Fundamentals of Accounting , Part 2 1. What is the correct order of the following events in the accounting process? I. Financial statements are prepared II. Adjusting entries are recorded III. Nominal accounts are closed a. I,II, III b. II, I, III c. III,II,I d. II,III,I 2. The first step in the accounting cycle is to a. Record transactions in a journal b. Analyze transactions from source documents c. Post journal entries to general ledger accounts d. Adjust the general ledger accounts 3. Which of the following is not characteristic of proprietary theory that influences accounting for partnerships? a. Partners’ salaries are viewed as a distinguishing of income rather than component of net income. b. Partnership is not viewed as separate entity, distinct, taxable entity. c. A partnership is characterized by limited liability. d. Changes in ownership structure of a partnership result in the dissolution of the partnership. 4. Which of the following statement is correct with respect to a limited partnership? a. A limited partner may not be an unsecured creditor of the limited partnership. b. A general may not also be limited partner at the same time. c. A general partner may be a secured creditor of the limited partnership. d. A limited partnership can be formed with limited liability for all partners. 5. On January 1, 2006, Atta and Boy agreed to form a partnership contributing their respective assets and equities subject to adjustments. On that date, the following were provided: Atta Boy Cash P 28,000 62,000 Accounts receivable 200,000 600,000 Inventories 120,000 200,000 Land 600,000 Building 500,000 Furniture and fixtures 50,000 35,000 Intangible assets 2,000 3,000 Accounts payable 180,000 250,000 Other liabilities 200,000 350,000 Capital 620,000 800,000 The following adjustments were agreed upon: a. Accounts receivable of 20,000 and 40,000 are uncollectible in A’s and B’s respective books. b. Inventories of 6,000 and 7,000 are worthless in A’s and B’s respective books. c. Intangible assets are to be written off in both books. What will be the capital balances of the partners after adjustments? Atta Boy a. P 592,000 P 750,000 b. 600,000 700,000
c. d.
592,000 600,000
756,300 750,000
6. When property other than cash is invested in a partnership, at what amount should the non-cost property be credited to the contributing partners’ capital account? a. Fair value at the date of contribution. b. Contributing partner’s original cost. c. Assessed valuation for property tax purposes. d. Contributing partner’s tax basis. 7. May 1, 2006, Cobb and Mott formed a partnership and agreed to share profits and losses in the ratio of 3:7 respectively. Cobb contributed a parcel of land that cost him 10,000.Moth contributed P 40,000 cash. The land was sold for P 18,000 on May 1, 2006,immediately after formation of the partnership. What amount should be recorded in Cobb’s capital account on formation of the partnership? a. P18,000 b. 17,000 c. 15,000 d. 10,000 8. Abel and Carr formed a partnership and agreed to divide initial capital equally, even though Abel contributed P100, 000 and Carr contributed P84, 000 in identifiable assets. Under the bonus approach to adjust the capital accounts, Carr’s unidentifiable asset should be debited for a. P46, 000 b. 16, 000 c. 8, 000 d. 0 9. Mary admits Jane as a partner in the business. Balance sheet accounts of Mary just before the admission of Jane show: Cash, 26,000. Accounts receivable, 120,000, Merchandise inventory, 180,000 and accounts payable, 62,000. It was agreed that for purposes of establishing Mary’s interest, the following adjustments be made: 1. an allowance for doubtful accounts of 3% of accounts receivable is to be established. 2. Merchandise inventory is to be adjusted upward by 25,000 and 3 prepaid expenses of 3,600 and accrued liabilities of 4,000 are to be recognized. If Jane is to invest sufficient cost to obtain 2/5 interest in the partnership, how much would Jane contribute to the new partnership? a. 176,000 b. 190,000 c. 95,000 d. 113,980 10. If the partnership agreement does not specify how income is to be allocated, profit and loss should be allocated a. Equally b. In proportion to weighted average of capital invested during the period. c. Equitability so that partners are compensated for the time and effort expended on behalf of the partnership. d. In accordance with their capital contribution. 11. Which of the following is not a component of the formula used to distribute income? a. Salary allocation to those partners working.
