Quize 2

Question 1
2 out of 2 points

Art's Boutique has sales of $640,000 and costs of $480,000. Interest expense is $40,000 and depreciation is $60,000. The tax rate is 34%. What is the net income?
Answer

Selected Answer: $39,600
Correct Answer: $39,600

Response Feedback:
Taxable income = $640,000 - $480,000 - $40,000 - $60,000 = $60,000; Tax = .34($60,000) = $20,400; Net income = $60,000 - $20,400 = $39,600 Difficulty level: Medium
Ross - Chapter 02 #56
Topic: NET INCOME
Type: PROBLEMS

Question 2
2 out of 2 points

Which of the following are all components of the statement of cash flows?
Answer

Selected Answer: Cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities
Correct Answer: Cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities

Response Feedback: correct Difficulty level: Medium
Ross - Chapter 02 #50
Topic: STATEMENT OF CASH FLOWS
Type: CONCEPTS

Question 3
2 out of 2 points

Brad's Company has equipment with a book value of $500 that could be sold today at a 50% discount. Its inventory is valued at $400 and could be sold to a competitor for that amount. The firm has $50 in cash and customers owe it $300. What is the accounting value of its liquid assets?
Answer

Selected Answer: $750
Correct Answer: $750

Response Feedback:
Liquid assets = $400 + $50 + $300 = $750 Difficulty level: Medium
Ross - Chapter 02 #54
Topic: LIQUIDITY
Type: PROBLEMS

Question 4
2 out of 2 points

At the beginning of the year, a firm has current assets of $380 and current liabilities of $210. At the end of the year, the current assets are $410 and the current liabilities are $250. What is the change in net working capital?
Answer

Selected Answer: -$10
Correct Answer: -$10

Response Feedback:
Change in