QUESTION: 1733

A firm's quick ratio equals 1.31 and its cash ratio equals 1.19. If the firm has receivables of 693, its current liabilities equal ________.

8,129
4,693
5,775
7,926

Answer(s): C

Explanation:

The definitions of the two ratios are:
Quick ratio = (cash + marketable securities +receivables)/current liabilities Cash ratio = (cash + marketable securities)/current liabilities Thus, (Quick ratio - Cash ratio) = receivables/current liabilities.
Therefore, 1.31 - 1.19 = 0.12 = 693/current liabilities. Solving, we get current liabilities = 693/0.12 = 5,775.

Reveal Solution Next Question

QUESTION: 1734

The following information is from the financial statements of Complex Capitalists for 1997 and 1998:

Dec. 31, 1997 - 1 million common shares outstanding, capital structure all-equity March 31, 1998 - issued 200,000 common shares.
May 31, 1998 - issued 800,000 warrants exercisable at a strike of 35.

The stock price on Dec. 31, 1998 was 37. The average price during 1998 was 34 and the maximum price was
39. How many shares will the basic EPS computation for 1998 use?

2.0 million
1.15 million
1.2 million
1.617 million

Answer(s): B

Explanation:

Basic EPS will ignore the warrants and calculate the weighted number of common stock outstanding for 1998.
The newly issued share were outstanding for 9 months and hence weighted # of shares used = 1 million + 3/4*200,000 = 1.15 million.

Reveal Solution Next Question

QUESTION: 1735

Miller Mining, a calendar-year corporation, purchased the rights to a copper mine on July 1, 1996. Of the total purchase price, $2,800,000 was appropriately allocated to the copper. Estimated reserves were 800,000 tons of copper. Miller expects to extract and sell 10,000 tons of copper per month. Production began immediately. The selling price is $25 per ton. Miller uses percentage depletion (15%) for tax purposes. To aid production, Miller also purchased some new equipment on July 1, 1996. The equipment cost $76,000 and had an estimated useful life of 8 years. After all the copper is removed from the mine, however, the equipment will be of no use to Miller and will be sold for an estimated $4,000. If sales and production conform to expectations, what is Miller's depletion expense on this mine for financial accounting purposes for the calendar year 1996?

$420,000
$215,400
$105,000
$210,000
$430,800

Answer(s): D

Explanation:

Depletion expense is based on the units-of-production method. Based on the estimates, the depletion charge per ton is $3.50 ($2,800,000 / 800,000 tons). Since 10,000 tons are extracted per month and there are 6 months of operations for 1996, the depletion expense is $210,000 ($3.50 per ton X 10,000 tons X 6 months).

Reveal Solution Next Question

QUESTION: 1736

In preparing its cash flow statement for the year ended December 31, 1998, Roman Co. collected the following data:

Gain on sale of equipment $6,000
Proceeds from sale of equipment 10,000
Purchase of A.S. Inc. bonds (par value $200,000)180,000
Amortization of bond discount2,000
Dividends declared 45,000
Dividends paid 38,000
Proceeds from sale of treasury stock
(carrying amount of $65,000)75,000

In its December 31, 1998 statement of cash flows, what amount should Roman report as net cash used in investing activities?

$194,000
$188,000
$170,000
$174,000
$176,000

Answer(s): C

Explanation:

Investing activities include the acquisition and disposal of all long-term assets. Thus, the proceeds from sale of equipment of $10,000 and purchase of bonds of $180,000 result in a net use of cash of $170,000 from investing ($10,000-180,000).

Reveal Solution Next Question

Free CFA-Level-I Exam Braindumps (page: 434)

QUESTION: 1733

Explanation:

QUESTION: 1734

Explanation:

QUESTION: 1735

Explanation:

QUESTION: 1736

Explanation: