Multiple Choice Answers

If $4,000,000 of 12% bonds are issued at 101, the amount of cash received from the sale is:

a. $4,040,000
b. $4,000,000
c. $4,080,000
d. $3,520,000

The outstanding stock is composed of 10,000 shares of $100 par, cumulative preferred $8 stock, and 50,000 shares of no-par common stock. Preferred dividends have been paid every year except for the preceding two years and the current year. If $160,000 is to be distributed as a dividend of the current year, what total amount will be distributed to the preferred shareholders?

a. $0
b. $80,000
c. $130,000
d. $160,000

What type of analysis is indicated by the following?

Increase (Decrease *)
2002 2001 Amount Percent
Current assets $380,000 $500,000 $120,000* 24%*
Fixed assets 1,680,000 1,500,000 180,000 12%

a. vertical analysis
b. horizontal analysis
c. liquidity analysis
d. common-size analysis

Based on the following data for the current year, what is the inventory turnover?

Net sales on account during year $500,000
Cost of merchandise sold during year 300,000
Accounrs receivable, beginning of year 45,000
Accounts receivable, end of year 35,000
Inventory, beginning of year 90,000
Inventory, end of year 110,000

a. 3.0
b. 8.0
c. 4.0
d. 3.8

A corporation has 10,000 shares of $100 par value stock outstanding. If the corporation issues a 4-for-1 stock split, the number of shares outstanding after the split will be 40,000.