $89,000; Merchandise inventory, December 31, 2011, $109,500; Net Purchases, $74,700; Freight In, $575; Salaries, $107,800; Rent, $20,100; Utilities, $1,425; Insurance, $2,250; and Income Tax, $15,900.

A) $81,350
B) $97,250
C) ($97,250)
D) ($15,900)

Question 31

Use the following financial information to find the entry you would make on an income statement for NET INCOME (LOSS) for the year ended December 31, 2011: Gross Sales, $223,000; Sales Returns and Allowances, $11,200; Sales Discounts, $1,800; Merchandise Inventory, January 1, 2011, $67,600; Merchandise Inventory, December 31, 2011, $78,300; Net Purchases, $84,000; Freight In, $950; Salaries, $107,200; Rent, $19,500; Utilities, $1,450; Insurance, $2,150; and Income Tax, $14,900.

A) $135,750
B) $210,000
C) $9,450
D) ($9,450)

Question 32

Use the following financial information to find the entry you would make on an income statement for NET INCOME (LOSS) for the year ended December 31, 2011: Gross Sales, $110,000; Sales Returns and Allowances, $8,000; Sales Discounts, $2,400; Merchandise Inventory, January 1, 2011, $50,000; Merchandise Inventory, December 31, 2011, $43,100; Net Purchases, $80,500; Freight In, $975; Salaries, $92,900; Rent, $15,500; Utilities, $1,275; Insurance, $2,450; and Income Tax, $15,650.

A) $23,458
B) ($98,544)
C) $65,782
D) ($116,550)

Question 33

Use the following financial information to find the entry you would make on an income statement for COST OF GOODS SOLD for the year ended December 31, 2011: Gross Sales, $241,000; Sales Returns and Allowances, $5,200; Sales Discounts, $1,000; Merchandise Inventory, January 1, 2011, $62,900; Merchandise Inventory, December 31, 2011, $70,200; net purchases, $95,800; Freight In, $525; Salaries, $93,200; Rent, $17,900; Utilities, $1,125; Insurance, $2,025; and Income Tax, $16,950.

A) $159,225
B) $70,200
C) $89,025
D) $114,250

Question 34

What entry would you make on an income statement for NET SALES for the year ended December 31, 2011? Gross Sales, $200,000; Sales Returns and Allowances, $5,800; Sales Discounts, $5,700; Merchandise Inventory, January 1, 2011, $67,100; Merchandise Inventory, December 31, 2011, $51,900; Net Purchases, $89,200; Freight In, $700; Salaries, $81,800; Rent, $18,600; Utilities, $1,125; Insurance, $2,175; and Income Tax, $14,900.

A) $105,100
B) $118,600
C) $157,000
D) $188,500

Question 35

Find the entry you would make on an income statement for TOTAL OPERATING EXPENSES for the year ended December 31, 2011: Gross Sales, $141,000; Sales Returns and Allowances, $7,600; Sales Discounts, $9,600; Merchandise Inventory, January 1, 2011, $50,300; Merchandise Inventory, December 31, 2011, $42,400; Net Purchases, $62,100; Freight In, $1,000; Salaries, $80,500; Rent, $18,900; Utilities, $1,225; Insurance, $2,250; and Income Tax, $17,400.

A) $71,000
B) $102,875
C) $120,275
D) $123,800

Question 36

Use the following financial information to find the entry you would make on an income statement for GROSS MARGIN for the year ended December 31, 2011: Gross Sales, $241,000; Sales Returns and Allowances, $7,500; Sales Discounts, $7,800; Merchandise Inventory, January 1, 2011, $45,200; Merchandise Inventory, December 31, 2011, $71,300; Net Purchases, $91,900; Freight In, $1950; Salaries, $97,000; Rent, $30,600; Utilities, $2,500; Insurance, $2,450; and Income Tax, $19,350.

