Question 1

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

Accepted Answer

The acid test ratio is calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities. Plugging in the given values: ($5,600 + $98,400 + $85,900) / $117,300 = $190,000 / $117,300 = 1.62:1.

Question 2

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%

Accepted Answer

The answer of From the following data, find the 2014...

Question 3

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

Accepted Answer

The answer of Alan's Chairs has current assets of $138,000...

Question 4

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

Accepted Answer

The answer of Clara's Clothing Store had accounts receivable of...

Question 5

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

Accepted Answer

The acid test ratio is calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities. Plugging in the given values: ($13,900 + $95,250 + $157,300) / $151,200 = $266,450 / $151,200 = 1.76:1.

Question 6

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

Accepted Answer

The inventory turnover ratio is calculated as Cost of Goods Sold divided by Average Inventory. Average Inventory = (Beginning Inventory + Ending Inventory) / 2 = ($26,800 + $52,650) / 2 = $39,725. Inventory Turnover = $305,000 / $39,725 = 7.68, which rounds to 7.7 times.

Question 7

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

Accepted Answer

Inventory turnover = (Cost of goods sold) / (Average inventory)Average inventory = (Beginning inventory + Ending inventory) / 2= ($156,700 + $98,500) / 2= $127,600Inventory turnover = $152,100 / $127,600= 1.2 times

Question 8

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%

Accepted Answer

The return on investment (ROI) is calculated by dividing the net income by the owner's equity and then multiplying by 100 to get a percentage. First, calculate the net income: Net Sales - Cost of Goods Sold - Operating Expenses = $186,400 - $88,760 - $35,100 = $62,540. Then, calculate ROI: ($62,540 / $553,400) * 100 = 11.3%.

Question 9

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

Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. So, $128,400 / $78,950 = 1.626, which rounds to 1.63:1.

Question 10

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

Accepted Answer

The asset turnover ratio is calculated by dividing net sales by total assets. So, $61,300 / $155,400 = 0.3947, which rounds to 0.39:1.

Question 11

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

Accepted Answer

The answer of You own a business that has assets...

Question 12

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%

Accepted Answer

The return on investment (ROI) is calculated by dividing the net income by the owner's equity and then multiplying by 100 to get a percentage. First, calculate the net income: Net Sales - Cost of Goods Sold - Operating Expenses = $280,611 - $110,900 - $45,315 = $124,396. Then, calculate ROI: ($124,396 / $423,600) * 100 = 29.4%.

Question 13

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

Accepted Answer

Liabilities can be calculated using the accounting equation: Assets = Liabilities + Equity. Therefore, Liabilities = Assets - Equity = $279,000 - $87,000 = $192,000.

Question 14

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%

Accepted Answer

The Net Income index number for 2013 is calculated as follows:Net Income index number for 2013 = (Net Income for 2013 / Net Income for 2011) x 100= (681,760 / 717,340) x 100= 0.950 x 100= 95.0%

Question 15

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

Accepted Answer

The answer of Silver Bullet Ranch had net sales of...

Question 16

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

Accepted Answer

The answer of You own a business that has assets...

Question 17

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

Accepted Answer

To find the total credit sales, we use the formula: Total Credit Sales = (Accounts Receivable / Average Collection Period) * 365. Plugging in the values: ($98,500 / 35) * 365 = $1,027,214.29.

Question 18

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

Accepted Answer

Debt-to-assets ratio = (Total assets - Total equity) / Total assets= ($162,500 - $72,250) / $162,500= $90,250 / $162,500= 0.5556= 0.56 (rounded to the nearest hundredth)

Question 19

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

Accepted Answer

The acid test ratio is calculated as (Cash + Securities + Accounts Receivable) / Current Liabilities. Here, it is ($52,500 + $95,400 + $158,200) / $298,100 = $306,100 / $298,100 = 1.03:1.

Question 20

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

Accepted Answer

The debt-to-equity ratio is calculated by dividing total liabilities by total equity. First, find the total equity by subtracting total liabilities from total assets: $131,000 - $54,300 = $76,700. Then, calculate the debt-to-equity ratio: $54,300 / $76,700 = 0.707, which rounds to 0.71. Therefore, the debt-to-equity ratio is .71:1.

Quiz 15: Financial Statements and Ratios

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)

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

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)

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)

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)

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)

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)

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)

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)

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)

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)

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

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)

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)

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?

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)

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)

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)