Question 1

Complete the following trend analysis for year 4:
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Year 4 } & \text { Year 3 } & \text { Year 2 } & \text { Year 1 (base year) } \
\hline \$ 48,200 & \$ 50,000 & \$ 44,000 & \$ 17,560 \
\hline
\end{array}$$

Accepted Answer

The answer of Complete the following trend analysis for year...

Question 2

Complete the following ratios:
Current assets = $13,000 Inventory = $4,400 Current liabilities = $10,000 Net income = $7,700 Net sales = $24,400
A. Profit margin on sales (round to nearest tenth percent)
B. Acid test (Round to nearest tenth percent.)

Accepted Answer

A. $7,700 / $24,400 = 31.6%; B. ($13,000 - $4,400)/ $10,000 = 86%.

Question 3

Solve for (A)current ratio, (B)acid test (quick), (C)average day's collection (360), (D)asset turnover, and (E)profit margin on sales. Round to nearest hundredth or hundredth percent as needed.
 $$\begin{array} { | l | l | } 
\hline \text { Current Assets } & \$ 21,000 \
\hline \text { Accounts Receivable } & \$ 4,200 \
\hline \text { Current Liabilities } & \$ 16,000 \
\hline \text { Inventory } & \$ 3,500 \
\hline \text { Net Sales } & \$ 41,000 \
\hline \text { Total Assets } & \$ 32,000 \
\hline \text { Net Income } & \$ 6,000 \
\hline
\end{array}$$

Accepted Answer

The answer of Solve for (A)current ratio, (B)acid test (quick),...

Question 4

From the following information, could you help Bill calculate his cost of merchandise sold?
 $$\begin{array} { | l | l | } 
\hline \text { Beginning Inventory } & \$ 2,500 \
\hline \text { Purchases } & \$ 3,000 \
\hline \text { Purchase Returns } & \$ 400 \
\hline \text { Purchase Discounts } & \$ 100 \
\hline \text { Ending Inventory } & \$ 2,100 \
\hline
\end{array}$$

Accepted Answer

The answer of From the following information, could you help...

Question 5

Al Ring received a memo requesting that he complete a trend analysis of the following, using 2014 as the base year. (Round each percent to nearest whole percent.)Can you help Al with this request?
 $$\begin{array} { | l | l | l | l | l | } 
\hline & 2017 & 2016 & 2015 & 2014 \
\hline \text { Sales } & \$ 42,000 ( \mathrm {~A} ) & \$ 60,000 ( \mathrm { D } ) & \$ 80,000 ( \mathrm { G } ) & \$ 95,000 ( \mathrm {~J} ) \
\hline \text { Gross Profit } & \$ 21,000 ( \mathrm {~B} ) & \$ 28,000 ( \mathrm { E } ) & \$ 42,000 ( \mathrm { H } ) & \$ 60,000 ( \mathrm {~K} ) \
\hline \text { Net Income } & \$ 21,000 ( \mathrm { C } ) & \$ 32,000 ( \mathrm {~F} ) & \$ 38,000 ( \mathrm { I } ) & \$ 35,000 ( \mathrm {~L} ) \
\hline
\end{array}$$ *For simplicity, operating expenses have been omitted.

Accepted Answer

The answer of Al Ring received a memo requesting that...

Question 6

Complete:
 $$\begin{array} { | l | l | l | } 
\hline  { \text { Current Assets } } &  { \text { Amount } } & { \begin{array} { c } 
\text { Percent (round to hundredths } \
\% )
\end{array} } \
\hline \text { Cash } & \$ 27,000 & \text { B } \
\hline \text { Accts Receivable } & \$ 12,000 & \text { C } \
\hline \text { Prepaid Rent } & \$ 4,000 & \text { D } \
\hline \text { Merchandise Inventory } & \$ 8,000 & \text { E } \
\hline \text { Total Current Assets } & \text { A } & 100 \% \
\hline
\end{array}$$

Accepted Answer

The answer of Complete:
 \[\begin{array} { | l | l...

Question 7

Complete the following vertical analysis. With cash of $15,750, accounts receivables of $10,800, inventory of $97,000, and PPD expenses of $11,000, what percent of total assets are accounts receivables?

Accepted Answer

$15,750 + $10,800 + $97,000 + $11,000 = $134,550; $10,800 /$ 34,550 = 8%

Question 8

Mel King has asked you to prepare a classified balance sheet for Pad Co. as of December 31, 2017. Ending merchandise inventory was $1,800:
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Cash } & \$ 1,500 & \text { Accounts Payable } & \$ 1,800 \
\hline \text { Prepaid Rent } & \$ 4,500 & \text { Salaries Payable } & \$ 2,250 \
\hline \text { Prepaid Insurance } & \$ 3,000 & \text { Notes Payable (long-term) } & \$ 1,500 \
\hline \text { Office Equipment } & \$ 4,500 & & \
\hline \text { Accum. Depreciation } & \$ 3,000 & \text { J. Pad, Capital } & \$ 9,750 \
\hline
\end{array}$$

Accepted Answer

The answer of Mel King has asked you to prepare...