A) $206,500
B) $157,950
C) $138,800
D) $107,700

Question 37

Perform a horizontal analysis for the balance sheet entry "Accounts Payable" given below. (Round to the nearest tenth) $\begin{array}{c}\begin{array}{lll}\\ \text { Liabilities and Owner's Equity}\\ \hline\text { Current Liabilities}\\ \text { Accounts Payable}\\ \text { Salaries Payable}\\ \text { Taxes Payable}\\ \text { Total Current Liabilities}\\ \text { Long-term Liabilities}\\ \text { Debenture Bond}\\ \text { Total Liabilities}\\ \text { Stockholder's Equity}\\ \text { Retained earnings}\\ \text { Total Liabilities and Stockholder's Equity}\end{array}\begin{array}{lll}\\2012\\ \hline \\\$ 9,000 \\7,400 \\5,100 \\21,500\\\\17,000\\38,500\\\\28,000\\\$ 66,500 \end{array}\begin{array}{lll}\\2011\\ \hline\\\$ 8,700 \\6,200 \\3,800 \\18,700\\\\15,700 \\34,400\\\\27,800\\\$ 62,200 \end{array}\begin{array}{lll} \text { Increase/Decrease }\\ \text { Amount Percent}\\ \hline\\ \\ \\ \\\\\\\\\\\\\\\\\end{array}\end{array}$

A) (2.9%)
B) (3.0%)
C) 3.4%
D) (9.2%)

Question 38

Perform a vertical analysis for the balance sheet entry "Accounts Payable" given below. (Round to the nearest tenth) $$\begin{array}{l}\text { Liabilities and Owner's Equity }\\\begin{array} { l l } \hline \text { Current Liabilities } & \\\text { Accounts Payable } & \$ 8,100 \\\text { Sal aries Payable } & 14,600 \\\text { Taxes Payable } & 1,500 \\\text { Total Current Liabilities } & 24,200 \\\text { Long-term Liabilities } & \\\text { Debenture Bond } & 6,000 \\\text { Total Liabilities } & 30,200 \\\text { Stockholder's Equity } & \\\text { Retained earnings } & 6,700 \\\text { Total Liabilities and Stockholder's Equity } & \$ 36,900 \\\hline\end{array}\end{array}$$

A) 22.0%
B) 17.5%
C) 16.9%
D) 14.8%

Question 39

Perform a vertical analysis for the entry "Gross Sales" on the portion of an income statement shown below. (Round to the nearest tenth) $$\begin{array} { l l } \text { Revenue } & \\\text { Gross Sales } & \$ 290,000 \\\text { Less: Sales returns and Allowances } & 10,000 \\\text { Net Sales } & 280,000 \\\text { Operating Expenses } & \\\text { Salaries and Benefits } & 90,900 \\\text { Rent and Utilities } & 21,300 \\\text { Advertising and Promotions } & 1,250 \\\text { Insurance } & 2,500 \\\text { Miscellaneous Expenses } & 17,500 \\\text { Total Operating Expenses } & \$ 133,450 \\\hline\end{array}$$

A) 105.9%
B) 103.6%
C) 13.1%
D) 3.6%

Question 40

Perform a vertical analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { | l l | } \hline \text { Assets } & \\\hline \text { Current Assets } & \$ 23,000 \\\text { Cash } & 16,000 \\\text { Accounts Receivables } & 50,000 \\\text { Merchandise Inventory } & 2,500 \\\text { Supplies } & 91,500 \\\text { Total Current Assets } & \\\text { Property, Plant, and Equipment } & 23,000 \\\text { Machinery and Equipment } & \$ 114,500 \\ \text { Total Assets } &\\\hline\end{array}$$

A) 14.6%
B) 13.8%
C) 17.7%
D) 14.0%

Question 41

You own a business that has current liabilities of $117,300; cash in the amount $5,600; securities valued at $98,400; and accounts receivable of $85,900. Calculate the acid test ratio. (Round to the nearest hundredth)

A) 1.56:1
B) 1.62:1
C) 1.89:1
D) 2.02:1

Question 42

From the following data, find the 2014 Total Assets index number. (Round to nearest tenth percent) $$\begin{array}{l}\text { Thunderdome Corporation-5-Year Selected Financial Data }\\\begin{array} { | l | l | l | l | l | l | } \hline & 2015 & 2014 & 2013 & 2012 & 2011 \\\hline \text { Net Sales } & 245,890 & 270,210 & 281,470 & 263,060 & 271,200 \\\hline \text { Net Income } & 29,830 & 28,140 & 30,260 & 30,260 & 32,540 \\\hline \text { Total Assets } & 75,870 & 75,120 & 79,920 & 84,130 & 89,500 \\\hline\end{array}\end{array}$$

A) 83.9%
B) 58.5%
C) 79.6%
D) 63.2%

Question 43

Alan's Chairs has current assets of $138,000 and current liabilities of $102,750. Find the current ratio. (Round to the nearest hundredth)