b. After all other allocation, the remainder divided according to the profit and loss sharing ratio. c. Interest on the average capital investments. d. Interest on notes to partners. 12. The ABC partnership reports net income of P60, 000. If partners A, B, and C have income ratio of 50%, 30%, and 20% respectively. What is the share of partner C from the net income of the partnership, if he was given a capital ratio of 25%? a. 30,000 b. 12,000 c. 18,000 D. 15,000 13. Which of the following will not comprise financial statements of a partnership business? a. Statement of Financial Position b. Statement of Changes in Owner’s Equity c. Statement of Comprehensive Income d. Statement of Cash Flow 14. Which of the following can be found in a Statement of Financial Position of a partnership business but not in the sole proprietorship? a. Owner’s equity b. Accumulated Depreciation c. Partner’s Equity d. Accounts payable 15. The basic components of financial statements include all of the following, except a. Statement of Retained Earnings b. Statement of Changes in Equity c. Cash Flow statement d. Statement of recognized gains and losses 16. The elements of financial statements shall be measured in a. Constant pesos b. Nominal pesos c. Fixed pesos d. Flexible pesos 17. The following information is available from Domi Company’s accounting records for the current year: Purchases 5,300,000 Purchase discounts 100,000 Beginning inventory 1,600,000 Ending inventory 2, 150,000 Freight out 400,000 What is the cost of goods sold for the current year? a. 4,750,000 c. 5,050,000 b. 4,650,000 d. 5,850,00 18. Nikkoey Company showed net income of P480,000 in its income statement for the current year. Selling expenses were equal to 15% of sales and also 25% of cost of sales. All other expenses were 13% of sales. What was the gross profit for the current year?
19.
20.
21.
22.
23.
24.
a. 4,000,000 c. 1,600,000 b. 2,400,000 d. 2,000,000 Which of the following should be presented on the statement of changes in partner’s equity? a. Total comprehensive income for the period showing separately the total amounts attributable to owners of the parent and to minority interests. b. The amounts of transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners. c. For each component of equity, a reconciliation between the carrying amount at he beginning and the end of the period, separately disclosing each change. d. All of the above A statement of changes in partner’s equity should include all of the following, except a. Partner’s payments of loans b. Investment during the period c. Beginning capital balances d. Ending capital balances Statement of Financial Position analysis is useful in assessing an entity’s liquidity which is the ability to a. Satisfy short-term obligations b. Maintain profitable operations c. Maintain past levels of preference and ordinary dividends d. Survive a major economic downturn Accrued revenue would normally appear on the balance sheet under a. Plant assets c. Long-term liabilities b. Current assets d. Current liabilities Which of the following indicates a cash inflow from operating activities? a. Payments to employees b. Receipt from royalties, fees, commissions and other revenues c. Receipts from sale of property and equipment d. Receipts from investment by owners Which of the following indicates a cash outflow from investing activities? a. Payments to acquire property plant and equipment b. Payments for taxes c. Payments to settle notes payable d. Payments to employees 25. Which of the following results in dissolution of a partnership? a. The contribution of additional assets to the partnership by an existing partner. b. The receipt of a draw by an existing partner. c. The winding of the partnership and the distribution of the remaining assets to the partners. d. The withdrawal of a partner from a partnership 26. Partnership A has an existing capital of P70, 000. Two partners currently owned the partnership in split profits 50/50. A new partner is to be admitted and will contribute newt assets with a fair value of P90, 000. For no goodwill or bonus [depending on which ever method is used] to be recognized, what is the interest in the partnership granted the new partner? a. 33.33% b. 50.00% c. 56.25% d. 75.00%
