Chapter2
Key
[Link]?
[Link]
[Link]+Liabilities
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#1
Section:2.1
Topic:Balancesheet
[Link]?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#2
Section:2.1
Topic:Balancesheet
[Link],deferredtaxesareclassifiedas:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#3
Section:2.1
Topic:Balancesheet
[Link]:
[Link].
[Link]'equity.
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#4
Section:2.1
Topic:Networkingcapital
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Remember
Difficulty:1Basic
RossChapter02#5
Section:2.1
Topic:Liquidity
[Link]'saccountingperformanceoveraperiodoftimeisthe:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#6
Section:2.2
Topic:Incomestatement
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#7
Section:2.2
Topic:Noncashitems
[Link],netincomeisequalto:
[Link].
[Link].
[Link]+Additiontoretainedearnings.
[Link](1Marginaltaxrate).
[Link]+Additiontoretainedearnings.
AACSB:AnalyticalThinking
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Difficulty:2Intermediate
RossChapter02#8
Section:2.2
Topic:Incomestatement
[Link]?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#9
Section:2.3
Topic:Taxes
[Link]:
A.32percent.
B.33percent.
C.28percent.
D.40percent.
E.35percent.
AACSB:AnalyticalThinking
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RossChapter02#10
Section:2.3
Topic:Taxes
[Link]'songoing,normalbusinessactivitiesisreferredtoasthe:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#11
Section:2.5
Topic:Operatingcashflow
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:2Intermediate
RossChapter02#12
Section:2.5
Topic:Capitalspending
[Link]:
[Link].
[Link].
[Link]+DepreciationTaxes.
[Link]+Depreciation.
[Link]+Taxes.
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#13
Section:2.5
Topic:Operatingcashflow
[Link],whichoneoftheseiscalculatedbyaddingbacknoncash
expensestonetincomeandadjustingforchangesincurrentassetsandliabilities?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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RossChapter02#14
Section:2.6
Topic:Statementofcashflows
[Link]'sinterestpaymentslessanynetnewborrowing?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#15
Section:2.5
Topic:Cashflowtocreditors
[Link]'sdividendpaymentslessanynetnewequityraisedisreferredtoasthefirms:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#16
Section:2.5
Topic:Cashflowtostockholders
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:2Intermediate
RossChapter02#17
Section:2.2
Topic:Persharevaluations
[Link],anincreaseindividendspersharewillreduce
the:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:2Intermediate
RossChapter02#18
Section:2.2
Topic:Persharevaluations
[Link]?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#19
Section:2.2
Topic:Noncashitems
[Link]?
A.amountduetoasupplierin18months
[Link]
[Link]
D.loanpaymentduein13months
E.amountduefromacustomerin30days
AACSB:AnalyticalThinking
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RossChapter02#20
Section:2.1
Topic:Balancesheet
[Link]:
[Link].
[Link].
[Link]'equitymustalsoincrease.
[Link]'equity.
[Link].
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RossChapter02#21
Section:2.1
Topic:Balancesheet
[Link]?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
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Difficulty:2Intermediate
RossChapter02#22
Section:2.1
Topic:Liquidity
[Link]?
[Link],itwasaliquidasset.
[Link],theassetishighlyliquid.
[Link].
[Link],thelowertheprobabilitythefirmwillencounterfinancialdifficulties.
[Link].
AACSB:AnalyticalThinking
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RossChapter02#23
Section:2.1
Topic:Liquidity
[Link]:
[Link]'scapitalstructure.
[Link].
[Link]'stotalassetsminusitstotalliabilities.
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#24
Section:2.1
Topic:Liquidity
[Link]'equity?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#25
Section:2.1
Topic:Balancesheet
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#26
Section:2.1
Topic:Marketandbookvalues
[Link],youaremostapttoreceivewhichvalueforthatasset?
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#27
Section:2.1
Topic:Marketandbookvalues
[Link]:
[Link].
[Link]
interestexpenses.
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
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Difficulty:2Intermediate
RossChapter02#28
Section:2.2
Topic:Incomestatement
[Link],theearningspersharewill:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#29
Section:2.2
Topic:Persharevaluations
[Link]?
