accounting practice test 451032

1. Missoula Inc. reported the following selected financial statement data:

   	Previous	Current
   	Year	Year
   Cash	30,000	32,000
   Accounts receivable (net)	48,000	52,000
   Inventory	68,000	72,000
   Plant (net)	210,000	218,000
   Total assets	405,000	395,000
   Accounts payable	45,000	50,000
   Long term liabilities	100,000	95,000
   Shareholder’s equity	260,000	250,000
   Net sales	340,000	400,000
   Cost of goods sold	220,000	280,000
   Net income	20,000	25,000

   What is Missoula’s current ratio for the current year?

   Answer

   		.60
   		1.01
   		1.68
   		3.12

3 points

Question 16

1. Compute Missoula%u2019s receivables turnover ratio for the current year. Answer
   

   		.208
   		7.69
   		3.0
   		8.0

3 points

Question 17

1. Compute Missoula%u2019s inventory turnover ratio for the current year.

   Answer

   		4.0
   		5.38
   		8.75
   		3.89

3 points

Question 18

1. Compute Missoula%u2019s profit margin on sales for the current year. Answer
   

   		4.80%
   		6.25%
   		3.33%
   		1.60%

3 points

Question 19

1. Compute Missoula%u2019s return on assets for the current year. Answer
   

   		6.17%
   		6.33%
   		1.01%
   		6.25%

3 points

Question 20

1. Compute Missoula%u2019s return on shareholders’ equity for the current year. Answer
   

   		9.8%
   		10%
   		47%
   		48%

3 points

Question 21

1. Compute the present value of the following single amounts to be received at the end of the specified period at the given interest rate:

   	Invested	Interest	Number of
   Item	Amount	Rate	Periods
   a.	$40,000	7%	20
   b.	$20,000	6%	25
   c.	$50,000	11%	10

   Answer

   		a. = $10,337; b. = $4,660; c. = $17,609
   		a. = $154,787; b. = $85,837; c. = $141,971
   		a. = $423,760; b. = $255,667; c. = $294,461
   		a. = $25,842; b. = $23,300; c. = $35,218