A) 59:1
B) 1.62:1
C) 1.34:1
D) .74:1

Question 44

Clara's Clothing Store had accounts receivable of $53,261.98 and credit sales of $1,620,052. Calculate the average collection period. (Round to the nearest day)

A) 16 days
B) 12 days
C) 18 days
D) 14 days

Question 45

The Cowboy Shop has current liabilities of $151,200; cash in the amount $13,900; securities valued at $95,250; and accounts receivable of $157,300. Calculate the acid test ratio. (Round to the nearest hundredth)

A) 1.76:1
B) 1.53:1
C) .57:1
D) .93:1

Question 46

Ward Inc. had a beginning inventory of $26,800 and an ending inventory of $52,650. If the cost of goods sold was $305,000, calculate the inventory turnover. (Round to the nearest tenth)

A) 7.4 times
B) 8.7 times
C) 6.8 times
D) 7.7 times

Question 47

Classic Vehicles had a beginning inventory of $156,700 and an ending inventory of $98,500. If the cost of goods sold was $152,100, calculate the inventory turnover. (Round to the nearest tenth)

A) 1.3 times
B) 1.1 times
C) 1.2 times
D) 1.7 times

Question 48

Shari's Tennis Club had net sales of $186,400 and the cost of goods sold were $88,760. Operating expenses were $35,100 and owner's equity is $553,400. Calculate the return on investment. (Round to the nearest tenth)

A) 15.0%
B) 11.3%
C) 12.2%
D) 13.6%

Question 49

Matie's Playground Equipment has current assets of $128,400 and current liabilities of $78,950. Find the current ratio. (Round to the nearest hundredth)

A) .78:1
B) 1.63:1
C) .61:1
D) .75:1

Question 50

Hawk's Nest Corp had net sales of $61,300 and total assets of $155,400. Find the asset turnover ratio. (Round to the nearest hundredth)

A) 0.39:1
B) 1.08:1
C) 28.09:1
D) 230.96:1

Question 51

You own a business that has assets of $139,300 and liabilities of $74,800. What is your current ratio? (Round to the nearest hundredth)

A) 1.46:1
B) 1.52:1
C) 1.86:1
D) 2.89:1

Question 52

Stan's Balloon Rides had net sales of $280,611 and the cost of goods sold were $110,900. Operating expenses were $45,315 and owner's equity is $423,600. Calculate the return on investment. (Round to the nearest tenth)

A) 29.4%
B) 18.8%
C) 24.1%
D) 28.6%

Question 53

You own a business that has assets of $279,000. If your equity is $87,000, what is the amount of your liabilities?

A) $279,000
B) $87,000
C) $192,000
D) $98,000

Question 54

From the following data, find the 2013 Net Income index number. (Round to nearest tenth percent) $$\begin{array}{l}\text { The Fun Corporation-5-Year Selected Financial Data }\\\begin{array} { | l | l | l | l | l | l | } \hline & 2015 & 2014 & 2013 & 2012 & 2011 \\\hline \text { Net Sales } & 305,860 & 318,600 & 306,350 & 297,430 & 291,600 \\\hline \text { Net Income } & 626,600 & 620,400 & 681,760 & 710,170 & 717,340 \\\hline \text { Total Assets } & 386,150 & 386,150 & 354,270 & 357,850 & 344,090 \\\hline\end{array}\end{array}$$

A) 95.0%
B) 86.2%
C) 35.4%
D) 23.9%

Question 55

Silver Bullet Ranch had net sales of $340,000 and total assets of $208,500. Find the asset turnover ratio. (Round to the nearest hundredth)

A) 1.48:1
B) 0.83:1
C) 112.0:1
D) 1.63:1

Question 56

You own a business that has assets of $149,300 and liabilities of $83,800. What is your current ratio? (Round to the nearest hundredth)

A) 1.56:1
B) 1.62:1
C) 1.78:1
D) 2.19:1

Question 57

The Earhardt Flight School had accounts receivable of $98,500 and an average collection period of 35 days. What were the total credit sales for Earhardt?

