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Stout Corporation had net income

Price: $7.00

1. In vertical analysis, the base amount for each income statement item is
gross profit.
net income.
net sales.

2. The following information is available for Compton Company:

2012 2011
Accounts receivable $ 460,000 $ 500,000
Inventory 280,000 320,000
Net credit sales 2,470,000 1,400,000
Cost of goods sold 1,860,000 1,060,000
Net income 300,000 170,000

The receivables turnover ratio for 2012 is
3.9 times.
1.6 times.
5.1 times.
5.4 times.

3. Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2012. The weighted average number of shares outstanding in 2012 was 50,000 shares. Stout Corporation's common stock is selling for $60 per share on the New York Stock Exchange. Stout Corporation's payout ratio for 2012 is

$4 per share.

4. The debt to total assets ratio measures
the company's profitability
the percentage of the total assets provided by creditors.
whether interest can be paid on debt in the current year.
the proportion of interest paid relative to dividends paid.

5. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Cash and short-term investments $ 45,000
Accounts receivable (net) 25,000
Inventory 20,000
Property, plant and equipment
Total Assets
Liabilities and Stockholders’ Equity
Current liabilities $ 50,000
Long-term liabilities 90,000
Stockholders’ equity—common
Total Liabilities and Stockholders’ Equity
Income Statement
Sales $120,000
Cost of goods sold 66,000
Gross profit 54,000
Operating expenses
Net income
$ 24,000
Number of shares of common stock 6,000
Market price of common stock $20
Dividends per share .50

What is the return on assets for Sampson?

6. Under IFRS, other comprehensive income must be displayed (reported) in
the income statement.
the retained earnings statement.
the equity section of the statement of financial position.
a second income statement

7. Which of the following is not an acceptable way of displaying the components of other comprehensive income?

Combined statement of retained earnings.
Second income statement.
Combined statement of comprehensive income.
All of these are acceptable

8. Comparisons can be made on each of the following bases except
Each of these is a basis for comparison.
industry averages.
intercompany basis.
intracompany basis.

9. If the average collection period is 60 days, what is the receivables turnover?
6.0 times
6.1 times
12.2 times
None of these.

10. A stockholder is interested in the ability of a firm to
pay consistent dividends.
appreciate in share price.
survive over a long period.
all of these.

11. Wagon Department Store had net credit sales of $16,000,000 and cost of goods sold of $15,000,000 for the year. The average inventory for the year amounted to $2,000,000. Inventory turnover for the year is

15 times.
7.5 times.
5 times.
8 times.

12. What type of ratios best measure the short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash?

13. Times interest earned is also called the
coupon coverage ratio.
interest coverage ratio.
money multiplier.
premium ratio.

14. Wing Company reported income before taxes of $900,000 and an extraordinary loss of $250,000. Assume that the company’s tax rate is 30%. What amounts will be reported on the income statement for income before irregular items and extraordinary items, respectively?

$650,000 and $250,000
$630,000 and $175,000
$630,000 and $250,000
$650,000 and $175,000

15. Earnings per share is calculated
a. for common and preferred stock.
b. only for common stock.
c. only for treasury stock.
d. only for preferred stock.

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