Which of the following measures can be used to evaluate a company's ability to meet future debt obligations after paying income taxes and interest and making capital expenditures?
a. Earnings per share
b. Net income
c. Cash flow adequacy ratio
d. Net increase or decrease in cash and cash equivalents
c
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Harrington Industries, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Harrington should make a journal entry on December 31 that includes:
A. a credit to Finished-Goods Inventory for $432,000. B. a debit to Cost of Goods Sold for $432,000. C. a debit to Finished-Goods Inventory for $86,000. D. a credit to Work-in-Process Inventory for $432,000. E. a credit to Work-in-Process Inventory for $86,000.
Morice Industries Inc. has developed a new injection mold, model IA-05, that is designed to offer superior performance to a comparable injection mold sold by Morice's main competitor. The competing injection mold sells for $54,000 and needs to be replaced after 1,000 hours of use. It also requires $7,000 of preventive maintenance during its useful life. Model IA-05's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 2,000 hours of use and it requires $8,000 of preventive maintenance during its useful life.From a value-based pricing standpoint, what is the differentiation value offered by model IA-05 relative to the competitor's offering for each 2,000 hours of usage?
A. $108,000 B. $60,000 C. $68,000 D. $6,000
One of the employees of Davenport Corporation recently was involved in an accident with one of the corporation's delivery vans. The corporation is either going to repair the damaged van or sell it as is and buy a comparable used van. Information related to this decision is provided below:Initial cost of the damaged van$30,000Accumulated depreciation to date on van$18,000Salvage value of van immediately before crash$9,000Salvage value of van immediately after crash$1,000Cost to repair damaged van$5,000Cost of a comparable used van$10,000Based on the information above, Davenport would be financially better off:
A. $1,000 by buying the comparable van. B. $2,000 by repairing the damaged van. C. $4,000 by repairing the damaged van. D. $2,000 by buying the comparable van.
When personal property is used to back up a note, it is called a collateral note
a. True b. False Indicate whether the statement is true or false