The advantages of financial leverage accrue primarily to

a. management.
b. stockholders.
c. the government.
d. creditors.


B

Business

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Orville Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs. The carrying values and estimated fair values of the assets of Orville Company are as follows: Carrying ValueFair ValueCash $20,000  $20,000 Accounts Receivable  45,000   30,000 Inventory  60,000   35,000 Land  75,000   70,000 Building (net)  180,000   100,000 Equipment (net)  170,000   80,000 Total $550,000  $335,000 Debts of Orville are as follows: Accounts Payable$60,000 Wages Payable (all have priority) 10,000 Taxes Payable 10,000 Notes Payable (secured by receivables and inventory) 120,000 Interest on Notes Payable 6,000 Bonds Payable (secured by land and building) 150,000 Interest on Bonds

Payable 7,000 Total$363,000  Based on the preceding information, what estimated amount will be available for general unsecured creditors upon liquidation? A. $28,000 B. $121,000 C. $113,000 D. $93,000

Business

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using FIFO. DateActivitiesUnits Acquired at CostUnits Sold at RetailMay 1Beginning Inventory290 units @ $14 5Purchase290 units @ $16 10Sales 210 units @ $2415Purchase170 units @ $17 24Sales 160 units @ $25

A. $6250 B. $6080 C. $5510 D. $5900 E. $5340

Business

Partner A has a capital balance of $20,000 and devotes full time to the partnership. Partner B has a capital balance of $30,000 and devotes half time to the partnership. In what ratio is net income to be divided?

A) 3:5 B) 1:1 C) 2:3 D) 1:2

Business

Some firms have experimented with a ______, in which they attempt to increase job satisfaction by shortening the workweek into fewer days.

Fill in the blank(s) with the appropriate word(s).

Business