Taylor Co. and John Co. have the following ratios:

	Taylor Co.	John Co.
Debt to equity ratio	60%	80%
Return on assets	10%	12%
Return on equity	6%	9%
Current ratio	3.0	2.0

What do the ratios tell us about the companies?

	a.	Taylor has lower risk and lower profitability
	b.	Taylor has lower risk and higher profitability
	c.	Taylor has higher risk and lower profitability
	d.	Taylor has higher risk and higher profitability
	e.	There is no clear answers based on the ratios given

At the end of the year, a company has two types of inventory with the following information:

Type	Units	Cost per Unit	Market per Unit
A	20	$6	$4
B	30	$7	$8

The year-end adjustment, if any, would include a:

	a.	Credit to Inventory for $10
	b.	Credit to Cost of Goods Sold for $40
	c.	Debit to Cost of Goods Sold for $10
	d.	Credit to Inventory for $40
	e.	No adjustment is necessary

Which of the following is allowed under international accounting rules but not allowed under U.S. accounting rules?

	a.	Capitalization of product development cost
	b.	Reversal of previous inventory write down
	c.	Recording an increase in the fair value of property and equipment
	d.	Reporting cash flows from interest paid as a financing activity
	e.	All of the above are allowed under international accounting rules and not allowed under U.S. accounting rules

If you could please post your work/reasoning, that'd be great! thanks!