Barry and Company sold a depreciable machine for $100,000 cash. The original cost of the machine was $400,000. The company recognized a gain of $20,000 on the sale. What was the amount of total accumulated depreciation on the machine at the time of the sale? a) $320,000 b) $80,000 c) $480,000 d) $300,000 e) None of the above. A DuPont analysis reveals that Blue and Red companies have similar asset turnover and profit margin ratios, but Blue has a higher return on equity. This result indicates that a) Blue is a better investment than Red. b) Blue is likely to be a riskier investment than Red. c) Red is a better investment than Blue. d) Red is likely to be a riskier investment than Blue. e) None of the above Which of the following transactions would always result in a positive change to th current ratio of the business? a) b) c) d) e) None of the above 8. Borrow cash on a long-term note. Borrow cash on a short-term note. Make a payment on an account payable. Either (a) or (b). 9. Which of the statements a through d is true? Dividends are only issued if the board of directors declares them a) b) Dividends are guaranteed to preferred shareholders. c) Dividends accumulate on common shares. d) Dividends are paid to all classes of shares on the same basis. e) None of the above is true. Which of the return on investment ratios would be of most interest to the owners of a company? a) Return on assets. b) Return on debt. c) Return on equity. d) Return on leverage. e) None of the above. 10. The Blue Wave Shipyard Company accepted a three-year contract to construct a luxury cruise ship. Blue Wave has never had a problem collecting from its customers. The company has built a number of similar cruise ships and is confident that its estimated construction costs are reasonably accurate. Blue Wave should recognize revenue: a) when the cruise ship is completed. b) using a method that defers recognition of any profit until the cash collected equals 11. the cost of the cruise ship. each year in proportion to the costs incurred that year relative to total estimated costs. each year in proportion to the cash received that year relative to total estimated costs. none of the above. c) d) c)