27. In May 2006, Imelda, a partner of an accounting firm decided to withdraw when the partner’s capital balances were: Mikee, P600, 000; Raul, P600, 000; and Imelda, P400, 000. It was agreed that Imelda is to take the partnership’s fully depreciated computer with a secondhand value of P24, 000 that costs the partnership P36, 000. If profits and losses are shared equally, what would be the capital balances of the remaining partners after the retirement of Imelda? Mikee Raul a. P600,00 P600,000 b. P592,000 P592,000 c. P608,000 P608,000 d. P612,000 P612,000 28. Ranken purchases 50% of Lark’s capital interest in the K and L partnership for P22, 000. If the capital balances of Kim and Lark are P40, 000 and P30, 000 respectively. Ranken’s capital balance following the purchase is a. P22,000 b. 35,000 c. 20,000 d. 15,000 29. The following information pertains to ABC partnership of Amor, Bing, and Cora: Amor, capital [20%] P200,000 Bing, capital [30%] 200,000 Cora, capital [50%] 300,000 On this date, the partners agreed to admit Dolly to the partnership. Assuming Dolly purchase 50% of the partner’s capital and pays P500, 000 to old partners, how would this amount be distributed to them? a. P100,000 P150,000 P250,000 b. P130,000 P145,000 P225,000 c. P166,667 P166,667 P166,666 d. P150,000 P150,000 P200,000 30. When a partnership business dissolved and formed a corporation, one of the partner rendered a services and in return the business gave him shares to compensate for the rendered service, in this case, when shares are issued for services received, the measure is equal to the a. Fair value of such services b. Par value of the share issued c. Book value of the shares issued d. Fair value of the shares issued 31. When a partner withdraws from a partnership taking assets that represent less than his capital balance, a. No bonus results b. The remaining partner receives a bonus c. The withdrawing partner receives a bonus d. The remaining partners owe the withdrawing partner the difference. 32. The doctrine of marshaling of assets a. Is applicable only if the partnership is insolvent b. Allows partners to first contribute personal assets to unsatisfied partnership creditors. c. Is applicable if either the partnership is insolvent or individual partners are insolvent. d. Amount owed to personal creditors and to the partnership for debit capital balances are shared proportionately from the personal assets of the partners. 33. The following is the priority sequence in which liquidation proceeds will be distributed for a partnership.
a. Partnership liabilities, partnership capital balances, partnership loans b. Partnership liabilities, partnership loans, partnership drawings, partnership capital balances c. Partnership liabilities, partnership loans, partnership capital balances d. Partnership drawings, partnership liabilities, partnership loans, partnership capital balances 34. Pedro and Juan who share profits and losses equally, decided to liquidate heir partnership when their net assets amounted to P260,000, and capital balances of P170,000 and P90,000, respectively. If the non-cash assets were sold for amount equal to its book value, what amount of cash should Pedro and Juan received? Pedro Juan a. P 130,000 P 130,000 b. 170,000 90,000 c. 180,000 80,000 65,000 d. 195,000 35. Because of very unprofitable operations, partners Nal, Lou and Gee decided to dissolve the partnership when their capital balances and profit and loss ratio were: Nal, capital (30%) P 175,000 Lou, capital (20%) 125,000 Gee, capital (50%) 175,000 Total Upon liquidation, all of the partnership’s assets are sold and sufficient cash is realized to pay all liabilities except one for P25,000. Gee is personally insolvent, but the others are capable of meeting any indebtedness of the firm. By what amount would the capital of Nal change? a. P 7,500 decrease b. 150,000 decrease c. 195,000 decrease d. No change 36. As of December 31, the books of AME Partnership showed capital balances of A-P40,000; M- P25,000; and EP 5,000. The partner’s profit and loss ratio was 3:2:1 respectively. The partners decided to dissolve and liquidate. They sold all the non-cash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have P28,000 cash left for distribution. The loss on the realization of the non-cash assets was a. 40,000 c. 44,000 b. 42,000 d. 45,000 37. Assuming in No. 36, that any partner’s capital debit balance is uncollectible, the share of A in the P28,000 cash for distribution would be a. 19,000 c. 40,000 b. 18,000 d. 17,800 38. The condensed balance sheet of Alex, Jay and John as March 31, 2010 follows: Cash P 28,000 Liabilities P 48,000 Other assets 265,000 Alex, capital 95,000 Jay, capital 80,000 John, capital 70,000 Total P293,000 Total P 293,000 39. A corporation has the following attributes except a. Enjoys the right of succession b. An artificial being with a personality separate and apart from its shareholders. c. Created by operation of law d. None of the above 40. The advantage of a corporation from a partnership is a. The death of a shareholder will not dissolve the corporation because of its power of succession. b. Its management is centralized on the board of directors
