Freiman Corporation's most recent balance sheet and income statement appear below:Balance SheetDecember 31, Year 2 and Year 1(in thousands of dollars) Year 2Year 1Assets Current assets: Cash$160 $120 Accounts receivable, net 220 240 Inventory 120 130 Prepaid expenses 40 40 Total current assets 540 530 Plant and equipment, net 700 700 Total assets$ 1,240 $ 1,230 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$130 $150 Accrued liabilities 90 90 Notes payable, short term 60 70 Total current liabilities 280 310 Bonds payable 280 290 Total liabilities 560 600 Stockholders' equity: Common stock, $2 par value 100 100
Additional paid-in capital 200 200 Retained earnings 380 330 Total stockholders' equity 680 630 Total liabilities & stockholders' equity$ 1,240 $ 1,230 Income StatementFor the Year Ended December 31, Year 2(in thousands of dollars)Sales (all on account)$1,310 Cost of goods sold 780 Gross margin 530 Selling and administrative expenses 359 Net operating income 171 Interest expense 35 Net income before taxes 136 Income taxes (30%) 41 Net income$ 95 The acid-test (quick) ratio at the end of Year 2 is closest to:
A. 0.96
B. 1.93
C. 1.36
D. 1.50
Answer: C
You might also like to view...
________ is a form of paid television programming in which a particular product is demonstrated, explained, and offered for sale to viewers who call a toll-free number shown on the screen
A) Teleshopping B) Infomercials C) Interactive television D) Magalog E) Groupon
Neville Company issued $100,000 of 6%, 10 year bonds when the market rate of interest was 5%. The proceeds from this bond issue were $107,732 . Using the effective interest method of amortization, which of the following statements is true? Assume interest is paid annually
a. Interest payments to bondholders each period will be $6,464. b. Interest payments to bondholders each period will be $5,000. c. Amortization of the premium for the first interest period will be $1,226. d. Amortization of the premium for the first interest period will be $613.
The Hometown Dog Groomer offered a free flea dip to its regular customers. The owner had extra employees to deal with the crowd but provided only one dip tank, which slowed down the process. What could the owner do to deliver the desired service level?
A. Offer incentives to customers. B. Provide instrumental support. C. Adopt an antagonistic attitude toward customers. D. Assure the customers of better service in future. E. Plan for a better resource-to-yield output.
If a Universal computer monitor breaks while it is still under warranty, someone needs to get it to the repair center. In this case, Universal will need
A. reverse channels. B. exclusive distribution. C. intensive distribution. D. selective distribution. E. multichannels.