Alexender

Alexander Industries, in Chicago, plans to take advantage of the winds blowing in from Lake Michigan. Alexander is developing a project to install a wind turbine that would generate electricity and reduce energy costs. The turbine would have an initial cost of $500,000 and would provide a net cost savings of $57,000 per year. The turbine will have a life of 25 years. What is the payback period, in years, for the wind turbine?
A. 8.77 years
B. 9.08 years
C. 25 years
D. 28.75 years
A company’s inventory account increased $26,500 and its accounts payable account decreased $18,250 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $789,500 and cost of goods sold was $532,700. What was the amount of payments to suppliers of inventory?
A. $550,950
B. $577,450
C. $540,950
D. $834,250
A company reported the following amounts of net income:
Year 1 $120,960
Year 2 $151,200
Year 3 $187,488
Which of the following is the percentage change from Year 2 to Year 3?
A. 24.00%
B. 55.00%
C. 124.00%
D. 25.00%
Question 9 of 20
A company uses the indirect method to prepare the statement of cash flows. It presents the following amounts on its financial statements.
End of this year End of prior year
Accounts receivable $105,000 $100,000
Cost of goods sold 550,000
Sales revenue 850,000
Accounts payable* 75,000 65,000
Inventory 85,000 106,000
Salary payable 15,000 11,000
Salary expense 50,000 42,000
*Relates solely to the acquisition of inventory.
What will appear in the operating activities section related to inventory?
A. The decrease of $21,000 will be subtracted from net income.
B. The decrease of $21,000 will be subtracted from cost of goods sold.
C. The decrease of $21,000 will be added to net income.
D. The decrease of $21,000 will be added to cost of goods sold.
Question 11 of 20
The following information relates to Woolf Unlimited for the past two years.
Account Current year Prior year
Net sales (all credit) $237,250 $180,000
Cost of goods sold $115,000 $110,000
Gross profit $122,250 $ 70,000
Income from operations $ 32,000 $ 30,000
Interest expense $ 2,000 $ 7,000
Net income $ 24,000 $ 18,000
Cash $ 22,000 $ 14,000
Accounts receivable, net $ 25,000 $ 31,000
Inventory $ 56,000 $ 44,000
Prepaid expenses $ 2,000 $ 1,000
Total current assets $105,000 $ 90,000
Total long-term assets $150,000 $175,000
Total current liabilities $ 60,000 $ 90,000
Total long-term liabilities $ 22,000 $ 78,000
Common stock, no par, 2,500 shares, market value $96 per share $ 40,000 $ 40,000
Retained earnings $133,000 $ 57,000
What is the inventory turnover for the current year?
A. 2.30 times
B. 0.78 times
C. 13.00 times
D. 2.20 times
Question 12 of 20
The following information relates to Woolf Unlimited for the past two years.
Account Current year Prior year
Net sales (all credit) $237,250 $180,000
Cost of goods sold $115,000 $110,000
Gross profit $122,250 $ 70,000
Income from operations $ 32,000 $ 30,000
Interest expense $ 2,000 $ 7,000
Net income $ 24,000 $ 18,000
Cash $ 22,000 $ 14,000
Accounts receivable, net $ 25,000 $ 31,000
Inventory $ 56,000 $ 44,000
Prepaid expenses $ 2,000 $ 1,000
Total current assets $105,000 $ 90,000
Total long-term assets $150,000 $175,000
Total current liabilities $ 60,000 $ 90,000
Total long-term liabilities $ 22,000 $ 78,000
Common stock, no par, 2,500 shares, market value $96 per share $ 40,000 $ 40,000
Retained earnings $133,000 $ 57,000
What is the acid-test ratio for the current year?
A. 0.52
B. 0.75
C. 0.78
D. 2.30
Question 15 of 20
The following data relate to Sorrentino Corporation for last year:
Operating income $250,000
Net increase in all current assets except cash $45,000
Net decrease in current liabilities $30,000
Gain on sale of investments $8,000
Cash dividends paid on common stock $35,000
Depreciation expense $10,000
What is the net cash provided by operating activities for last year on the statement of cash flows for Sorrentino Corporation?