c. Shareholders have limited liability d. All of the above 41. It is the process of bringing together the incorporators or the persons interested in the business, of procuring subscriptions or capital for the corporation and of setting in motion the machinery that leads to the incorporation of the corporation itself. a. Commencement c. advertisement d. organization b. Promotion 42. When should By-laws be adopted? a. One month from the issuance of he certificates of incorporation by the SEC. b. Two months from the issuance of he certificates of incorporation by the SEC. c. Three months from the issuance of he certificates of incorporation by the SEC. d. Six months from the issuance of he certificates of incorporation by the SEC. 43. Which of the following are not permitted to issue no-par value shares? a. Trust companies c. Lending associations b. Educational institutions d. None of the above 44. When Bradley Company incorporated, it was authorized to issue 1,000,000 shares of common stock. It immediately issued 50,000 shares. In 2007, it issued an additional 20,000 shares. In 2010, it repurchased 5,000 shares with the intent of reissuing them. On the December 31, 2010, balance sheet, Bradley Company would show a. 50,000 shares issued and 45,000 shares outstanding b. 70,000 shares issued and 65,000 shares outstanding c. 70,000 shares issued and 70,000 shares outstanding d. 1,000,000 shares issued and outstanding. 45. Choose a situation which illustrates the minimum requirement of the law to corporate formation: Authorized Subscribed Pain-in Capital a. P 100,000 P 25,000 P 5,000 b. 100,000 5,000 5,000 c. 50,000 12,500 3, 125 d. 60,000 15,000 5,000 46. These are persons who bring about or cause to bring about the formation and organization of a corporation a. Underwriters c. Promoters b. Subscribers d. Incorporators 47. These represent the record of all business transactions. This normally includes the journal and the ledger. a. Shareholders’ ledger c. Books of accounts b. Subscribers’ ledger d. Minutes book 48. This is kind of shares in which a specific amount is fixed in the articles of incorporation and appearing on the certificate of stock. a. Par c. No-par b. Voting d. Non-voting 49. This is a stock that has been issued by the corporations as fully paid and later reacquired but not retired. a. Promotion shares c. Treasury shares b. Convertible shares d. De-bawi shares 50. Polar Company issued 20,000 new P100 par ordinary shares at a fair value of P180 each. Polar identified costs in relation to the shares issue: Professional fees 400,000 Internal management time in managing the process 300,000 What is the increase in equity as a result of the issuance of shares? a. 3,200,000 c. 2,900,000 b. 3,320,000 d. 2,970,000
51. At the beginning of the current year, Alto Company declared 1 for 5 reverse share split, when the market value of the share was P100. Prior to the split, Alto had 100,000 shares of P10 par value issued and outstanding. After the split, what is the par value of the share? a. 10 c. 50 b. 20 d. 2 52. In case shares are issued for outstanding liabilities, what is the measure for recording? a. Book value of the shares issued b. Amount of liabilities set off c. Fair value of the shares issued d. Par value of the shares issued 53. The Lucky Company was authorized to issue P400,000 ordinary shares divided into 4,000 shares with a par value of 100 per share. Using the Journal entry method, what is the entry on that date? a. Memo entry only b. Unissued Ordinary shares 400,000 Authorized Ordinary Shares 400,000 c. Subscription Ordinary Shares 400,000 Authorized Ordinary Shares 400,000 d. No entry even a memorandum 54. Subscription receivable and other receivables from sale of shares which are not collectible shall be presented as a. Other asset b. Deduction from the related subscribed share capital in the shareholders’ equity section c. Current asset d. Long-term investment 55. Loss on retirement of treasury shares shall be debited to a. Retained Earnings b. Share premium from treasury shares and then to retained earnings c. Share premium from treasury shares, share premium from original issuances and then to retained earnings d. Share premium from original issuances, share premium from treasury shares and then retained earnings. 