Econ Final

Sales

In a common-sized income statement, 100% is the

A. Net income

B. Gross Profit

C. Sales

D. Cost of Goods Sold

Total Assets

In common sized balance sheet, 100% is the

Both Increase

A company with 80,000 in current assets and 60,000 in current liabilities pays a 2000 current liability. As a result of this transaction, the current ratio and working capital will

a. both decrease

b. both increase

c. increase and remain the same, respectively

d. remain the same and decrease, respectively

None of the Above

What is the numerator in computing the return on common stockholder’s equity?

a. operating income minus interest expense

b. net income

c. current assets

d. none of the above

Issuance of long term debt

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

a. acquisition of treasury stock

b. issuance of long term debt

retirement of bond payable

d. declaration of stock dividends

224,000

Orange company had net income of 252,000 and depreciation expense of 26,000. During the year, accounts receivable and inventory increased by 15,000 and 40,000 respectively. Prepaid expenses and accounts payable decreased by 2000 and 4000 respectively. There was also a loss on teh sale of equipment of 3000. How much was the net cash flows from operating activities on teh statement of cash flows using the indirect method?

a. 284,000

b. 305,000

c. 224,000

d. none of the aboce

Investing Activity

ACE company purchases equipment for 50,000 cash. This transaction should be shown on the statement of cash flows as:

a. financing activity

b. operating activity

c. investing activity

d. both financing and investing activity