1. Homer Simpson, Inc. purchased equipment on January 1, 2016 by paying $900,000 cash.Homer

Simpson management estimated the equipment would have a salvage value of $60,000 at the end of its 12-year useful life.How much depreciation expense will Homer Simpson report on its 2016 income statement for this equipment?

a.$0

b.$70,000

c.$75,000

d.$60,000

e.Doh! None of the above.

2. Homer Simpson, Inc. purchased equipment on January 1, 2016 by paying $900,000 cash.Homer Simpson management estimated the equipment would have a residual value (i.e., salvage value) of $0 at the end of its 10-year estimated useful life. At the end of the equipment's third year of use, the accumulated depreciation account for this equipment will have a balance of:

a.$0

b.$180,000

c.$90,000

d.$270,000

e.Doh! None of the above.

3. The following information is available from Zeno Corporation's balance sheet accounts.

Cash

$20,000

Accounts Receivable

280,000

Prepaid rent

30,000

Property, plant, and equipment (net of $180,000 accumulated depreciation)

570,000

What is the original cost of Zeno's property, plant, and equipment?

a.$750,000

b.$570,000

c.$390,000

d.$600,000

e.None of the above.

4. The following financial statement information is available for Sanson, Inc.

Consolidated Statements of Operations (USD

$)

In Millions 2014 2013 2012

Net sales 1091.5982.6911.9

Cost of sales 876.9788.2735.7

Gross margin 214.6194.4176.2

Operating expenses 200.0183.4172.2

Goodwill impairment 0.00.03.3

Gain (loss) on disposal of capital assets 0.00.0(4.2)

Operating income (loss) 14.511.04.9

Interest expense, net 4.44.65.1

Income (loss) from cont ops before income taxes 10.26.5(0.2)

Income tax expense or benefit 0.00.20.0

Income (loss) from continuing operations 10.26.3(0.2)

Income (loss) from disc operations, net of taxes (6.3) (0.7) (0.7)

Net income (loss) 3.95.6(0.9)

Consolidated Balance Sheets (USD $) Dec. 31, Dec. 31, Dec. 31,

In Millions, unless otherwise specified 2014 2013 2012

Assets

Cash and equivalents 0.91.14.0

Trade accounts receivable, net 85.676.773.0

Inventories 118.0116.796.3

Other current assets 13.712.612.8

Total current assets 218.1207.0186.0

Property, Plant and Equipment: 115.0109.7103.8

Less accumulated depreciation (85.4) (80.7) (76.5)

Goodwill 11.011.011.0

Other non-current assets 17.917.216.3

Total Assets 276.5264.3240.6

Liabilities

Current maturities of long-term debt 2.32.11.1

Trade accounts payable 69.070.554.6

Other accrued liabilities 44.542.944.6

Total current liabilities 115.7115.5100.3

Long-term debt, less current maturities 109.2106.4103.6

Other non-current liabilities 6.72.33.3

Total Liabilities 231.5224.2207.2

Shareholders' Equity:

Common stock and Addl pd-in capital 71.170.069.0

Accumulated deficit (26.1) (29.9) (35.5)

Total shareholders' equity 45.040.133.4

Total Liabilities and Shareholders' Equity 276.5264.3240.6

What is the amount of cash Sanson, Inc. collected from customers during 2013?

a.$978.9

b.$986.3

c.$982.6

d.$3.7

e.None of the above.

5. Refer to the financial statements for Sanson, Inc. in question 4.What is the dollar amount of inventory purchases by Sanson during 2013?

a.$788.2

b.$19.6

c.$767.7

d.$808.6

e.None of the above.

6. Refer to the financial statements for Sanson, Inc. in question 4.What is the dollar amount of cash paid to inventory suppliers during 2013?

a.$824.6

b.$772.3

c.792.7

d.$15.9

e.None of the above.

7. Refer to the financial statements for Sanson, Inc. in question 4.What rate of return did Sanson earn on the total investment in the company during 2013?

a.2.07%

b.15.24%

c.2.22%

d.3.89%

e.None of the above.

8. The following financial information is available for International Technologies, Inc.:

Consolidated Statements of Ops (USD $)

In Thousands

Dec. 27, 2014

Dec. 28, 2013

Dec. 29, 2012

NET SALES

$1,097,788

$929,810

$719,204

Cost of sales

$839,946

$698,771

$542,700

GROSS PROFIT

$257,842

$231,039

$176,504

Selling and administrative expenses

$251,591

$205,797

$171,420

Other operating expense, net

$2,441

$1,334

$184

Facility consolidation expenses

$14,888

$0

$0

Impairment of assets

$3,059

$0

$0

OPERATING INCOME (LOSS)

($14,137)

$23,909

$4,901

Interest expense

$11,615

$10,141

$8,494

Other (income) expense, net

($416)

$70

($748)

Gain on purchase of businesses

($29,997)

$0

$0

Refinancing expenses

$0

$254

$0

INC (LOSS) FROM CONT OPS BEFORE TAXES

$4,660

$13,443

($2,846)