56. Korina Company was organized on January 1, 2010 with 100,000 shares authorized of P100 par value. On January 5, Korina issued 75,000 shares at P140 per share and on December 31, Korina purchased 5,000 shares at P110 per share. Korina used the par value method of recording the purchased of treasury shares. What is the balance of the share premium from treasury shares on December 31, 2010? a. 200,000 c. 50,000 d. 0 b. 150,000 57. The total cost of treasury shall be reported as a. Deduction from shareholders’ equity b. Asset c. Deduction from retained earnings d. Deduction from share premium 58. What is the effect of a thing donated to the corporation? a. Increase the asset and decrease the equity b. Increase the asset and stockholders equity c. Decrease the asset and stockholders equity d. Decrease the asset and increase stockholders equity 59. On December 1 of the current year, Line Company received a donation of 2,000 shares with P50 par value from a shareholder. On that date, the share market value was P350. The shares were originally issued for P250 per share. What is the decrease in shareholders’ equity as a result of the donation? c. 200,000 a. 700,000
b. 500,000 d. 0 60. It is contributions, including shares of the corporation, received from shareholders should be recorded at the fair market value of the items received, with the credit going to share premium. This is called a. Contributed capital c. Donated capital b. Legal capital d. Given capital 61. This represent the cumulative balance of periodic net income or loss, dividend distributions, prior period errors, changes in accounting policy and other capital adjustments. c. Investment a. Retained Earnings b. Net Income d. Income Summry 62. On July 31 of the current year, Sun Company purchased 500,000 shares of Star Company. On December 31, Sun distributed 250,000 shares of Star as a dividend to Sun’s shareholders. This is an example a. Property dividend b. Investment dividend c. Liquidating dividend d. Stock dividend 63. The issuer should charge retained earnings for the market value of shares issued in a a. 1 for 5 stock dividend b. 1 for 8 stock dividend c. 4 for 1 stock split d. 2 for 1 stock split 64. On November 1, 2010, Grande Company declared a property dividend of equipment payable on March 1, 2011. The carrying amount of the equipment is P3,000,000 and the fair value is P 2,500,000 on November 1, 2010. However, the fair value less cost to distribute the equipment is P2,200,000 on December 31, 2010 on March 1,2011. What is the dividend payable on December 31,2010? a. 2,500,000 c. 3,000,000 b. 2,200,000 d. 0 65. With regards to No. 64, what is the measurement of the equipment on December 31, 2010? a. 2,500,000 c. 3,000,000 b. 2,200,000 d. 2,000,000 66. The following information pertains to Mega Company: • Dividends on its 10,000 cumulative preference shares of 10%, P100 par value have not been declared or paid for 3 years. • Treasury shares were acquired at a cost of P1,500,000. The treasury shares had not been reissued as of year-end. What amount of retained earnings should be appropriated as a result of these items? a. 1,500,000 c. 300,000 b. 1,800,000 d. 0 67. East Company, a calendar year company, had sufficient retained earnings in 2010 as a basis for dividends but was temporarily short of cash. East declared a dividend of P1,000,000 on April 1,2010, and issued promissory notes to its shareholders in lieu of cash. The notes, which were dated April 1, 2010, had a maturity date of March 31, 2011 and a 10% interest rate. How should East account for the scrip dividend and related interest? a. Debit retained earnings for P1,000,000 on April 1,2010 b. Debit retained earnings for P1,100,000 on March 31,2011 c. Debit retained earnings for P1,000,000 on April 1,2010 and debit interest expense for P1,000,000 on March 31, 2011 d. Debit retained earnings for P1,000,000 on April 1,2010 and debit interest expense for P75,000 on December 31, 2011. 68. Undistributed stock dividend should be reported as c. an addition to share capital outstanding a. A current liability b. A reduction in total shareholders’ equity d. A note to FS
69. A retained earnings appropriation is used to a. Absorb a fire loss when a company is self-insured b. Smooth periodic income c. Provide for a contingent loss that is probable and measurable d. Restrict earnings available for dividends 70. Long Company had 10,000 shares issued and outstanding at January 1, 2010. During 2010, Long took the following actions: March 15 Declared a 2-for-a share split, when the fair value of he share was P80 per share. December 15 Declared a P5 per share cash dividend.
