FNAN 300 CH. 2 Quiz

The balance sheet of a firm shows beginning net fixed assets of $348,200 and ending net fixed assets of $371,920. The depreciation expense for the year is $46,080 and the interest expense is $11,460. What is the amount of the net capital spending?

Net capital spending = $371,920 -348,200 + 46,080 = $69,800

Marcie's has sales of $179,600,depreciation of $14,900, costs of goods sold of $138,200, and other costs of $28,400. The tax rate is 35 percent. What is the net income?

Net income = ($179,600 -138,200 -28,400 -14,900)(1 -.35) = -$1,235

Gino's 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?

Owners' equity = $29,800 + 64,800 -23,000 = $71,600

BT Trucking has taxable income of $617,429. How much does it owe in taxes?

Total tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($235,000) + .34($617,429-335,000) = $209,925.86 Because the marginal and average tax rates are the same at this level of income, the tax can also be computed as: Total tax = .34($617,429) = $209,925.86

Shareholders' equity is best defined as:

the residual value of a firm

Andersen's 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 35 percent. The firm paid out $23,400 in dividends. What is the addition to retained earnings?

Addition to retained earnings = [($318,400 -199,400 -28,600 -1,100)(1 -.35)] - $23,400 Addition to retained earnings = $34,645

Neiger Flours owes $16,929 in taxes on taxable income of $61,509. If the firm earns $100 more in income, it will owe an additional $48 in taxes. What is the average tax rate on income of $61,609?

Average tax rate = ($16,929 + 48)/$61,609 = .2756, or 27.56 percent

Suzette's Market had long-term debt of $638,100 at the beginning of the year compared to $574,600 at year-end. If the interest expense was $42,300, what was the firm's cash flow to creditors?

Cash flow to creditors = $42,300 - ($574,600 -638,100) = $105,800

Which one of the following is an intangible fixed asset?

Copyright

Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600. What is the value of the current assets?

Current liabilities = $98,300-38,600 -41,600 = $18,100 Current assets = $11,300 + 18,100 = $29,400