QUESTION 1 Quartz Corporation had retained earnings balances of $480,000 and $400,000 at the beginning and ending of the year, respectively. If revenues were $300,000 and expenses were $150,000, how much were dividends for the year assuming no other transactions affected retained earnings?

$70,000 $230,000 $80,000 $150,000

QUESTION 2 What is the base when preparing a vertical analysis on the balance sheet?

Total liabilities and equity

Total current assets

The first year presented

Total equity Sales revenue

QUESTION 3 Which of the following statements about footnotes is false?

Footnotes are required disclosures in the financial statements

Footnotes describe major accounting policies used

Footnotes are limited to no more than 10

Footnotes are used to explain unusual events or transactions

QUESTION 4 During its first year of operations, Yellow Bell Co. provided services to customers for the value of $76,000. At the end of the year, $16,000 of the $76,000 remained in Accounts Receivable. Yellow Bell Co. also incurred expenses of $47,000, of which, $7,000 is remained in Accounts Payable at year end. How much was Yellow Bells net income assuming they used the accrual method of accounting?

$20,000

$36,000

$29,000

$13,000

QUESTION 5 Financial statement ratio analysis may be undertaken to study liquidity, turnover, profitability, and other measures. What type of ratio is the return on equity ratio?

None of these

Liquidity

Profitability

Other measure

Turnover

QUESTION 6 Lantana Co. had the following selected financial information (this is not complete balance sheet information): Equipment, $410,000; Land, $380,000; Building, $820,000; Total liabilities, $520,000; and Total equity, $1,590,000. If Lantana performed a vertical analysis on the Equipment account, what percentage of total assets would Lantana show for the equipment?

25.5%

19.4%

Cannot be determined from the given information

38.9%

18.0%

QUESTION 7 Nutrition Inc. bought land by making a cash down payment and borrowing (mortgage) the remaining balance. How would the down payment be shown on a statement of cash flows?

decrease in cash from a financing activity

decrease in cash from an investing activity

increase in cash from an investing activity

increase in cash from an operating activity

increase in cash from a financing activity

decrease in cash from an operating activity 2 points

QUESTION 8 Palmetto Company had total sales of $160,000, of which, $20,000 were cash sales. Palmetto also had beginning and ending accounts receivable balances of $12,000 and $18,000, respectively. What is Palmettos accounts receivable turnover ratio?

9.33x

8.89x

10.67x

17.50x

QUESTION 9 Art Supplies, Inc. had the following asset account balances: Cash, $60,000; Short-term Investments, $120,000; Accounts Receivable, $70,000; and Inventory, $205,000. Current liabilities amounted to $325,000. What is Art Supplies current ratio?

0.77

1.40

Unable to determine

1.03

$130,000

QUESTION 10 Nutrition Inc. paid interest on a mortgage. How would this be shown on a statement of cash flows?

increase in cash from a financing activity

increase in cash from an operating activity

decrease in cash from an investing activity

decrease in cash from a financing activity

decrease in cash from an operating activity

increase in cash from an investing activity

QUESTION 11 Quartz Corporation had the following account balances: Sales, $875,000; Sales Returns and Allowances, $73,000; Cost of Goods Sold, $580,000; and Selling, General & Administrative Expenses, $120,000. How much was Quartzs gross profit?

$802,000

$102,000

$875,000

$222,000

$248,000

QUESTION 12 Torchglow, Co. had total current assets of $83,000 and total long-term assets of $615,000. Torchglow had no other assets. Torchglow has had total current liabilities of $43,000 and total long-term liabilities of $361,000. How much of Torchglows assets were financed with debt?

57.9%

42.1%

51.7%

58.7%