Reference no: EM132450297
Questions -
Q1. Which of the following most likely would be classified as a current liability?
a) Three-year notes payable
b) Bonds payable in 5 years
c) Mortgage payable as a single payment in 10 years
d) Dividends payable
Q2.The 2017 financial statements of Crane Company contain the following selected data (in millions).
Current assets $87
Total assets 171
Current liabilities 54
Total liabilities 62
Cash 5
Interest expense 5
Income taxes 8
Net income 13
The debt to assets ratio (rounded) is:
a) 2.76%.
b) 8.1 times.
c) 36.3%.
d) 62.1%.
Q3. In a recent year Ayayai Corp. had net income of $140000, interest expense of $27500, and income tax expense of $37500. What was Ayayai Corp.'s times interest earned (rounded) for the year?
a) 6.45
b) 7.45
c) 5.09
d) 6.09
Q4. If bonds are issued at a discount, it means that the
a) financial strength of the issuer is suspect.
b) market interest rate is lower than the contractual interest rate.
c) market interest rate is higher than the contractual interest rate.
d) bondholder will receive effectively less interest than the contractual rate of interest.
Q5. Bonds are issued at a premium, the stated interest rate is
a) lower than the market rate of interest.
b) too low to attract investors.
c) adjusted to a higher rate of interest.
d) higher than the market rate of interest.
Q6. The chief accounting officer in a company is known as the
a) vice-president.
b) president.
c) controller.
d) treasurer.
Q7. Which one of the following would not be considered an advantage of the corporate form of organization?
a) Continuous life.
b) Limited liability of stockholders.
c) Government regulation.
d) Separate legal existence.
Q8. Which of the following would not be true of a privately held corporation?
a) It is usually smaller than a publicly held company.
b) It is sometimes called a closely held corporation.
c) Its shares are regularly traded on the New York Stock Exchange.
d) It does not offer its shares for sale to the general public.
Q9. The following information pertains to Cheyenne Company. Assume that all balance sheet amounts represent average balance figures.
Total assets $335000
Stockholders' equity-common 215000
Total stockholders' equity 265000
Sales revenue 107000
Net income 20700
Number of shares of common stock 7000
Common dividends 4800
Preferred dividends 6500
What is Cheyenne's payout ratio?
a) 16%.
b) 8%.
c) 36%.
d) 23.19%.
Q10. Pina Colada Corp. had net income of $120200 and paid dividends of $36500 to common stockholders and $24000 to preferred stockholders in 2017. Pina Colada Corp. common stockholders' equity at the beginning and end of 2017s was $480000 and $560000, respectively. Pina Colada Corp. return on common stockholders' equity is
a) 18%.
b) 14%.
c) 23%.
d) 19%.