Professional Documents
Culture Documents
CH 13 Wiley Kimmel Quiz Homework
CH 13 Wiley Kimmel Quiz Homework
Increase or (Decrease)
$ 160000
Accounts receivable $560,000 $400,000 40 %
$ 130000
Inventory 780,000 650,000 20 %
$ 420000
Total assets 3,220,000 2,800,000 15 %
Royal Ware Company has stockholders' equity of $441,448 and net income of $69,069. It has a payout ratio of 26%
and a return on assets ratio of 20%. How much did Royal Ware pay in cash dividends, and what were its average
total assets? (Round all answers to 0 decimal places, e.g. 12,255.)
Cash dividends $ 17958
Talley Incorporated had the following transactions involving current assets and current liabilities during February
2010.
Collected accounts receivable of $14,770.
Feb. 3
Additional information: As of February 1, 2010, current assets were $120,735 and current liabilities were $32,630.
Compute the current ratio as of the beginning of the month and after each transaction. (Round each ratio to 2
decimal places, e.g. 12.51.)
Feb. 1 3.70 :1
Feb. 3 3.70 :1
Feb 7 3.70 :1
Feb. 11
3.70 :1
Feb. 14 5.13 :1
Feb. 18 4.87 :1
Current ratio:
Selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet
data are as of December 31 (in millions).
2006 2005
Compute the following ratios for 2006: (Round all answers to 1 decimal place, e.g. 12.5.)
Profit margin 2.9 %
Condensed balance sheet and income statement data for Breckenridge Corporation are presented here.
BRECKENRIDGE CORPORATION
Balance Sheets
December 31
2010 2009 2008
Cash $30,000 $20,000 $18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 85,000 64,000
Investments 55,000 70,000 45,000
Plant and equipment (net) 500,000 370,000 258,000
$725,000 $590,000 $433,000
Current liabilities $85,000 $80,000 $30,000
Long-term debt 185,000 85,000 20,000
Common stock, $10 par 320,000 300,000 300,000
Retained earnings 135,000 125,000 83,000
$725,000 $590,000 $433,000
BRECKENRIDGE CORPORATION
Income Statements
2. You must compute dividends paid. All dividends were paid in cash.
Compute the following ratios for 2010 and 2009. (Round all answers to 2 decimal places, e.g. 12.52.)
(1) Profit margin
2010 10.83 %
2009 15.11 %
2009 36.17 %
2009 $ 2.37
(5) Price-earnings
2010 3.33 times
2009 40.85 %
2009 27.97 %
2010
2009
Profit margin
$65,000
=10.83%
$71,000
=15.11%$600,000 $470,000 Gross profit
$175,000
=29.17%
$170,000
=36.17%$600,000 $470,000 Asset turnover
$600,000
=0.91 times
$470,000
=0.92 times($590,000 + $725,000) ÷ 2 ($433,000 + $590,000) ÷ 2 Earnings per share
$65,000
=$2.10
$71,000
=$2.37($30,000 + $32,000) ÷ 2 ($30,000 + $30,000) ÷ 2 Price-earnings ratio
$7.00
=3.33 times
$9.00
=3.80 times$2.10 $2.37 Payout ratio
$55,000*
=84.62%
$29,000**
=40.85%$65,000 $71,000 *($125,000 + $65,000 - $135,000) **($83,000 + $71,000 - $125,000) Debt to
total assets
$270,000
=37.24%
$165,000
=27.97%$725,000 $590,000
In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year,
no percentage change for that item can be computed.
False
True
The current ratio is a measure of all the ratios calculated for the current year.
True
False
extraordinary items.
dividends paid.
other revenue and gains.
total revenues.
total expenses.
liquidity ratio.
1 only.
2 only.
Both 1 and 2.
Which situation below might indicate a company has a low quality of earnings?
The financial statements are prepared in accordance with generally accepted accounting principles.
Balance Sheets
December 31
2010 2009
Cash $237,920 $87,332
Receivables (net) 67,930 64,030
Inventories 69,930 54,410
Plant assets (net) 218,790 181,610
$594,570 $387,382
Accounts payable $51,280 $69,000
Mortgage payable (15%) 119,670 101,620
Common stock, $10 par 140,000 120,000
Retained earnings 63,930 48,740
$377,520 $346,760
Additional information for 2010:
1. Net income was $33,570.
2. Sales on account were $392,530. Sales returns and allowances amounted to $27,600.
Compute the following ratios at December 31, 2010. (Round to 3 decimal places, e.g. 2.501.)