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#30
Section:2.2
Topic:Incomestatement
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#31
Section:2.2
Topic:Persharevaluations
[Link],costsare:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#32
Section:2.2
Topic:GenerallyAcceptedAccountingPrinciples(GAAP)
[Link]:
[Link]$1forevery$1ofdepreciationexpense.
[Link].
[Link].
[Link].
[Link],netincome,andoperatingcashflows.
AACSB:AnalyticalThinking
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RossChapter02#33
Section:2.2
Topic:Incomestatement
[Link],themostrelevanttaxrateisthe____rate.
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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RossChapter02#34
Section:2.3
Topic:Taxes
[Link]
firm?
[Link]
[Link]
[Link]
[Link]
[Link]
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RossChapter02#35
Section:2.5
Topic:Operatingcashflow
[Link],thefirmacquiresmoreshortterm
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link],negative,orequaltozero.
AACSB:AnalyticalThinking
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RossChapter02#36
Section:2.4
Topic:Networkingcapital
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#37
Section:2.5
Topic:Cashflowtocreditors
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#38
Section:2.5
Topic:Cashflowtostockholders
[Link],nondividend
payingfirm?Assumenosharesofstockarerepurchasedorsold.
[Link]
[Link]
[Link]
[Link]
[Link]
AACSB:AnalyticalThinking
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RossChapter02#39
Section:2.1
Topic:Marketandbookvalues
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#40
Section:2.1
Topic:Liquidity
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
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Difficulty:2Intermediate
RossChapter02#41
Section:2.1
Topic:Balancesheet
[Link]:
[Link].
[Link].
[Link]'svaluetoaninvestor.
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#42
Section:2.1
Topic:GenerallyAcceptedAccountingPrinciples(GAAP)
[Link](GAAP),afirm'sassetsarereportedat:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#43
Section:2.1
Topic:GenerallyAcceptedAccountingPrinciples(GAAP)
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
Blooms:Understand
Difficulty:2Intermediate
RossChapter02#44
Section:2.2
Topic:Incomestatement
[Link](GAAP),revenueisrecognizedasincomewhen:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#45
Section:2.2
Topic:Incomestatement
[Link]:
[Link].
[Link],negative,orequaltozero.
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:2Intermediate
RossChapter02#46
Section:2.5
Topic:Cashflowfromassets
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
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Difficulty:2Intermediate
RossChapter02#47
Section:2.5
Topic:Cashflowfromassets
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
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Difficulty:2Intermediate
RossChapter02#48
Section:2.5
Topic:Cashflowtostockholders
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#49
Section:2.5
Topic:Freecashflow
[Link]:
[Link].
[Link].
[Link].
[Link].
[Link].
AACSB:AnalyticalThinking
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Difficulty:1Basic
RossChapter02#50
Section:2.5
Topic:Cashflowfromassets
[Link]:
[Link],investingactivities,andfinancingactivities.
[Link],investingactivities,anddivestingactivities.
[Link],externalactivities,andfinancingactivities.
[Link].
[Link].
AACSB:AnalyticalThinking
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RossChapter02#51
Section:2.6
Topic:Statementofcashflows
[Link]:
[Link].
[Link].
[Link](GAAP).
[Link],orspinthecashflows.
[Link].
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RossChapter02#52
Section:2.7
Topic:Cashflows
[Link]$820ininventory,$3,200infixedassets,$1,210inaccountsreceivable,$890inaccounts
payable,and$[Link]?
A.$4,700
B.$5,590
C.$3,600
D.$2,390
E.$1,500
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RossChapter02#53
Section:2.4
Topic:Networkingcapital
[Link]$1,450,fixedassetsare$790,longtermdebtis$750,andshorttermdebtis$[Link]
theamountofcurrentassets?
A.$660
B.$360
C.$300
D.$40
E.$790
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RossChapter02#54
Section:2.1
Topic:Balancesheet
[Link]'sCompanyhasequipmentwithabookvalueof$500thatcouldbesoldtodayata50percentdiscount.
Itsinventoryisvaluedat$[Link]$100incashand
customersowethefirm$250,[Link]?
A.$100
B.$550
C.$1,050
D.$1,300
E.$600
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RossChapter02#55
Section:2.1
Topic:Marketandbookvalues
[Link]'sEnterprisesspent$4,[Link]
valuedat$2,700ontoday'sbalancesheetbutcouldactuallybesoldfor$3,[Link]$400and
longtermdebtis$2,[Link]'sonlyfixedasset,whatisthebookvalueof
shareholders'equity?
