Prepare an income statement using the information given below. Make sure to identify gross profit, operating income, and net income. Inventories $50,000 Cost of Goods Sold $250,000 Administrative Expenses $50,000 Accumulated Depreciation $150,000 Sales $600,000 Depreciation Expense $25,000 Selling Expenses $150,000 Common Stock Dividends $8,000 Interest Expense $8,000 Corporate Tax Rate 40% ANSWER […]
The telecommunications system that provides a national information linkup among brokers and dealers operating in the over-the-counter market is called A) NASQ. B) NCIS. C) NSQA. D) NASDAQ. ANSWER D
How do gross profits, operating income, and net income relate to the areas of business activity reported in the income statement? What will be an ideal response? ANSWER The income statement begins with sales or revenue, from which we subtract the cost of goods sold (the cost of producing or acquiring the product […]
At an annual interest rate of 9%, an initial sum of money will double approximately every 8 years. Indicate whether the statement is true or false ANSWER TRUE
An example of a primary market transaction involving a money-market security is A) a new issue of a security with a very long maturity. B) the transfer of a previously-issued security with a very long maturity. C) a new issue of a security with a very short maturity. D) the transfer of a previously-issued security […]
Intangible assets such as copyrights and goodwill are not included on the balance sheet because they are impossible to value objectively. Indicate whether the statement is true or false ANSWER FALSE
When solving time value of money problems using Excel, the type = 0 variable means payments are made at the end of each period, and the type = 1 variable means payments are made at the beginning of each period. Indicate whether the statement is true or false ANSWER TRUE
A corporate financial manager trying to maximize shareholder value A) is not concerned with ethics but rather with writing iron-clad contracts. B) is concerned with ethics because unethical behavior destroys trust, and businesses cannot function without a certain degree of trust. C) must behave ethically in order to stay out of jail. D) can safely […]
Common-sized balance sheets show each account as a percentage of total sales to help analysts in comparing companies of difference sizes. Indicate whether the statement is true or false ANSWER FALSE
Inputs using an Excel spreadsheet are almost identical to those on a financial calculator, except the interest rate is entered either as a decimal (.05 ) or a whole number followed by a % sign (5%) rather than simply a whole number (5 ) as you would enter using a financial calculator. ANSWER […]
