Question: 1. At December 31, 2012, Able Corp. reported a retained earnings balance on its balance sheet of $10,000,000. At December 31, 2012, Baker Corp. reported

1. At December 31, 2012, Able Corp. reported a retained earnings balance on its balance sheet of $10,000,000. At December 31, 2012, Baker Corp. reported a retained earnings balance on its balance sheet of $15,000,000. Given this information, which of the following statements is necessarily true? a) Baker had higher net income for 2012 than Able. b) Baker has more cash at December 31, 2012, than Able. c) Baker has earned more net income since its inception than Able. d) No conclusions can be reached on which company has more cash or more cumulative net income without more information. 2. The quick ratio of a firm would equal its current ratio whenever: a) The firm has negative liquidity. b) The firm has zero debt. c) The firm has zero inventory. d) The ratios are calculated in such a way that they can never be equal

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