A) $1,876,319.30
B) $588,221.60
C) $1,027,214.29
D) $754,296.48

Question 58

Sports and More Inc. has total assets of $162,500. If total equity is $72,250, find the debt-to-assets ratio. (Round to the nearest hundredth)

A) 1.38:1
B) 1.29:1
C) .56:1
D) .44:1

Question 59

Lia's Swim Shoppe has current liabilities of $298,100; cash in the amount $52,500; securities valued at $95,400; and accounts receivable of $158,200. Calculate the acid test ratio. (Round to the nearest hundredth)

A) 1.80:1
B) .85:1
C) .97:1
D) 1.03:1

Question 60

Trina Corp has total assets of $131,000. If total liabilities are $54,300, find the debt-to-equity ratio. (Round to the nearest hundredth)

A) .41:1
B) 1.71:1
C) .71:1
D) 1.41:1

Question 61

Narrative 15-1
For the balance sheet items, indicate the appropriate category:
a.Current Asset
b.Fixed Asset
c.Current Liability
d.Long-Term Liability
e.Owner's Equity
Refer to Narrative in your text 15-1. Preferred Stock

Question 62

Narrative 15-1
For the balance sheet items, indicate the appropriate category:
a.Current Asset
b.Fixed Asset
c.Current Liability
d.Long-Term Liability
e.Owner's Equity
Refer to Narrative in your text 15-1. Retained Earnings

Question 63

Into what category does the following balance sheet item fall: Cash

A) Long-term Liability
B) Stockholder's (or Owner's) Equity
C) Current Assets
D) Fixed Asset (Property, Plant, and Equipment)

Question 64

Jamie's Natural Foods had net sales of $329,500 and the cost of goods sold were $192,400. Operating expenses were $89,672 and owner's equity is $328,775. Calculate the net profit margin. (Round to the nearest tenth)

A) 20.4%
B) 14.4%
C) 26.8%
D) 22.8%

Question 65

Calculate the quick assets and acid test ratios.

Question 66

Calculate the amount of owner's equity and the two leverage ratios:

Question 67

Calculate the missing information based on the format of the income statement:

Question 68

Calculate the average inventory and inventory turnover ratios:

Question 69

Perform a vertical analysis for the entry "Gross Sales" on the portion of an income statement shown below. (Round to the nearest tenth) $$\begin{array} { l l } \text { Revenue } & \\\text { Gross Sales } & \$ 320,000 \\\text { Less: Sales returns and Allowances } & 15,000 \\\text { Net Sales } & 305,000 \\\text { Operating Expenses } & \\\text { Salaries and Benefits } & 100,700 \\\text { Rent and Utilities } & 25,400 \\\text { Advertising and Promotions } & 2,380 \\\text { Insurance } & 2,700 \\\text { Miscellaneous Expenses } & 19,395 \\\text { Total Operating Expenses } & \$ 150,575 \\\hline\end{array}$$

A) 104.9%
B) 103.6%
C) 95.3%
D) 58.6%

Question 70

Narrative 15-1
For the balance sheet items, indicate the appropriate category:
a.Current Asset
b.Fixed Asset
c.Current Liability
d.Long-Term Liability
e.Owner's Equity
Refer to Narrative in your text 15-1. R. Smith, Capital

Question 71

Calculate the average inventory and inventory turnover ratios:

Question 72

Calculate the value according to the accounting equation:

Question 73

Calculate the amount of owner's equity and the two leverage ratios:

Question 74

Find the entry you would make on an income statement for TOTAL OPERATING EXPENSES for the year ended December 31, 2007: Gross Sales, $161,000; Sales Returns and Allowances, $9,600; Sales Discounts, $11,600; Merchandise Inventory, January 1, 2011, $52,500; Merchandise Inventory, December 31, 2011, $62,500; Net Purchases, $82,300; Freight In, $3,000; Salaries, $94,700; Rent, $29,800; Utilities, $2,245; Insurance, $3,250; and Income Tax, $19,600.

A) $129,995
B) $102,875
C) $127,750
D) $149,595

Question 75

Calculate the missing information based on the format of the income statement:

Question 76

Calculate the average inventory and inventory turnover ratios:

Question 77

Calculate the value according to the accounting equation:

Question 78

Calculate the missing information based on the format of the income statement:

Question 79

Calculate the amount of working capital and the current ratio for the following companies:

Question 80

Narrative 15-1
For the balance sheet items, indicate the appropriate category:
a.Current Asset
b.Fixed Asset
c.Current Liability
d.Long-Term Liability
e.Owner's Equity
Refer to Narrative in your text 15-1. Common Stock