Question 19 (3 points) A company's Income Tax Payable account decreased from $14 million to $12 million during the year. If its income tax expense was $80 million, what would be shown as cash paid for income taxes under the direct method? a) A cash outflow of $12 million O b) A cash outflow of $75 million O c ) A cash outflow of $82 million. d) A cash outflow of $80 million. Question 20 (3 points) The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the previous year), net income is $150,000, and net cash flows from operating activities are $175,000. What is Sound Designs' asset turnover? a) 0.5 times. Ob) 1.9 times. 0 C) 2.0 times. 0 d) 1.7 times. Question 21 (3 points) The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the previous year), net income is $150,000, and net cash flows from operating activities are $175,000. What is Sound Designs cash return on assets a) 21.9% Ob) 22.6%. OC) 18.8%. d) 19.4%. Question 22 (3 points) A company purchased a machine at a cost of $60,000. The estimated useful life is 10 years, and the estimated residual value is $10,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year? a) $8,000. Ob) $12,000. Oc) $10,000 d) $9,600. Question 23 (3 points) Easy Rider purchases a copyright for $70,000. The copyright has a remaining legal life of 20 years, but only an expected useful life of five years with no residual value. Assume the company uses the straight-line method to record amortization What is the carrying value of the copyright at the end of the second year? a) None of these. Ob) 542,000 OC) $56,000. d) $70,000 Question 24 (3 points) When a company reports a gain on the sale of a depreciable asset, which of the following is always true? a) The company sold the asset for more than it was worth. b) The company sold the asset before its useful life was over. O C) The company sold the asset for more than its fair value. a) The company sold the asset for more than its book value Question 25 (3 points) The balance sheet of Legal Seafoods reports total assets of $450,000 and $550,000 at the besinning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Legal Seafoods return on assets? Profit Margin? a) 10%. 12.5% Ob) None of these. Oc) 20% 12.5% d) 10%. 18% Oe) 18%. 10%
