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Quizzer 1 - Fin-WPS Office

The document contains 9 questions regarding financial statement analysis. Question 1 provides details on the income statement of Grand Manufacturing Co. for 1990. Question 2 asks about the percentage increase in net income needed for MPX Corporation to offset a decline from 1995 to 1996. Question 3 asks about the maximum additional amount a company can borrow given its current debt and equity levels and a required debt-to-equity rate.

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931 views3 pages

Quizzer 1 - Fin-WPS Office

The document contains 9 questions regarding financial statement analysis. Question 1 provides details on the income statement of Grand Manufacturing Co. for 1990. Question 2 asks about the percentage increase in net income needed for MPX Corporation to offset a decline from 1995 to 1996. Question 3 asks about the maximum additional amount a company can borrow given its current debt and equity levels and a required debt-to-equity rate.

Uploaded by

marie joy ortiz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Quizzer 1 - Financial Statement Analysis

1. The net sales of Grand Manufacturing Co. in 1990 is total, P580,600. The cost of goods manufactured
is P480,000. The beginning inventories of goods in process and finished goods are P82,000 and P65,000,
respectively. The ending inventories are, goods in process, P75,000, finished goods, P55,000. The
selling expenses is 5%, general and administrative expenses 2.5% of cost of sales, respectively. The net
profit in the year 1990 is

2.In 19x5, MPX Corporation’s net income was P800,000 and in 19x6 it was P200,000. What percentage
increase in net income must MPX achieve in 19x7 to offset the 19x6 decline in net income?

3.Barr Co. has total debt of $420,000 and shareholders’ equity of $700,000. Barr is seeking capital to
fund an expansion. Barr is planning to issue an additional $300,000 in common stock, and is negotiating
with a bank to borrow additional funds. The bank is requiring a debt-to-equity rate of 0.75. What is the
maximum additional amount Barr will be able to borrow?

4. Perry Technologies Inc. had the following financial information for the past year:

Sales $860,000

Inventory turnover 8x

Quick ratio 1.5

Current ratio 1.75

What were Perry’s current liabilities?


5. A service company's working capital at the beginning of January of the current year was $70,000. The
following transactions occurred during January:

Performed services on account $30,000

Purchased supplies on account 5,000

Consumed supplies 4,000

Purchased office equipment for cash 2,000

Paid short-term bank loan 6,500

Paid salaries 10,000

Accrued salaries 3,500

What is the amount of working capital at the end of January?

6. The working capital of Regalado Co. is P600,000 and its current ratio is 3 to 1. The amount of current
assets is

7. Blasso Co.’s net accounts receivable were $500,000 at December 31, 2000 and $600,000 at December
31, 2001. Net cash sales for 2001 were $200,000. The accounts receivable turnover for 2001 was 5.0.
What were Blasso’s total net sales for 2001?
8. During 1989, Rand Co. purchased $960,000 of inventory. The cost of goods sold for 1989 was
$900,000, and the ending inventory at December 31, 1989 was $180,000. What was the inventory
turnover for 1989?

9. Last year's asset turnover ratio for Wuerffel Airlines was 2.5. This year, sales increased by 20% and
average total assets increased by 10%. What is the new asset turnover ratio?

Instructions: Please show your solutions and email your answers to my FB PAGE:
https://www.facebook.com/sirtristanjun

Deadline is on May 11, 2020

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