Income tax provision (benefit)

$2,843

($1,558)

($1,083)

INCOME (LOSS) FROM CONTINUING OPS

$1,817

$15,001

($1,763)

Loss from discontinued operations, net of tax

($1,642)

($718)

($740)

Loss on disposal of disc ops, net of tax

($3,961)

$0

$0

NET INCOME (LOSS)

($3,785)

$14,283

($2,503)

Consolidated Balance Sheets In Thousands

Dec. 27, 2014 Dec. 28, 2013

CURRENT ASSETS

Cash and cash equivalents

$1,064$689

Receivables, net of allow. of $1,215 and $381, respectively

$136,415$118,970

Inventories

$281,359$251,691

Prepaid expenses

$16,119$15,201

Deferred income taxes

$34,349$17,879

TOTAL CURRENT ASSETS

$469,306$404,430

PROPERTY, PLANT AND EQUIPMENT, NET

$276,720$201,110

OTHER ASSETS

$66,350$66,398

TOTAL ASSETS

$812,376$671,938

CURRENT LIABILITIES

$0$0

Accounts payable

$59,692$58,533

Accrued expenses

$79,129$70,745

Current portion of long-term debt

$24,511$16,818

TOTAL CURRENT LIABILITIES

$163,331$146,097

LONG-TERM DEBT

$319,167$274,749

DEFERRED INCOME TAXES

$25,315$10,994

OTHER LONG-TERM LIABILITIES

$53,525$49,016

TOTAL LIABILITIES

$561,338$480,857

What is the days' sales outstanding for International Technologies for the year ended Dec. 27^th, 2014? (Choose the answer below that is closest to your answer; answers below have been rounded to a whole number.) a. 42

b.35

c.9

d.350

e.None of the above.

9. Assume Johnson Controls Corp. has a receivables turnover of 13.This means:

a.Johnson collects receivables, on average, every 13 days.

b.Johnson's receivables turn over about 28 times per year.

c.Johnson collects its receivables, and replaces them with new receivables, on average, about 13 times per year.

d.Johnson collects, on average, 13 dollars per day.

e.None of the above.

10. The 2016 financial statements of BNSF Railway Company report total revenues of $19,829 million, accounts receivable of $1,272 million for 2016 and $1,198 million for 2015. The company's accounts receivable turnover for the year is:

a.17.0 times

b.8.9 times *c. 16.1 times

d.17.9 times

e.None of the above

1. Homer Simpson, Inc. purchased equipment on January 1, 2016 by paying $900,000 cash.Homer

Simpson management estimated the equipment would have a salvage value of $60,000 at the end of its 12-year useful life.How much depreciation expense will Homer Simpson report on its 2016 income statement for this equipment?

a.$0

b.$70,000

c.$75,000

d.$60,000

e.Doh! None of the above.

2. Homer Simpson, Inc. purchased equipment on January 1, 2016 by paying $900,000 cash.Homer Simpson management estimated the equipment would have a residual value (i.e., salvage value) of $0 at the end of its 10-year estimated useful life. At the end of the equipment's third year of use, the accumulated depreciation account for this equipment will have a balance of:

a.$0

b.$180,000

c.$90,000

d.$270,000

e.Doh! None of the above.

3. The following information is available from Zeno Corporation's balance sheet accounts.

Cash

$20,000

Accounts Receivable

280,000

Prepaid rent

30,000

Property, plant, and equipment (net of $180,000 accumulated depreciation)

570,000

What is the original cost of Zeno's property, plant, and equipment?

a.$750,000

b.$570,000

c.$390,000

d.$600,000

e.None of the above.

4. The following financial statement information is available for Sanson, Inc.

Consolidated Statements of Operations (USD

$)

In Millions 2014 2013 2012

Net sales 1091.5982.6911.9

Cost of sales 876.9788.2735.7

Gross margin 214.6194.4176.2

Operating expenses 200.0183.4172.2

Goodwill impairment 0.00.03.3

Gain (loss) on disposal of capital assets 0.00.0(4.2)

Operating income (loss) 14.511.04.9

Interest expense, net 4.44.65.1

Income (loss) from cont ops before income taxes 10.26.5(0.2)

Income tax expense or benefit 0.00.20.0

Income (loss) from continuing operations 10.26.3(0.2)

Income (loss) from disc operations, net of taxes (6.3) (0.7) (0.7)

Net income (loss) 3.95.6(0.9)

Consolidated Balance Sheets (USD $) Dec. 31, Dec. 31, Dec. 31,

In Millions, unless otherwise specified 2014 2013 2012

Assets

Cash and equivalents 0.91.14.0

Trade accounts receivable, net 85.676.773.0

Inventories 118.0116.796.3

Other current assets 13.712.612.8

Total current assets 218.1207.0186.0

Property, Plant and Equipment: 115.0109.7103.8

Less accumulated depreciation (85.4) (80.7) (76.5)