A.$1,300
B.$800
C.$1,600
D.$1,900
E.$2,200
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RossChapter02#56
Section:2.1
Topic:Marketandbookvalues
[Link]'sBoutiquehassalesof$820,000andcostsof$540,[Link]$36,000anddepreciation
is$59,[Link]?
A.$158,600
B.$120,250
C.$105,000
D.$179,250
E.$99,600
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RossChapter02#57
Section:2.2
Topic:Incomestatement
58.
Given the tax rates as shown, what is the average tax rate for a firm with taxable income of
$218,700?
TaxableIncome
$050,000
50,00175,000
75,001100,000
100,001335,000
TaxRate(%)
15
25
34
39
A.
32.09%
B.
33.88%
C.
31.34%
D.
34.64%
E.
39.00%
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RossChapter02#58
Section:2.3
Topic:Taxes
59.
[Link]$83,[Link]
incomeby$24,600?
TaxableIncome
$050,000
50,00175,000
75,001100,000
100,001335,000
TaxRate(%)
15
25
34
39
A.
$8,364
B.
$9,014
C.
$9,594
D.
$8,754
E.
$8,174
AACSB:AnalyticalThinking
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RossChapter02#59
Section:2.3
Topic:Taxes
[Link]$22,980,costsof$14,715,anddepreciationof$6,045.Thetaxrateis34
[Link]?
A.$1,465.20
B.$2,410.80
C.$8,340.00
D.$7,510.20
E.$9,019.80
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RossChapter02#60
Section:2.5
Topic:Operatingcashflow
[Link]$234,100andendingnetfixedassetsof$243,600.
Assetsvaluedat$42,[Link]$62,[Link]
capitalspending?
A.$42,500
B.$9,500
C.$72,000
D.$53,000
E.$29,500
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RossChapter02#61
Section:2.5
Topic:Capitalspending
[Link],afirmhascurrentassetsof$16,200andcurrentliabilitiesof$13,[Link]
endoftheyear,thecurrentassetsare$14,800andthecurrentliabilitiesare$14,[Link]
workingcapital?
A.$470
B.$50
C.$470
D.$2,330
E.$2,330
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RossChapter02#62
Section:2.4
Topic:Networkingcapital
[Link],longtermdebtofafirmis$2,400andtotaldebtis$3,[Link]
year,longtermdebtis$2,800andtotaldebtis$4,[Link]$[Link]
flowtocreditors?
A.$440
B.$40
C.$1,260
D.$1,180
E.$360
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RossChapter02#63
Section:2.5
Topic:Cashflowtocreditors
[Link]'sBoatshasbeginninglongtermdebtof$840andendinglongtermdebtof$[Link]
endingtotaldebtbalancesare$1,220and$1,360,[Link]$[Link]
thecashflowtocreditors?
A.$80
B.$110
C.$110
D.$20
E.$80
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RossChapter02#64
Section:2.5
Topic:Cashflowtocreditors
[Link]'sCookieshadnetincomeof$8,110.Thefirmpaidout30percentofthenetincometoits
[Link],thecompanyrepurchased$[Link]
cashflowtostockholders?
A.$2,933
B.$5,177
C.$1,933
D.$2,433
E.$2,967
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RossChapter02#65
Section:2.5
Topic:Cashflowtostockholders
[Link]'sJetSkishasoperatingcashflowof$11,[Link]$2,345andinterestpaidis$395.A
nettotalof$[Link]$6,180onfixedassetsanddecreasednetworking
capitalby$[Link]?
A.$5,858
B.$8,203
C.$9,228
D.$5,018
E.$7,363
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RossChapter02#66
Section:2.5
Topic:Cashflowfromassets
67.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
2015
$503
418
1,239
2,290
360
$4810
2014
$227
522
1,187
2,264
360
$4,560
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
Whatisthechangeinthenetworkingcapitalfrom2014to2015?
A.
$2,343million
B.
$1,035million
C.
$151million
D.
$305million
E.
$674million
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RossChapter02#67
Section:2.4
Topic:Networkingcapital
68.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
2015
$503
418
1,239
2,290
360
$4810
2014
$227
522
1,187
2,264
360
$4,560
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
Whatistheamountofthenoncashitemsfor2015?
