1. B&B Corporations are on the accrual basis of accounting, revenue should be recognized on the Income Statement when:

A. Cash is received

B. Revenue is earned and collectability of any cash is reasonably assured

C. Revenue is earned regardless of the collectability of any uncollected cash

D. Revenue is earned even if the full sales price is uncertain

2. B&B Tech disclosed the following information in its recent annual report:

	Year 1	Year 2
Cost of goods sold	$16,000,000	$20,100,000
Revenue	20,000,000	25,100,000
Ending inventory	4,000,000	5,150,000

What is the B&B Techss Gross Profit for Years 1 & 2?

A. $4,000,000 & $8,000,000

B. $12,000,000 &$14,950,000

C. $4,000,000 & $5,000,000

D. None of the Above

3. B&B Co. opened a new business location on April 1. During April, Copy Co. sold

$50,000 of copies for cash along with $280,000 of copies on account to customers.

Payments collected from these customers amounted to $212,000 during April, with

the balance to be collected during May.

How much revenue should B&B. report on its April income statement?

A. $150,000

B. $430,000

C. $380,000

D. $530,000

Presented below are selected amounts from B&B, Inc.s financial statements:

Amounts in thousands
Balance sheet
Accounts receivable	$ 22,800
Inventory	41,000
Total assets	569,000
Accounts payable	135,500
Shareholders equity	288,000
Income Statement
Net sales	621,000
Cost of goods sold	430,000
Interest expense	27,000
Net income	124,000

How many days, on average, does it take B&B's to pay an outstanding account payable?

A. 139.days

B. 115 days

C. 123 days

D. 119 days

E. None of the above

4. Presented below are selected ratios derived from B&B's financial statements:

Return on sales	1.7%
Total asset turnover	4.25
Financial leverage	2.75
Treasury stock return Dividend retention rate	3.25 1.95

Using the ROE model framework, how much is B&Bs ROE?

A. 12.95%

B. 19.87%

C. 29.18%

D. 39.59%