71.
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In the statement of changes in equity for 2010, what amount should be reported as dividends? a. 50,000 c. 850,000 d. 950,000 b. 100,000 In computing basic earnings per share, the amount of preference dividends on noncumulative preference shares shall be a. Deducted from net income whether declared or not b. Added to net income only when declared c. Deducted from net income only when declared d. Ignored An entity has an ordinary “A” class, nonvoting share, which is entitled to a fixed dividend of 6% per annum. The “A” class ordinary share will a. Be included in the “per share” calculation after adjustment for the fixed dividend. b. Be included in the “per share” calculation for EPS without adjustment for the fixed dividend. c. Not be included in the “per share” calculation for EPS. d. Be included in the calculation of diluted EPS. Manufacturing costs would include but a. Indirect materials used b. Sales salaries expense c. Indirect labor cost d. Depreciation on factory equipment The purchases-raw materials account is debited when a. Direct materials are purchased b. indirect materials are purchased c. direct materials are placed into production d. indirect materials are placed into production Zew Company has a job costing system and an overhead application rate of 120% of direct labor cost. Job No. 33 is charged with direct material of P12,000 and overhead of P7,200. Job No. 34 has direct material of P2,000 and direct labor of P9,000. What amount of direct labor cost has been charged to Job No. 33? a. 6,000 c. 7,200 b. 8,640 d. 14,400 Application rates for factory overhead best reflect anticipated fluctuations in sales over a cycle of years when they are computed under the concept of a. Maximum capacity c. Normal capacity b. Practical capacity d. Expected actual capacity Chorokee Co. applies factory overhead on the basis of direct labor hours. Budget and actual data for direct labor and overhead for the year are as follows: Budget Actual Direct labor hours 600,000 650,000 Factory overhead costs P 720,000 P760,000 The factory overhead for Chorokee for the year is a. Overapplied by P20,000 b. Overapplied by P40,000 c. Underapplied by P20,000
d. Underapplied by P40,000 78. Worley Co. has underapplied overhead of P45,000 for the year. Before disposition of underapplied overhead, selected year-end balances form Worley’s accounting records were Sales P 1,200,000 Cost of Goods Sold 720,000 Direct materials inventory 36,000 Work in process inventory 54,000 Finished goods inventory 90,000 Under Worley’s cost accounting system, over or under applied overhead is assigned to appropriate inventories and cost of goods sold based on year-end balances. In its year-end income statement, Worley should report cost of goods sold of c. 684,000 a. 765,000 b. 757,500 d. 682,500 79. How much is the total manufacturing cost of a product that consume P500,000 of raw materials, 50% of raw materials equivalent to direct labor and a manufacturing cost of P250,000? a. P750,000 c. P1,000,000 b. P 500,000 d. P 250,000 80. Under a job order cost system, the peso amount of the general ledger entry involved in the transfer of inventory from work in process to finished goods is the sum of costs charged to all jobs a. Completed during the period b. Completed and sold during the period c. In process during the period d. Started in process during the period. 