31]

A machine with a cost of $140,000 and accumulated depreciation of $95,000 is sold for $55,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

A Zero. This is an operating activity.

B $10,000.

C Zero. This is a financing activity.

D $45,000.

E $55,000.

32]

Use the following selected information from Farris, LLC to determine the Year 2 and Year 1 trend percents for net sales using Year 1 as the base.

	Year 2	Year 1
Net sales	$ 279,700	$ 232,100
Cost of goods sold	151,200	130,290
Operating expenses	54,540	52,540
Net earnings	28,720	20,520

A 54.1% for Year 2 and 56.1% for Year 1.

B 36.1% for Year 2 and 40.3% for Year 1.

C 66.2% for Year 2 and 64.6% for Year 1.

D 116.0% for Year 2 and 100.0% for Year 1.

E 120.5% for Year 2 and 100.0% for Year 1.

33]

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:

Retained earnings balance at the beginning of the year	$ 164,000
Cash dividends declared for the year	54,000
Proceeds from the sale of equipment	89,000
Gain on the sale of equipment	8,600
Cash dividends payable at the beginning of the year	26,000
Cash dividends payable at the end of the year	49,600
Net income for the year	100,000

What is the ending balance for retained earnings?

A $268,400.

B $210,000.

C $264,000.

D $190,000.

E $292,000

34]

Sebring Company reports depreciation expense of $48,000 for Year 2. Also, equipment costing $165,000 was sold for its book value in Year 2. The following selected information is available for Sebring Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

At December 31	Year 2	Year 1
Equipment	$ 650,000	$ 815,000
Accumulated Depreciation-Equipment	460,000	540,000

A $40,000.

B $85,000.

C $37,000.

D $80,000.

E $48,000.

35]

Six months ago, a company purchased an investment in stock for $75,000. The investment is classified as available-for-sale securities. The current fair value of the stock is $79,500. The company should record a:

A Credit to Market Adjustment - Available-for-Sale for $4,500.

B Debit to Investment Revenue for $4,500.

C Debit to Unrealized Loss-Equity for $4,500.

D Credit to Unrealized Gain-Equity for $4,500.

E Credit to Investment Revenue for $4,500.

36]

Beewell's net income for the year ended December 31, Year 2 was $196,000. Information from Beewell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2.

At December 31	Year 2	Year 1
Common Stock, $5 par value	$ 511,000	$ 459,900
Paid-in capital in excess of par	959,000	862,900
Retained earnings	699,000	591,900

A $96,100.

B $51,100.

C $107,100.

D $88,900.

E $147,200.

37]

A company issued 7%, 15-year bonds with a par value of $630,000. The current market rate is 7%. The journal entry to record each semiannual interest payment is:

A Debit Bond Interest Expense $22,050; credit Cash $22,050.

B Debit Bond Interest Expense $44,100; credit Cash $44,100.

CDebit Bond Interest Expense $42,000; credit Cash $42,000.

D Debit Bond Interest Expense $580,000; credit Cash $580,000.

E No entry is needed, since no interest is paid until the bond is due.

38]

A company has net income of $525,000, net sales of $11,600,000, and average total assets of $6,142,500. Its return on total assets equals:

A 4.5%.

B 8.5%.

C 1,170.0%.

D 53.0%.

E 18.0%.

39]

A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $5,300. The company retired these bonds by buying them on the open market at 91. What is the gain or loss on this retirement?

A $3,700 gain.

B $3,700 loss.

C $9,000 gain.

D $9,000 loss.

E $0 gain or loss.

40]

Use the following selected information from Farris, LLC to determine the Year 2 and Year 1 common size percents for operating expenses using net sales as the base.

	Year 2	Year 1
Net sales	$ 456,600	$ 372,200
Cost of goods sold	201,400	133,880
Operating expenses	73,390	70,730
Net earnings	37,060	26,310

A 28.0% for Year 2 and 17.0% for Year 1.

B 44.1% for Year 2 and 36.0% for Year 1.

C 19.7% for Year 2 and 19.6% for Year 1.

D 16.1% for Year 2 and 19.0% for Year 1.

E 122.7% for Year 2 and 100.0% for Year 1.

41]

A company has bonds outstanding with a par value of $100,000. The unamortized premium on these bonds is $2,300. If the company retired these bonds at a call price of 98, the gain or loss on this retirement is:

A $4,300 gain.

B $2,000 loss.

C $2,300 gain.

D $2,300 loss.

E $2,000 gain.

42]

Refer to the following selected financial information from Fennie's, LLC. Compute the company's acid-test ratio for Year 2.

	Year 2	Year 1
Cash	$ 39,200	$ 33,950
Short-term investments	107,000	68,500
Accounts receivable, net	94,000	88,000
Merchandise inventory	129,500	133,500
Prepaid expenses	13,800	11,400
Plant assets	396,500	346,500
Accounts payable	104,900	116,300
Net sales	719,500	684,500
Cost of goods sold	398,500	383,500

A 3.66.

B 2.29.

C 3.52.

D 2.42.

E 2.64

43]

Micron owns 35% of Martok. Martok pays a total of $53,000 in cash dividends for the period. Micron's entry to record the dividend transaction would include a:

A Credit to Long-Term Investments for $18,550.

B Credit to Investment Revenue for $53,000.

C Debit to Long-Term Investments for $18,550.

D Debit to Cash for $53,000.

E Credit to Cash for $18,550.

44]

A company purchased $75,000 of 6% bonds on May 1 at par value. The bonds pay interest on February 1 and August 1. The amount of interest accrued on December 31 (the company's year-end) would be:

A $1,875.

B $375.

C $750.

D $4,500.

E $3,750.

45]

A company had net income of $45,000, net sales of $350,000, and average total assets of $250,000. Its profit margin and total asset turnover were respectively:

A 1.40%; 0.18.

B 12.86%; 1.40.

C 1.40%; 12.86.

D 1.99%; 1.40.

E 12.86%; 0.18.