A+ Answers of the following Questions

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1. Frisch Fish Corp expects net income next year to e $600,000. Inventory and accounts receivable will have to be increase be $300,000 to accommodate this sales level. Frisch will pay dividends of $400,000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities?

2. Samueison will produce the 20,000 units using level production. If each bed costs $1,000 to manufacture, what is the dollar value of ending inventory at the end of Winter quarter?

3. Allen Lumber Company had earning after taxes of $580,000 in the year 2006 with 400,000 shares outstanding On January 1,2007, the firm issued 35,000 new shares. Because of the proceeds from these new shares and other operating improvement, 2007 earning was 25 percent higher than in 2006. Earnings per share for the year 2007 was

4. Consider the following information for Ball Crop.

Selling and administrative expense      $50,000

Depreciation expense                                80,000

Sales                                                            400,000

Interest expense                                          30,000

Cost of goods sold                                     150,000

Taxes                                                              18,550

Question 1

A business organized as a separate legal entity owned by stockholders is a partnership

True
False

Question 2

Cash and supplies are both classified as current assets.

True
False

Question 3

Economic events that require recording in the financial statements are called accounting transactions.

True
False

Question 1

The time period assumption states that the economic life of a business entity can be divided into artificial time periods.

True
False

 

Question 2

Retailers and wholesalers are both considered merchandising enterprises

True
False

Question 3

An income statement shows

revenues, liabilities, and stockholders' equity.

expenses, dividends, and stockholders' equity.

revenues, expenses, and net income.

assets, liabilities, and stockholders' equity.

Question 1

Ashton Company began the year with retained earnings of $210,000. During the year, the company recorded revenues of $300,000, expenses of $228,000, and paid dividends of $24,000. What was Ashton's retained earnings at the end of the year?

$306,000

$258,000

$486,000

$282,000

Question 2

If the retained earnings account increases from the beginning of the year to the end of the year, then

net income is less than dividends.

a net loss is less than dividends

additional investments are less than net losses.

net income is greater than dividends.

Question 3

A liquidity ratio measures the

income or operating success of a company over a period of time

ability of a company to survive over a long period of time.

short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash.

percentage of total financing provided by creditors.

Question 1

Working capital is

calculated by dividing current assets by current liabilities.

used to evaluate a company's liquidity and short-term debt paying ability.

used to evaluate a company's solvency and long-term debt paying ability.

calculated by subtracting current assets from current liabilities

Question 2

The normal balance of any account is the

left side.

right side.

side which increases that account

side which decreases that account.

Question 3

A revenue account

is increased by debits.

decreased by credits.

has a normal balance of a debit.

 

is increased by credits. 

    • 10 years ago
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