A.$481million
B.$0
C.$227million
D.$311million
E.$473million
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RossChapter02#68
Section:2.2
Topic:Noncashitems
69.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
2015
$503
418
1,239
2,290
360
$4810
Whatistheamountofthenetcapitalspendingfor2015?
A.$29million
B.$26million
C.$337million
D.$1,66million
E.$285million
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RossChapter02#69
Section:2.5
Topic:Capitalspending
2014
$227
522
1,187
2,264
360
$4,560
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
70.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
2015
$503
418
1,239
2,290
360
$4810
2014
$227
522
1,187
2,264
360
$4,560
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
Whatistheoperatingcashflowfor2015?
A.$485million
B.$1,030million
C.$867million
D.$783million
E.$451million
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RossChapter02#70
Section:2.5
Topic:Operatingcashflow
71.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
Whatisthecashflowofthefirmfor2015?
A.$295million
B.$485million
C.$1,340million
D.$590million
E.$310million
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RossChapter02#71
Section:2.5
Topic:Cashflowfromassets
2015
$503
418
1,239
2,290
360
$4810
2014
$227
522
1,187
2,264
360
$4,560
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
72.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
2015
$503
418
1,239
2,290
360
$4810
2014
$227
522
1,187
2,264
360
$4,560
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
Whatisthecashflowtostockholdersfor2015?
A.$152million
B.$25million
C.$0
D.$25million
E.$75million
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RossChapter02#72
Section:2.5
Topic:Cashflowtostockholders
73.
WoodlandsInc.
2015IncomeStatement
($inmillions)
Totaloperatingrevenues
Costofgoodssold
Selling,general,andadministrativeexpenses
Depreciation
$3,806
2,315
546
311
Earningsbeforeinterestandtaxes(EBIT)
Interestexpense
$634
170
Pretaxincome
Taxes
$464
162
Netincome
$302
Dividends
75
WoodlandsInc.
BalanceSheet
($inmillions)
Assets
Cashandequivalents
Accountsreceivable
Inventory
Netproperty&equipment
Intangibleassets
Totalassets
2015
$503
418
1,239
2,290
360
$4810
2014
$227
522
1,187
2,264
360
$4,560
Whatisthecashflowtocreditorsfor2015?
A.$120million
B.$50million
C.$120million
D.$220million
E.$170million
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RossChapter02#73
Section:2.5
Topic:Cashflowtocreditors
74.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
LiabilitiesandStockholdersEquity
Accountspayable
Longtermdebt
Commonstock
Capitalsurplus
Retainedearnings
Totalliabilities&stockholdersequity
2015
$686
1,300
1,500
745
579
2014
$613
1,350
1,500
745
352
$4,810
$4,560
Whatisthenetworkingcapitalfor2015?
A.
$11,45
B.
$12,240
C.
$4,955
D.
$9,915
E.
$10,005
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RossChapter02#74
Section:2.4
Topic:Networkingcapital
75.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
Whatistheadditiontoretainedearningsfor2015?
A.
$4,030
B.
$4,630
C.
$3,700
D.
$4,900
E.
$5,230
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RossChapter02#75
Section:2.2
Topic:Incomestatement
76.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
Whatisnetcapitalspendingfor2015?
A.
$850
B.
$1,759
C.
$311
D.
$2,057
E.
$3,459
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RossChapter02#76
Section:2.5
Topic:Capitalspending
77.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
Whatistheoperatingcashflowfor2015?
A.$6,460
B.$9,069
C.$10,325
D.$3,753
E.$12,408
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RossChapter02#77
Section:2.5
Topic:Operatingcashflow
78.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
Whatisthecashflowofthefirmfor2015?
A.$885
B.$8,042
C.$7,297
D.$6,425
E.$5,517
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RossChapter02#78
Section:2.5
Topic:Cashflowfromassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
79.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
Whatisnetnewborrowingfor2015?
A.$6,795
B.$5,565
C.$8,025
D.$6,795
E.$5,565
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RossChapter02#79
Section:2.5
Topic:Cashflowtocreditors
80.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
Whatisthecashflowtocreditorsfor2015?