Goodwill 11.011.011.0

Other non-current assets 17.917.216.3

Total Assets 276.5264.3240.6

Liabilities

Current maturities of long-term debt 2.32.11.1

Trade accounts payable 69.070.554.6

Other accrued liabilities 44.542.944.6

Total current liabilities 115.7115.5100.3

Long-term debt, less current maturities 109.2106.4103.6

Other non-current liabilities 6.72.33.3

Total Liabilities 231.5224.2207.2

Shareholders' Equity:

Common stock and Addl pd-in capital 71.170.069.0

Accumulated deficit (26.1) (29.9) (35.5)

Total shareholders' equity 45.040.133.4

Total Liabilities and Shareholders' Equity 276.5264.3240.6

What is the amount of cash Sanson, Inc. collected from customers during 2013?

a.$978.9

b.$986.3

c.$982.6

d.$3.7

e.None of the above.

5. Refer to the financial statements for Sanson, Inc. in question 4.What is the dollar amount of inventory purchases by Sanson during 2013?

a.$788.2

b.$19.6

c.$767.7

d.$808.6

e.None of the above.

6. Refer to the financial statements for Sanson, Inc. in question 4.What is the dollar amount of cash paid to inventory suppliers during 2013?

a.$824.6

b.$772.3

c.792.7

d.$15.9

e.None of the above.

7. Refer to the financial statements for Sanson, Inc. in question 4.What rate of return did Sanson earn on the total investment in the company during 2013?

a.2.07%

b.15.24%

c.2.22%

d.3.89%

e.None of the above.

8. The following financial information is available for International Technologies, Inc.:

Consolidated Statements of Ops (USD $)

In Thousands

Dec. 27, 2014

Dec. 28, 2013

Dec. 29, 2012

NET SALES

$1,097,788

$929,810

$719,204

Cost of sales

$839,946

$698,771

$542,700

GROSS PROFIT

$257,842

$231,039

$176,504

Selling and administrative expenses

$251,591

$205,797

$171,420

Other operating expense, net

$2,441

$1,334

$184

Facility consolidation expenses

$14,888

$0

$0

Impairment of assets

$3,059

$0

$0

OPERATING INCOME (LOSS)

($14,137)

$23,909

$4,901

Interest expense

$11,615

$10,141

$8,494

Other (income) expense, net

($416)

$70

($748)

Gain on purchase of businesses

($29,997)

$0

$0

Refinancing expenses

$0

$254

$0

INC (LOSS) FROM CONT OPS BEFORE TAXES

$4,660

$13,443

($2,846)

Income tax provision (benefit)

$2,843

($1,558)

($1,083)

INCOME (LOSS) FROM CONTINUING OPS

$1,817

$15,001

($1,763)

Loss from discontinued operations, net of tax

($1,642)

($718)

($740)

Loss on disposal of disc ops, net of tax

($3,961)

$0

$0

NET INCOME (LOSS)

($3,785)

$14,283

($2,503)

Consolidated Balance Sheets In Thousands

Dec. 27, 2014 Dec. 28, 2013

CURRENT ASSETS

Cash and cash equivalents

$1,064$689

Receivables, net of allow. of $1,215 and $381, respectively

$136,415$118,970

Inventories

$281,359$251,691

Prepaid expenses

$16,119$15,201

Deferred income taxes

$34,349$17,879

TOTAL CURRENT ASSETS

$469,306$404,430

PROPERTY, PLANT AND EQUIPMENT, NET

$276,720$201,110

OTHER ASSETS

$66,350$66,398

TOTAL ASSETS

$812,376$671,938

CURRENT LIABILITIES

$0$0

Accounts payable

$59,692$58,533

Accrued expenses

$79,129$70,745

Current portion of long-term debt

$24,511$16,818

TOTAL CURRENT LIABILITIES

$163,331$146,097

LONG-TERM DEBT

$319,167$274,749

DEFERRED INCOME TAXES

$25,315$10,994

OTHER LONG-TERM LIABILITIES

$53,525$49,016

TOTAL LIABILITIES

$561,338$480,857

What is the days' sales outstanding for International Technologies for the year ended Dec. 27^th, 2014? (Choose the answer below that is closest to your answer; answers below have been rounded to a whole number.) a. 42

b.35

c.9

d.350

e.None of the above.

9. Assume Johnson Controls Corp. has a receivables turnover of 13.This means:

a.Johnson collects receivables, on average, every 13 days.

b.Johnson's receivables turn over about 28 times per year.

c.Johnson collects its receivables, and replaces them with new receivables, on average, about 13 times per year.

d.Johnson collects, on average, 13 dollars per day.

e.None of the above.

10. The 2016 financial statements of BNSF Railway Company report total revenues of $19,829 million, accounts receivable of $1,272 million for 2016 and $1,198 million for 2015. The company's accounts receivable turnover for the year is:

a.17.0 times

b.8.9 times *c. 16.1 times

d.17.9 times

e.None of the above