FIN 534 – Homework Chapter 2
1. Below are the year-end balance sheets for Wolken Enterprises:
|
Assets: |
2013 |
2012 |
|
Cash |
$ 200,000 |
$ 170,000 |
|
Accounts receivable |
864,000 |
700,000 |
|
Inventories |
2,000,000 |
1,400,000 |
|
Total current assets |
$3,064,000 |
$2,270,000 |
|
Net fixed assets |
6,000,000 |
5,600,000 |
|
Total assets |
$9,064,000 |
$7,870,000 |
|
Liabilities and equity: |
||
|
Accounts payable |
$1,400,000 |
$1,090,000 |
|
Notes payable |
1,600,000 |
1,800,000 |
|
Total current liabilities |
$3,000,000 |
$2,890,000 |
|
Long-term debt |
2,400,000 |
2,400,000 |
|
Common stock |
3,000,000 |
2,000,000 |
|
Retained earnings |
664,000 |
580,000 |
|
Total common equity |
$3,664,000 |
$2,580,000 |
|
Total liabilities and equity |
$9,064,000 |
$7,870,000 |
Wolken has never paid a dividend on its common stock, and it issued $2,400,000 of 10-year non-callable, long-term debt in 2012. As of the end of 2013, none of the principal on this debt had been repaid. Assume that the company’s sales in 2012 and 2013 were the same. Which of the following statements must be CORRECT?
2. On its 2012 balance sheet, Barngrover Books showed $510 million of retained earnings, and exactly that same amount was shown the following year in 2013. Assuming that no earnings restatements were issued, which of the following statements is CORRECT?
3. Below is the common equity section (in millions) of Fethe Industries’ last two year-end balance sheets:
|
2012 |
2011 |
||
|
Common stock |
$2,000 |
$1,000 |
|
|
Retained earnings |
2,000 |
2,340 |
|
|
Total common equity |
$4,000 |
$3,340 |
|
The company has never paid a dividend to its common stockholders. Which of the following statements is CORRECT?
4. Which of the following statements is CORRECT?
5. Which of the following statements is CORRECT?
FIN 534 – Homework Chapter 3
1. A firm wants to strengthen its financial position. Which of the following actions would increase its quick ratio?
2. Amram Company’s current ratio is 1.9. Considered alone, which of the following actions would reduce the company’s current ratio?
3. Which of the following statements is CORRECT?
4. Which of the following statements is CORRECT?
5. Which of the following statements is CORRECT?
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