21 The annual report contains four basic financial statements the income statement, balance sheet, statement of cash flows, and statement of stockholders' equity a True b False 22 Which of the following statements is CORRECT a The statement of cash needs tells us how much cash the firm will require during some future period, generally a month or a year b The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders' equity c The balance sheet gives us a picture of the firm's financial position at a point in time d The income statement gives us a picture of the firm's financial position at a point in time e The statement of cash flows tells us how much cash the firm has in the form of currency and demand deposits 23 Which of the following statements is CORRECT a A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last b The balance sheet for a given year is designed to give us an idea of what happened to the firm during that year c The balance sheet for a given year tells us how much money the company earned during that year d The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles (GAAP) e For most companies, the market value of the stock equals the book value of the stock as reported on the balance sheet 24 Which of the following statements is CORRECT a The statement of cash needs tells us how much cash the firm will require during some future period, generally a month or a year b The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders' equity c The balance sheet gives us a picture of the firm's financial position at a point in time d The income statement gives us a picture of the firm's financial position at a point in time e The statement of cash flows tells us how much cash the firm has in the form of currency and demand deposits 25 Which of the following statements is CORRECT a A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last b The balance sheet for a given year is designed to give us an idea of what happened to the firm during that year c The balance sheet for a given year tells us how much money the company earned during that year d The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles (GAAP) e For most companies, the market value of the stock equals the book value of the stock as reported on the balance sheet 26 Over the years, Janjigian Corporation's stockholders have provided $15,250 of capital, part when they purchased new issues of stock and part when they allowed management to retain some of the firm's earnings The firm now has 1,000 shares of common stock outstanding, and it sells at a price of $42 00 per share How much value has Janjigian's management added to stockholder wealth over the years, i e , what is Janjigian's MVA a $21,788 b $22,935 c $24,142 d $25,413 e $26,750 27 Meric Mining Inc recently reported $15,000 of sales, $7,500 of operating costs other than depreciation, and $1,200 of depreciation The company had no amortization charges, it had outstanding $6,500 of bonds that carry a 6 25 interest rate, and its federal plus state income tax rate was 35 How much was the firm's net income after taxes Meric uses the same depreciation expense for tax and stockholder reporting purposes a $3,284 55 b $3,457 42 c $3,639 39 d $3,830 94 e $4,022 48 28 Ullrich Printing Inc paid out $21,750 of common dividends during the year It ended the year with $187,500 of retained earnings versus the prior year's retained earnings of $132,250 How much net income did the firm earn during the year a $77,000 b $80,850 c $84,893 d $89,137 e $93,594 29 NNR Inc 's balance sheet showed total current assets of $1,875,000 plus $4,225,000 of net fixed assets All of these assets were required in operations The firm's current liabilities consisted of $475,000 of accounts payable, $375,000 of 6 short term notes payable to the bank, and $150,000 of accrued wages and taxes Its remaining capital consisted of long term debt and common equity What was NNR's total investor provided operating capital a $4,694,128 b $4,941,188 c $5,201,250 d $5,475,000 e $5,748,750 30 Last year Tiemann Technologies reported $10,500 of sales, $6,250 of operating costs other than depreciation, and $1,300 of depreciation The company had no amortization charges, it had $5,000 of bonds that carry a 6 5 interest rate, and its federal plus state income tax rate was 35 This year's data are expected to remain unchanged except for one item, depreciation, which is expected to increase by $750 By how much will net after tax income change as a result of the change in depreciation The company uses the same depreciation calculations for tax and stockholder reporting purposes a 463 13 b 487 50 c 511 88 d 537 47 e 564 34

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21 . The annual report contains four basic financial statements: the income statement, balance sheet, statement of cash flows, and statement of stockholders' equity. a.

21. The annual report contains four basic financial statements: the income statement, balance sheet, statement of cash flows, and statement of stockholders' equity.

	a.	True
	b.	False

22. Which of the following statements is CORRECT?

	a.	The statement of cash needs tells us how much cash the firm will require during some future period, generally a month or a year.
	b.	The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders' equity.
	c.	The balance sheet gives us a picture of the firm's financial position at a point in time.
	d.	The income statement gives us a picture of the firm's financial position at a point in time.
	e.	The statement of cash flows tells us how much cash the firm has in the form of currency and demand deposits.

23. Which of the following statements is CORRECT?

	a.	A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last.
	b.	The balance sheet for a given year is designed to give us an idea of what happened to the firm during that year.
	c.	The balance sheet for a given year tells us how much money the company earned during that year.
	d.	The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles (GAAP).
	e.	For most companies, the market value of the stock equals the book value of the stock as reported on the balance sheet.

24. Which of the following statements is CORRECT?

	a.	The statement of cash needs tells us how much cash the firm will require during some future period, generally a month or a year.
	b.	The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders' equity.
	c.	The balance sheet gives us a picture of the firm's financial position at a point in time.
	d.	The income statement gives us a picture of the firm's financial position at a point in time.
	e.	The statement of cash flows tells us how much cash the firm has in the form of currency and demand deposits.

25. Which of the following statements is CORRECT?

	a.	A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last.
	b.	The balance sheet for a given year is designed to give us an idea of what happened to the firm during that year.
	c.	The balance sheet for a given year tells us how much money the company earned during that year.
	d.	The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles (GAAP).
	e.	For most companies, the market value of the stock equals the book value of the stock as reported on the balance sheet.

26. Over the years, Janjigian Corporation's stockholders have provided $15,250 of capital, part when they purchased new issues of stock and part when they allowed management to retain some of the firm's earnings. The firm now has 1,000 shares of common stock outstanding, and it sells at a price of $42.00 per share. How much value has Janjigian's management added to stockholder wealth over the years, i.e., what is Janjigian's MVA?

	a.	$21,788
	b.	$22,935
	c.	$24,142
	d.	$25,413
	e.	$26,750

27. Meric Mining Inc. recently reported $15,000 of sales, $7,500 of operating costs other than depreciation, and $1,200 of depreciation. The company had no amortization charges, it had outstanding $6,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was the firm's net income after taxes? Meric uses the same depreciation expense for tax and stockholder reporting purposes.

	a.	$3,284.55
	b.	$3,457.42
	c.	$3,639.39
	d.	$3,830.94
	e.	$4,022.48

28. Ullrich Printing Inc. paid out $21,750 of common dividends during the year. It ended the year with $187,500 of retained earnings versus the prior year's retained earnings of $132,250. How much net income did the firm earn during the year?

	a.	$77,000
	b.	$80,850
	c.	$84,893
	d.	$89,137
	e.	$93,594

29. NNR Inc.'s balance sheet showed total current assets of $1,875,000 plus $4,225,000 of net fixed assets. All of these assets were required in operations. The firm's current liabilities consisted of $475,000 of accounts payable, $375,000 of 6% short-term notes payable to the bank, and $150,000 of accrued wages and taxes. Its remaining capital consisted of long-term debt and common equity. What was NNR's total investor-provided operating capital?

	a.	$4,694,128
	b.	$4,941,188
	c.	$5,201,250
	d.	$5,475,000
	e.	$5,748,750

30. Last year Tiemann Technologies reported $10,500 of sales, $6,250 of operating costs other than depreciation, and $1,300 of depreciation. The company had no amortization charges, it had $5,000 of bonds that carry a 6.5% interest rate, and its federal-plus-state income tax rate was 35%. This year's data are expected to remain unchanged except for one item, depreciation, which is expected to increase by $750. By how much will net after-tax income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting purposes.