n. vv v . SET A A. Multiple Choice 1.) cmad Company's balance sheet at the end of the current year: Accounts payable P145.000 Accounts receivable 110.000 Accrued liabilities 4.000 Cash 30.000 Income tax payable 10.000 Inventory 140.000 Marketable securities 250.000 Notes payable, short-term 35.000 Prepaid expenses 15.000 The amount of working capital tor the company is: a. P351.000 b. P211.000 c. P361 .000 d P336.000 2.) omad Company's balance sheet at the end of the current year: Accounts payable P145.000 Accounts receivable 110.000 Accrued liabilities 4.000 Cash 30.000 Income tax payable 10.000 Inventory 140.000 Marketable securities 250.000 Notes payable, short-tenn 35.000 Prepaid expenses 15.000 The company's acid-test ratio as 01 the balance sheet date is: a. 1.30:1 b. 2.02:1 c. 2.40:1 d 1.76:1 3 1 Pine Hardware Store had net credit sales of P6.500.000 and cost of goods sold of P5.000.000 tor the year. The Accounts Receivable balances at the beginning and end of the year were P600000 and P700000. respectively. Th receivables turnover was a. 7.7 times. b. 9.3 times. c. 10.0 times. d 10.0 times. 4.) Milward Corporation's books disclosed the following information tor the year ended December 31, 2007: Net credit sales P1,500.000 Net cash sales 240.000 Accounts receivable at beginning of year 200.000 Accounts receivable at the end of year 400.000 Milward's accounts receivable turnover is a. 3.75 times b. 5.00 times 0. 4.35 times d. 5.80 times 10.) House of Fashion Company had the following nancial statistics for 2006: Long-tenn debt (average rate 01 interest is 8%) P400000 Interest expense 35,000 Net income 48,000 Income tax 46,000 Operating income 107,000 What is the times interest earned tor 2006'? 11.4 times 3.1 times 3.3 times 3.7 times steps 11.) Brave Company reported the following on its inoome statement: 0 0 Income before taxes I 4 / 1 2 :: Income tax expense #1 Net income M An analysis of the income statement revealed that interest expense was P100000. Brava Company's times interest earned (TIE) was a. 5 times b. 3.5 times c. 4 times d. 3 times 12.) The times interest earned ratio at Mikoto Company is 4.5 times. The interest expense for the year was P20.000, and the company's tax rate is 40%. The oompany's net income is: a. P22,000 b. P54,000 c. P42.000 d. P66,000 13.) The Board of Directors is dissatised with last year's HOE of 15%. If the prot margin and asset tumover remain unchanged at 8% and 1.25 respectively, by how much must the total debt ratio increase to achieve 20% ROE? a. Total debt ratio must increase by .5 b. Total debt ratio must increase by 5 c. Total debt ratio must increase by 5% d. Total debt ratio must increase by 50% 14.) Assume you are given the following relationships for the Orange Company: Sales/total assets 1.5x Fleturn on assets (BOA) 3% Fleturn on equity (ROE) 5% The Orange Company's debt ratio is a. 40% b. 35% c. 60% d. 65% 5.) elected information from the accounting records of Petals Company is as follows: Net sales for 2007 P900000 Cost of goods sold for 2007 600.000 Inventory at December 31, 2006 180.000 Inventory at December 31, 2007 156.000 Petals' inventory turnover tor 2007 is a. 5.77 times b. 3.67 times c. 3.85 times 0. 3.57 times 6.) he Moss Company presents the lollowing data tor 2007. Net Sales. 2007 P3.007.124 Net Sales. 2006 P 930.247 Cost of Goods Sold. 2007 P2000326 Cost of Goods Sold, 2007 P1.000.120 Inventory. beginning of 2007 P 341.169 Inventory. and of 2007 P 376.526 The merchandise inventory turnover for 2007 is: a. 5.6 b. 7.5 c. 15.6 d. 7.7 7.) ased on the following data for the current year, what is the inventory turnover? Net sales on account during year P 500.000 Cost of merchandise sold during year 330.000 Accounts receivable. beginning of year 45.000 Accounts receivable. end of year 35.000 Inventory. beginning of year 90.000 Inventory. and of year 110.000 a. 3.3 b. 3.7 c. 8.3 d. 3.0 B.) elected information from the accounting records of Eternity Manufacturing Company lollows: Net sales P3.600.000 Cost of goods sold 2.400.000 Inventories at January 1 672.000 Inventories at December 31 576000 What is the number of days' sales in average inventories for the year? a. 102.2 b. 87.6 c. 94.9 d. 68.1 9.) Jordan Manufacturing reports the following capital structure: Current liabilities P100000 Long-term debt 400.000 Deferred income taxes 10.000 Preferred stock 60.000 Common stock 100.000 Premium on common stock 160.000 Fletained earnings 170.000 What is the debt ratio? a. 0.45 b. 0.93 c. 0.49 d. 0.96 1\\