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Please answer all questions. COMPANY, INC. BALANCE SHEET as of December 31, 2004 ASSETS CASH $210,000 30% 70% ACCOUNTS RECEIVABLE TOTAL ASSETS 100% LIABILITIES ACCOUNTS

Please answer all questions.

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COMPANY, INC. BALANCE SHEET as of December 31, 2004 ASSETS CASH $210,000 30% 70% ACCOUNTS RECEIVABLE TOTAL ASSETS 100% LIABILITIES ACCOUNTS PAYABLE $49,000 7% 63% NOTES PAYABLE TOTAL LIABILITIES 70% EQUITY TOTAL EQUITY $210,000 30% TOTAL LIABILITIES + EQUITY 100% Based on the vertical analysis of the balance sheet above, the balance of total assets is a.) $70,000 b.) $441,000 O c.) $700,000 O d.) $490,000 NET INCOME NET SALES CURRENT ASSETS CURRENT LIABILITIES TOTAL ASSETS $67,500 $32,250 $327,500 $129,750 $460,250 Given the information shown here, what is the rate of return on sales? a.) 2.52 b.) 0.06 c.) 2.09 d.) 0.07 Paperclips has just acquired Office Space, so Ned wanted to inform the employees that they were no longer Office Space employees but Paperclips employees. As new Paperclips employees, Ned also wanted to make sure that everyone was familiar with the internal controls he employs. Each employee was given an employee handbook, which included Paperclips' Mission Statement, in order to educate the new employees about the merged company's policies and procedures. Which of the following internal control systems is being used in this scenario? a.) Risk assessment b.) Monitoring processes c.) Control activities d.) Control environment Sarah recorded profits for the last three months in the amount of $9,700. She also included the $1,200 she took out of the business for personal use. $9,700 would be listed as and found in the operating activities. a.) ending cash balance b.) cash flow c.) net income d.) beginning cash balance Which of the following scenarios is a financing activity? a.) An observation that, on average, customers return $570 worth of merchandise each month b.) $5,670 recorded as profit for June documented on the income statement c.) $2,000 received from the bank to aid in the purchase of the building d.) Purchase of the building next to the Paisley Place for $25,000 to be used for expansion analysis allows the company to evaluate changes within the company and compare to other companies and industry standards. a.) Profitability b.) Ratio c.) Liquidity d.) Vertical Elizabeth secured a three-month loan at an interest rate of 4.5% and borrowed $10,000 to purchase an oven. When the loan matures, Elizabeth will pay in interest to the bank. a.) $135.00 b.) $61.73.00 c.) $54.00 d.) $112.50 Which of the following transactions is NOT a contingent liability? a.) A customer has filed a lawsuit for negligence against Mark's company. b.) Mark has hired an internal auditor. c.) A customer has approached Mark regarding an issue with the product warranty. d.) The state alleges that Mark underpaid his taxes last year

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