FIN 300 Ch. 2

The accounting statement that measures the revenues, expenses, and net income of a firm over a period of time is called the:

Income Statement

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?

-$1,235

During the past year, Yard Services paid $36,800 in interest along with $2,000 in dividends. The company issued $3,000 of stock and $16,000 of new debt. The company reduced the balance due on its old debt by $18,400. What is the amount of the cash flow to creditors?

$39,200

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?

$69,800

For the year, Movers United has net income of $31,800, net new equity of $7,500, and an addition to retained earnings of $24,200. What is the amount of the dividends paid?

$7,600

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?

$71,600

The corporate tax structure in the U.S. is based on a:

modified flat-rate tax

Net income increases when:

revenue increases.

The matching principle states that:

the costs of producing an item should be recorded when the sale of that item is recorded as revenue.

Shareholders' equity is best defined as:

the residual value of a firm

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?

$29,400

Donut Delite has total assets of $31,300, long-term debt of $8,600, net fixed assets of $19,300, and owners' equity of $21,100. What is the value of the net working capital?

$10,400

Rusty Antiques has a marginal tax rate of 39percent and an average tax rate of 26.9 percent. If the firm owes $37,265 in taxes, how much taxable income did it earn?

$138,532

AV Sales has net revenue of $513,000 and costs of $406,800. The depreciation expense is $43,800,interest paid is $11,200, and dividends for the year are$4,500. The tax rate is 33 percent. What is the addition to retained earnings?

$29,804

Pier Imports has cash of $41,100 and accounts receivable of $54,200, all of which is expected to be collected. The inventory cost $82,300 and can be sold today for $116,500. The fixed assets were purchased at a total cost of $234,500 of which $118,900 has been depreciated. The fixed assets can be sold today for $138,000. What is the total book value of the firm's assets?

$293,200

Leslie Printing has net income of $26,310 for the year. At the beginning of the year, the firm had common stock of $55,000, paid-in surplus of $11,200, and retained earnings of $48,420. At the end of the year, the firm had total equity of $142,430. The firm paid dividends of $32,500. What is the amount of the net new equity raised during the year?

$34,000

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?

$34,645

The Green Carpet has current liabilities of $72,100 and accounts receivable of $107,800. The firm has total assets of $443,500 and net fixed assets of $323,700. The owners' equity has a book value of $191,400. What is the amount of the net working capital?

$47,700

The Plaza Cafe has an operating cash flow of $83,770, depreciation expense of $43,514, and taxes paid of $21,590. A partial listing of its balance sheet accounts is as follows: Beg. Current Assets- $138,590 End. Current Assets- $129,204 Beg. Net Fixed Assets- $599,608 End. Net Fixed Assets- $597,913 Beg. Current Liabilities- $143,215 End. Current Liabilities- $139,827 Beg. Long-term Debt- $408,660 End. Long-term Debt- $402,120

$47,949

Donner 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?

$5,400

Holly 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 28 percent. How much net income did the firm earn for the period?

$9,324

The Pretzel Factory has net sales of $821,300 and costs of $698,500. The depreciation expense is $28,400 and the interest paid is $8,400. What is the amount of the firm's operating cash flow if the tax rate is 34 percent?

$93,560

The balance sheet of Binger, Inc. has the following balances: Beg. Cash - $30,300 End. Cash-$32,800 Beg. AR-$48,200 End. AR-$51,600 Beg. Inv.- $126,500 End. Inv.- $129,200 Beg. Net Fixed Assets- $611,900 End. Net Fixed Assets- $574,300 Beg. AP- $43,200 End. AP- $53,600 Beg. Long-term debt- $415,000 End. Long-term debt- $304,200 What is the amount of the change in net working capital?

-$1,800

For the past year, LP Gas, Inc., had cash flow from assets of $38,100 of which $21,500 flowed to the firm's stockholders. The interest paid was $2,300. What is the amount of the net new borrowing?

-$14,300

Red's Tractors owes $52,311 in taxes on a taxable income of $608,606. The company has determined that it will owe $56,211 in tax if its taxable income rises to $620,424. What is the marginal tax rate at this level of income?

33 percent

What is the maximum average tax rate for corporations?

35 percent

Which one of the following has nearly the same meaning as free cash flow?

Cash flow from assets

Which one of the following is an intangible fixed asset?

Copyright

An increase in which one of the following will increase operating cash flow for a profitable, tax-paying firm?

Depreciation

The tax rate that determines the amount of tax that will be due on the next dollar of taxable income earned is called the:

Marginal tax rate

The market value of a firm's fixed assets:

is equal to the estimated current cash value of those assets.

Highly liquid assets:

can be sold quickly at close to full value.

Over the past year, a firm decreased its current assets and increased its current liabilities. As a result, the firm's net working capital:

had to decrease