A.$1,230
B.$8,025
C.$9,135
D.$5,565
E.$2,705
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RossChapter02#80
Section:2.5
Topic:Cashflowtocreditors
81.
NewTownIndustries
Taxrate35%
Revenues
Costofgoodssold
Interest
Dividends
Depreciation
Administrativeexpenses
Cash
Inventory
Accountspayable
Longtermdebt
Accountsreceivable
Commonstock
Netfixedassets
2015
$42,629
23,704
1,230
1,200
2,609
7,040
3,671
3,968
2,325
19,105
4,601
22,600
41,260
2014
$37,911
24,832
1,584
600
2,814
6,820
2,969
4,503
3,760
25,900
5,318
19,800
42,110
Whatisthecashflowtostockholdersfor2015?
A.
$1,200
B.
$2,800
C.
$1,520
D.
$1,600
E.
$2,800
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RossChapter02#81
Section:2.5
Topic:Cashflowtostockholders
[Link],JohnsonMillshadannualrevenueof$37,800,costofgoodssoldof$23,200,andadministrative
expensesof$6,[Link]$[Link]$2,810to
[Link]?
A.$2,300
B.$1,520
C.$2,640
D.$1,780
E.$2,900
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RossChapter02#82
Section:2.2
Topic:Incomestatement
[Link],WebsterFarmshadannualrevenueof$87,200,depreciationof$11,600,costofgoodssoldof
$54,700,andadministrativeexpensesof$8,[Link]$3,200individendsandpaidtaxesof$4,300.
Whatwastheoperatingcashflow?
A.$11,500
B.$8,300
C.$23,100
D.$19,900
E.$16,700
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RossChapter02#83
Section:2.5
Topic:Operatingcashflow
[Link]$411toretainedearningslastyearonsalesof$24,[Link]
expenseswere$4,370,depreciationwas$812,dividendspaidwere$285,andtheinterestexpensewas$103.
Whatwasthecostofgoodssoldifthefirmstaxratewas35percent?
A.$20,225
B.$24,385
C.$18,290
D.$14,815
E.$21,393
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RossChapter02#84
Section:2.2
Topic:Incomestatement
[Link]$2,840,acashflowtostockholdersof$1,630lastyear.
Thefirmspentanetof$1,420onfixedassetsandreducednetworkingcapitalby$[Link]
cashflow?
A.$6,190
B.$5,560
C.$3,500
D.$1,320
E.$4,9001
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RossChapter02#85
Section:2.5
Topic:Operatingcashflow
[Link]
balancesheetareliquid.
[Link]
liquid,thefirmneedstoreviewitsaccountsreceivabletoensuretheaccountsarecollectibleandalsoreviewits
inventorytoensureitissalableforatleasttheamountatwhichitisrecorded.<i>
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RossChapter02#86
Section:2.1
Topic:Balancesheet
[Link]?
Operatingcashflowisdesignedtorepresentthecashflowafirmgeneratesfromitsdaytodayoperating
[Link].
<i>
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RossChapter02#87
Section:2.5
Topic:Operatingcashflow
[Link].
Mostincomestatementscontainsomenoncashitems,sothesemustbeaccountedforwhencalculatingcash
[Link],however,sinceGAAPisusedtocreateincomestatements,revenuesandexpensesare
bookedwhentheyaccrue,notwhentheircorrespondingcashflowsoccur.<i>
[Link]
methodfordeterminingthevalueofafirmtoitsstockholders.
Theaccountsonthebalancesheetaregenerallycarriedathistoricalcost,[Link]
valueofcurrentassetsandcurrentliabilitiesmaycloselyapproximatemarketvalues,thesamecannotbesaid
[Link],stockholdersshouldfocusonthefirm'sstockprice,which
isamarketvaluemeasure,forthevalueoftheirinvestmentinthefirm.<i>
[Link],weneverincludethe
[Link]?Isthisanoversight?
[Link]
[Link]
showupascashflowchangesinotherbalancesheetaccounts.
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RossChapter02#90
Section:2.2
Topic:Incomestatement
[Link]
areexpensesthathavebeenaccrued,butnotyetpaid,notalsoconsideredtobenoncashitemsandtherefore
excludedfromoperatingcashflowjustasdepreciationisexcluded?