81. What is the difference of the worksheet of a Manufacturing Company from that of other forms of business organization? a. It has a purchases account b. It omits the depreciation and accumulated depreciation account of the company c. Includes a pair of columns for cost of goods manufactured. d. It omits the nominal accounts 82. The analysis for financial statement is important for all of the company, there are many bases that can be used for comparison of this analysis, which one is not being use? a. Intercompany basis b. Intracompany basis c. Industry averages d. Ratio analysis 83. Provides a rough approximation of the average time that it takes to collect receivables a. Average age of receivables b. Inventory turnover c. Accounts receivable d. None of the above 84. This is a technique for evaluating a series of financial statement data over a period of time. a. Horizontal analysis b. Vertical analysis c. Intercompany analysis d. Ratio analysis 85. Assume Company A has a profit of P2,000,000 with net sales of P25,000,000 and Company B has a profit of P1,800,000 on net sales of P9,000,000. Company A and Company B have profit-to-net-sales ratios of 8% and 20% respectively. If the two company works of the same industry, which of the following is true? a. Company B is better managed than Company A b. Company A is quite good than Company A c. Company A has a higher profit margin
d. All of the above 86. Measures management’s efficiency in using its assets to earn profits a. Basic earnings per share b. Return on total assets c. Return on ordinary equity d. None of the above 87. You have been asked to evaluate the liquidity position of Kim Fitness Center. The following data are from Kim’s annual report: Cash P260,000 Trading Investments 120,000 Accounts Receivable Jan 1 312,000 Dec 31 428,000 Merchandise Inventory Jan 1 504,000 Dec 31 372,000 Current Liabilities 480,000 Cost of Goods Sold 6,000,000 Credit Sales 10,000,000 What is the Company’s working capital? a. P500,000 b. P700,000 c. P350,000 d. P800,000 88. Based on Number 87, what is Kim’s Inventory turnover? a. 27.4 b. 26.8 c. 13.7
d. 30.0
89. Based on Number 87, what is Kim’s Average age of receivables? a. 13 days b. 28 days c. 27 days
d. 26.8 days
90. Based on Number 87, what is Kim’s quick ratio? a.1. 68 b. 1.89 c. 2.0
d. 2.5
91. The following data are from the financial statements of FAILA, Inc.: Dec. 31, 2010 Jan. 1, 2010 Total Assets P 180,000 P140,000 Total Equity 144,000 112,000 Total Preference Equity 30,000 30,000 Preference Dividend Declared 2,400 Profit 20,000 Interest Expense 5,750 Calculate the ratio on return on Total Assets: a.15.10% b. 14.50% 92. Based on # 91, what is return on ordinary equity? a.17.96% b. 13.56%
c. 18.9%
d. 16.09%
c. 14.57%
d. 12.5%
93. Cozy is analyzing the earnings performance of the Baliwag Star Transport Corporation. She has gathered the following data from Baliwag Star’s financial statements and from a report of the closing market prices of shares: Profit for 2010 Preference dividends declared during 2010 Ordinary dividends declared Dec. 31, 2010 Number of Baliwag Star ordinary shares outstanding:
P 743,000 60,000 620,000
Jan. 1, 2010 Dec. 31,2010 Market price per ordinary share on December 31,2010
1,100 shares 1,300 shares P15
What is the Basic earnings per ordinary share? a. .57 b. .45 c. .89
d. .75
94. Based on Number 93, what is the Price-earnings ratio? a. 20.25:1 b. 26.36:1 c. 34.45:1
d. 42.12:1
95. Based on Number 93, what is the company’s dividend yield on ordinary share? a. 3.44% b. 2.5% c. 4.44% d. 1.2% 96. The president of Corpuz, Inc., has asked you to gather some statistics about his company’s solvency. You have complied the following data: Profit Income Tax Rate Interest Expense Total Liabilities Total Equity
P900,000 35% 100,000 2,048,000 4,352,000
What is the company’s Times interest earned ratio? a.15.25 c. 14.85 b.12.67 d. 18.90 97. Using the data in # 96, what is Corpuz’ debt ratio? a.23& b. 32%
c. 45%
d. 12%
98 Using the data in # 97, what is Corpuz’ Equity ratio? a.68% b. 69% c. 79%
d. 75%
99. Measures how readily a company can meet interest payments with profit earned from operations a. times interest earned ratio c. equity to total assets ratio b. debt to total assets ratio d. none of these 100. Shows the percentage of he company’s assets financed by debt a. equity to total assets ratio c. times interest earned ratio b. debt to total assets ratio d. none of these
