27 Jun 1) YOUR FIRM HAS THE FOLLOWING BALANCE SHEET STATEMENT ITEMS: TOTAL LIABILITIES OF $1,005,000; TOTAL ASSETS OF $2,655,000
Week Two Problem Set
Reminder: Per the instructors policies, calculations (on how answers were derived) must be shown for
each of the problems (1-10) below. See Instructor Announcements for sample submission document
1) Your firm has the following balance sheet statement items: total liabilities of $1,005,000; total assets of $2,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000. What is the amount of the firms total stockholders equity?
A) $3,650,885
B0 $550,000
C) $1,650,000
D) $833,000
2) Delta Corp. reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000. Delta Corp.s gross profit is equal to
A) $770,000.
B) $1,070,000.
C) $1,100,000.
D) $1,500,000.
3) Delta Corp. reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000. Delta Corp. operating income is equal to
A) $770,000.
B) $1,070,000.
C) $1,100,000.
D) $1,500,000.
4) Use the following information to calculate the company’s accounting net income for the year.
Sales $1,300,000
Operating Expenses $900,000
Accounts Receivable $1,300,000
Accounts Payable (Beg. of Year) $150,000
Corporate Tax Rate 40%
A) $300,000
B) $240,000
C) $125,000
D) $120,000
5) Susannah Stores Inc. has sales of $4,000,000; the firm’s cost of goods sold is $2,500,000; and its total operating expenses are $600,000. What is Susannah Stores Inc., EBIT?
A) $850,000
B) $875,000
C) $900,000
D) $1,300,000
6) Susannah Stores Inc. has sales of $4,000,000; the firm’s cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm’s interest expense is $250,000, and the corporate tax rate is 40%. What is Susannah Stores Inc., net income?
A) $288,000
B) $350,000
C) $377,000
D) $390,000
7) Susannah Stores Inc. has sales of $4,000,000; the firm’s cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm’s interest expense is $250,000, and the corporate tax rate is 40%. The firm paid dividends to preferred stockholders of $40,000, and the firm distributed $60,000 in dividend payments to common stockholders. What is Susannah Stores Inc., “Addition to Retained Earnings” that would be reflected per the Retained Earnings Statement Balance?
A) $650,000
B) $390,000
C) $330,000
D) $290,000
8) Conglomerate, Inc. has total current assets of $1,200,000; total current liabilities of $500,000; and long-term assets of $800,000. How much is the firm’s Total Liabilities & Equity?
A) $2,500,000
B) $1,300,000
C) $2,000,000
D) $1,800,000
9) Conglomerate, Inc. has sales of $4,250,000; the firm’s cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm’s interest expense is $250,000, and the corporate tax rate is 40%. What is Conglomerate, Inc.s tax liability?
A) $258,000
B) $260,000
C) $360,000
D) $600,000
10) Use the following information to answer the questions below. In 2004, Bobbalee, Inc. expects operating income (earnings before interest and taxes) of $18,000,000. In addition, the corporation has $20,000,000 of debt outstanding with a 10 percent interest rate and will pay $1,000,000 in dividends to its common stockholders. Assume that Bobbalee will receive no other sources of income during 2004. Bobbalees s taxable income for 2004 will be:
A) $18,000,000.
B) $17,000,000.
C) $16,000,000.
D) $15,000,000.
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