Question 9

Given gross sales of $50,000, sales returns and allowances of $6,000, beginning inventory of $4,000, net purchases of $8,000, ending inventory of $2,000, and operating expenses of $4,500, calculate net income.

Accepted Answer

$50,000 - $6,000 = $44,000; $4,000 + $8,000 - $2,000 = $10,000; $44,000 - $10,000 = $34,000; $34,000 - $4,500 = $29,500.

Question 10

Al Flynn has gathered the following information. Could you help Al calculate his gross profit?
 $$\begin{array} { | l | l | } 
\hline \text { Gross Sales } & \$ 25,000 \
\hline \text { Sales Discounts } & \$ 3,000 \
\hline \text { Beg Inventory } & \$ 2,000 \
\hline \text { Net Purchases } & \$ 4,000 \
\hline \text { Ending Inventory } & \$ 2,800 \
\hline \text { Operating Expense } & \$ 1,800 \
\hline
\end{array}$$

Accepted Answer

The answer of Al Flynn has gathered the following information....

Question 11

For Monday, John recorded gross sales of $4,000. He also noticed sales returns and sales discounts totaling $800. What are net sales for John?

Accepted Answer

$4,000 - $800 = $3,200.

Question 12

Solve for (A)current ratio, (B)acid test (quick), (C)average day's collection, (D)asset turnover, and (E)profit margin on sales. Round to nearest hundredth or hundredth percent as needed.
 $$\begin{array} { | l | l | } 
\hline \text { Current Assets } & \$ 24,000 \
\hline \text { Accounts Receivable } & \$ 4,300 \
\hline \text { Current Liabilities } & \$ 17,000 \
\hline \text { Inventory } & \$ 3,900 \
\hline \text { Net Sales } & \$ 44,000 \
\hline \text { Total Assets } & \$ 33,000 \
\hline \text { Net Income } & \$ 7,000 \
\hline
\end{array}$$

Accepted Answer

The answer of Solve for (A)current ratio, (B)acid test (quick),...

Question 13

Complete:
 $$\begin{array} { | c | c | c | c | c | } 
\hline & 2017 & 2016 & \text { Increase Amount } & \text { Increase } \% \
\hline \text { Cash } & \$ 10,000 & \$ 8,000 & \mathrm {~A} & \mathrm {~B} \
\hline
\end{array}$$

Accepted Answer

The answer of Complete:
 \[\begin{array} { | c | c...

Question 14

Complete using trend analyses for sales. (Round to nearest percent and use 2014 as the base year.)
 $$\begin{array} { | c | c | c | c | c | } 
\hline & 2017 & 2016 & 2015 & 2014 \
\hline \text { Sales } & \$ 158,000 & \$ 615,000 & \$ 280,000 & \$ 500,000 \
\hline & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } \
\hline
\end{array}$$

Accepted Answer

The answer of Complete using trend analyses for sales. (Round...

Question 15

Sullivan Corp. earned $75,500 after taxes. The accountant calculated the return on equity as 12%. What was Sullivan's stockholders' equity? (round to the nearest cent)

Accepted Answer

$75,500 /.12 = $629,166.66.

Question 16

Alice Co. has a current ratio of 2.7. The acid test ratio is 2.2. The current liabilities of Alice Co. are $46,000. Could you calculate the dollar amount of merchandise inventory?

Accepted Answer

$46,000 × 2.7 + $46,000 × 2.2 = $124,200 - $101,200 = $23,000.

Question 17

Complete
 $$\begin{array} { | c | c | c | c | c | } 
\hline & 2017 & 2016 & \text { Decrease Amount } & \text { Decrease } \% \
\hline \text { Cash } & \$ 10,000 & \$ 18,000 & \text { A } & \text { B } \
\hline
\end{array}$$

Accepted Answer

The answer of Complete
 \[\begin{array} { | c | c...

Question 18

The asset turnover of Ready Corp. is 6.7; the total assets of Ready are $45,000. What were Ready's net sales?

Accepted Answer

$45,000 × 6.7 = $301,500.

Quiz 16: How to Read, Analyze, and Interpret Financial Reports

Complete the following trend analysis for year 4: $\begin{array} { | c | c | c | c | } \hline \text { Year 4 } & \text { Year 3 } & \text { Year 2 } & \text { Year 1 (base year) } \\\hline \$ 48,200 & \$ 50,000 & \$ 44,000 & \$ 17,560 \\\hline\end{array}$

Complete the following ratios: Current assets = $13,000 Inventory = $4,400 Current liabilities = $10,000 Net income = $7,700 Net sales = $24,400 A. Profit margin on sales (round to nearest tenth percent) B. Acid test (Round to nearest tenth percent.)