A. $130,000
B. $142,000
C. $173,000
D. $177,000
Question 18 of 20
The Nichols Corporation data for the current year:
Account Current year Prior year
Current assets $75,600 $60,000
A/R $59,400 $44,000
Mdse. Inventory $51,200 $40,000
Current liabilities $71,500 $55,000
Long-term liabilities $36,000 $30,000
Common stock (5,000 shares) $47,460 $42,000
Retained earnings $31,240 $17,000
Net sales revenue $607,700 $515,000
COGS $469,700 $385,000
Gross Profit $138,000 $130,000
Selling/General expenses $49,080 $52,000
Net income before taxes $88,920 $78,000
Income tax expense $20,520 $18,000
Net Income $68,400 $60,000
What would a horizontal analysis report with respect to long-term liabilities?
A. Long-term liabilities increased by $6,000.
B. Long-term liabilities decreased by 5.92%.
C. Long-term liabilities increased by 6.21%.
D. Long-term liabilities decreased by $1,500.
Question 20 of 20
A company reported the following amounts of net income:
Year 1 $15,000
Year 2 $21,000
Year 3 $31,500
Which of the following is the percentage change from Year 2 to Year 3?
A. 40.00%
B. 50.00%
C. 110.00%
D. 150.00%
The Jones Corporation uses a process system. During the current period, 2,500 units were started and 1,100 units were completed and transferred out. Ending units were 60% complete for materials and 45% complete for conversion costs. Direct materials costs added were $35,405 and conversion costs added were $32,870. There was no beginning WIP inventory and conversion costs are added evenly throughout the process. At the end of the period, what are the total equivalent units for conversion costs?
A. 1,940
B. 1,400
C. 1,100
D. 1,730
Sugartown Corporation has total sales revenues of $930,000. If its total fixed costs are $182,000 and its total variable costs are $267,000, then the total contribution margin is:
A. total revenue minus total fixed costs.
B. total revenue minus total variable costs.
C. total variable costs minus total fixed costs.
D. equal to operating income.
A company manufactures mirrors. Last month’s costs were as follows.
Direct materials $90,000
Direct labor 144,000
Manufacturing overhead 158,000
What were the conversion costs for the month?
A. $302,000
B. $392,000
C. $234,000
D. $90,000
The representation for fixed cost per unit of activity is:
A. vx divided by v.
B. vx divided by y.
C. y divided by x.
D. f divided by x.
Question 10 of 20
The following information is provided by Adametz Company.
WIP inventory, January 1 0 units
Units started 7,500
Units completed and transferred out 3,300
WIP inventory, December 31 4,200
Direct materials $15,500
Direct labor $18,400
Manufacturing overhead $9,000
The units in ending WIP inventory were 90% complete for materials and 50% complete for conversion costs. At the end of the year, what are the equivalent units for conversion costs?
A. 3,750
B. 3,300
C. 5,400
D. 2,100
Total fixed costs for Purple Figs Company are $52,000. Total costs, both fixed and variable, are $160,000 if 80,000 units are produced. The fixed cost per unit at 80,000 units would be:
A. $1.35/unit.
B. $0.65/unit.
C. $2.00/unit.
D. $2.65/unit.
At Hodgson Corporation, direct materials are added at the beginning of the process, and conversion costs are uniformly applied. Other details include the following.
Beginning WIP direct materials $32,000
Beginning WIP conversion costs $20,250
Costs of materials added $384,100
Costs of conversion added $271,125
WIP beginning (50% for conversion) 19,200 units
Units started 119,500 units
Units completed and transferred out 115,700 units
WIP ending (60% for conversion) 23,000 units
What are the total equivalent units for conversion costs?
A. 127,200
B. 125,300
C. 129,500
D. 138,700
 
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