Chapter 2 - Homework Questions

Swearingen United has total owners' equity of $18,800. The firm has current assets of $23,100, current liabilities of $12,200, and total assets of $36,400. What is the value of the long-term debt? a. $5,400 b. $12,500 c. $13,700 d. $29,800 e. $43,000

a. $5,400

Gracie Art Gallery has total assets of $236,450, net working capital of $28,523, owners' equity of $128,659, and long-term debt of $105,000 What is the value of the current assets? a. $85,413 b. $31,314 c. $63,595 d. $79,628 e. $105,000

b. $31,314

The accounting statement that measures the revenues, expenses, and net income of a firm over a period is called the: a. statement of cash flows b. income statement c. GAAP statement d. balance sheet e. net working capital schedule

b. income statement

Dakota Pride Farms has sales of $509,600, costs of $448,150, depreciation expense of $36,100, and interest paid of $12,400. The tax rate is 21 percent. How much net income did the firm earn for the period? a. $7,778 b. $9,324 c. $10,231 d. $8,671 e. $5,886

c. $10,231

Prospect Avenue Nursery has sales of $318,400, costs of $199,400, depreciation expense of $28,600, interest expense of $1,100, and a tax rate of 21 percent. The firm paid out $23,400 in dividends. What is the addition to retained earnings? a. $36,909 b. $34,645 c. $47,147 d. $37,208 e. $40,615

c. $47,147

Di Bacco Winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities of $34,700, and long-term debt of $23,000. What is the value of the owners' equity? a. $36,900 b. $66,700 c. $71,600 d. $89,400 e. $106,300

c. $71,600

Earley Construction has beginning retained earnings of $284,300. For the year, the company earned net income of $13,700 and paid dividends of $9,000. The company also issued $25,000 worth of new stock. What is the value of the retained earnings account at the end of the year? a. $287,204 b. $289,454 c. $294,134 d. $289,000 e. $314,000

d. $289,000

Nikki Heart Photography has total assets of $31,300, long-term debt of $8,600, net fixed assets of $25,600, and owners' equity of $20,540. What is the value of the net working capital? a. $9,800 b. $104,595 c. $18,900 d. $3,540 e. $23,200

d. $3,540

St. Louis Warehouse has net working capital of $42,400, total assets of $519,300, and net fixed assets of $380,200. What is the value of the current liabilities? a. $61,700 b. $88,400 c. $102,900 d. $96,700 e. $111,500

d. $96,700

The financial statement that summarizes a firm's accounting value as of a particular date is called the: a. income statement b. cash flow statement c. liquidity position d. balance sheet e. periodic operating statement

d. balance sheet

De la Cruz Automotive has net working capital of $22,600, current assets of $56,500, equity of $62,700, and long-term debt of $31,900. What is the amount of the net fixed assets? a. $9,300 b. $49,400 c. $94,600 d. $103,900 e. $72,000

e. $72,000

Net working capital is defined as: a. the depreciated book value of a firm's fixed assets b. the value of a firm's current assets c. available cash minus current liabilities d. total assets minus total liabilities e. current assets minus current liabilities

e. current assets minus current liabilities