Accruedexpensesthathavenotbeenpaidwillappearinaccountspayableandthechangeinnetworking
[Link],theseunpaidexpensesaresubtractedfromtheoperatingcash
[Link]
[Link],ontheotherhand,istheexpensingofafixedassetcost
thatwaspaidforwhentheassetwasacquired.<i>
[Link],thetaxauthoritycomesinand
[Link]
doesthistellyouabouttheimportanceoftaxesrelativetoourdiscussionofcashflow?Whymightabusiness
ownerwanttoavoidsuchanoccurrence?
Taxesmustbepaidincash,andinthiscase,[Link]
reputationofabusinesscanundergoirreparableharmifwordgetsoutthatthetaxauthoritieshaveconfiscated
thebusiness,evenifonlyforacoupleofhoursuntilthebusinessownercancomeupwiththemoneytoclearup
[Link]'tcomeupwiththecash,thetaxauthorityhaseffectively
putthemoutofbusiness.<i>
[Link],inwords,whatcashflowofthefirmrepresentsbydiscussingoperatingcashflow,changesinnet
workingcapital,andadditionstofixedassets.
[Link],itisthe
cashinflowgeneratedasaresultofputtingthefirm'[Link]
[Link],afirmtypicallytakessomeofthecashflowit
[Link],then,isthecashflowafirm
generatesbyemployingitsassets,netofanyacquisitions.<i>
[Link]?
[Link]
cashflowasametrictoevaluateacompanycomesfromtheideathatthereislesssubjectivityinvolvedand
therefore,itishardertospinthenumbers.<i>
[Link]
thesetermssynonymouswithshortrunandlongrun?
Productcostsarethetotalproductioncostsincurredduringaperiodrawmaterials,directlabor,and
[Link]
salaries,officeexpenses,insurancethatareallocatedtoatimeperiodandarerecordedasselling,general,and
[Link]
costs,dependinguponthelengthoftimerequiredtovarythecostamount.<i>
1.
2.
3.
4.
5.
The financial statement showing a firms accounting value on a particular date is the:
a.
income statement.
b.
balance sheet.
c.
statement of cash flows.
d.
tax reconciliation statement.
e.
shareholders equity sheet.
A firm has a debt-equity ratio of .40. What is the total debt ratio?
a.
.29
b.
.33
c.
.67
d.
1.40
e.
1.50
Financial leverage refers to the:
a.
amount of debt used in a firms capital structure.
b.
ratio of retained earnings to shareholders equity.
c.
ratio of paid-in surplus to shareholders equity.
d.
ratio of cost-of-goods-sold to total sales.
e.
amount of receivables present in the firms asset structure.
The financial statement summarizing a firms performance over a period of time is the:
a.
income statement.
b.
balance sheet.
c.
statement of cash flows.
d.
tax reconciliation statement.
e.
shareholders equity sheet.
_____ refers to the firms interest payments less any net new borrowing.
a.
Operating cash flow
b.
Capital spending
c.
Net working capital
6.
d.
Cash flow from assets
e.
Cash flow to creditors
Ratios that measure a firms financial leverage are known as _____ ratios.
a.
asset management
b.
long-term solvency
c.
short-term solvency
d.
profitability
e. market value
7.
A firm has sales of $1,200, net income of $200, net fixed assets of $500, and current
assets of $300. The firm has $100 in inventory. What is the common-size statement
value of inventory?
8.
a.
8.3 percent
b.
12.5 percent
c.
20.0 percent
d.
33.3 percent
e.
50.0 percent
Jessicas Boutique has cash of $50, accounts receivable of $60, accounts payable of
$200, and inventory of $150. What is the value of the quick ratio?
a.
.30
b.
.55
c.
.77
d.
1.30
e. 1.82
9.
Ivans, Inc. paid $500 in dividends and $600 in interest this past year. Common stock increased by $200 and retained
earnings decreased by $100. What is the net income for the year?
a.
$400
b.
$500
c.
$600
d.
$800
e.
$1,000
10. Tims Playhouse paid $155 in dividends and $220 in interest expense. The addition to retained earnings is $325 and
net new equity is $50. The tax rate is 25 percent. Sales are $1,600 and depreciation is $160. What are the
earnings before interest and taxes?
a.
$480
b.
$640
c.
$860
d.
$1,020
e.
$1,440