Question
8) [The following information applies to the questions displayed below.] At the end of Year 1, the following information is available for Grumpy, Happy, and
8) [The following information applies to the questions displayed below.] At the end of Year 1, the following information is available for Grumpy, Happy, and Doc Companies.
|
| Grumpy | Happy | Doc | ||||||
| Total Assets | $ | 2,000,000 |
| $ | 2,000,000 |
| $ | 3,000,000 |
|
| Total Liabilities |
| 1,400,000 |
|
| 800,000 |
|
| 1,800,000 |
|
| Stockholders' Equity |
| 600,000 |
|
| 1,200,000 |
|
| 1,200,000 |
|
| Net Income |
| 118,000 |
|
| 190,000 |
|
| 150,000 |
|
|
| |||||||||
8.1) Which company has the highest level of debt risk?
A) Grumpy B) They all have equal debt risk C) Happy D) Doc
8.2) Which company is the most profitable from the stockholders' perspective?
A) Grumpy B) Doc C) Cannot be determined D) Happy
8.3) Which company has the highest return-on-assets ratio?
A) They all have equal return-on-assets ratios. B) Grumpy. C) Doc. D) Happy.
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College Accounting A Practical Approach
Authors: Jeffrey Slater, Debra Good
14th Canadian Edition
0135222419, 978-0135222416
