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The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $415,000; Net sales were $1,100,000; Interest expense was $71,000; Loss from sale of investments was $87,000; Income tax expense was $58,000. What was Willie's nonoperating income (expense) ?


A) ($71,000) .
B) ($158,000) .
C) $216,000.
D) $257,000.

E) None of the above
F) A) and B)

Correct Answer

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Harley Company has provided the following selected financial information. Harley Company has provided the following selected financial information. What is Harley's 2016 return on assets (rounded) ? A) 12.5% B) 13.2% C) 16.0% D) 25.0% What is Harley's 2016 return on assets (rounded) ?


A) 12.5%
B) 13.2%
C) 16.0%
D) 25.0%

E) B) and C)
F) A) and D)

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Which of the following best describes operating income?


A) It includes the results of discontinued operations.
B) It is before operating expenses.
C) It is sales minus cost of goods sold and income tax expense.
D) It is net sales minus cost of goods sold and operating expenses.

E) None of the above
F) C) and D)

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Which of the following would not be reported in the operating activities section of the statement of cash flows, which has been prepared using the indirect method?


A) Sales on account which have not yet been collected.
B) Net income.
C) Cash paid for income taxes.
D) Depreciation expense.

E) None of the above
F) A) and B)

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Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements?


A) Income from operations and current assets both increase.
B) Operating income and gross profit both increase.
C) Net income and earnings per share both increase.
D) Current assets do not change and stockholders' equity increases.

E) B) and C)
F) C) and D)

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Information disclosed in a balance sheet about shares of common stock includes the number of shares that are:


A) Authorized and Issued.
B) Issued and Outstanding.
C) Authorized, Issued, and Outstanding.
D) Authorized, Issued, Outstanding, and Not Outstanding.

E) C) and D)
F) A) and D)

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Which of the following statements is false when a company sells inventory costing $900 for $1,500 cash?


A) Current assets increase $600.
B) Gross profit increases $1,500.
C) Stockholders' equity increases $600.
D) Net sales increases $1,500.

E) All of the above
F) None of the above

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On January 1, 2016 Gucci Brothers Inc. had a $500,000 credit balance in retained earnings and $600,000 balance in common stock. During 2016, the company earned net income of $100,000, declared a dividend of $15,000, and issued additional stock for $25,000. What is total stockholders' equity on December 31, 2016?


A) $1,100,000.
B) $1,210,000.
C) $1,225,000.
D) $1,240,000.

E) B) and C)
F) A) and B)

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Which of the following statements regarding international financial reporting standards (IFRS) is false?


A) Research and development costs are expensed.
B) Research costs are expensed and development costs are capitalized.
C) Cash payments for interest are reported on the cash flow statement as either an operating or financing cash flow.
D) Reversal of inventory write-downs is permitteD.Development costs are capitalized under IFRS.

E) C) and D)
F) B) and D)

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The primary responsibility for the information in a corporation's financial statements lies with the chief executive officer (CEO) and the chief financial officer (CFO).

A) True
B) False

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In which of the following classifications would cash dividend payments to stockholders be reported in the statement of cash flows?


A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Stockholder activities.

E) B) and D)
F) A) and B)

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Marino Company has provided the following information: Net sales, $480,000 Net income, $24,000 Average total assets, $200,000 What is Marino's total asset turnover?


A) 12.0
B) 8.33
C) 0.42
D) 2.4

E) A) and B)
F) None of the above

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Sales by major product category is a required financial statement disclosure.

A) True
B) False

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The Callie Company has provided the following information: Operating expenses were $231,000; Cost of goods sold was $376,000; Net sales were $940,000; Interest expense was $32,000; Gain on sale of a building was $76,000; Income tax expense was $151,000. What was Callie's gross profit?


A) $564,000.
B) $188,000.
C) $333,000.
D) $232,000.

E) A) and C)
F) B) and D)

Correct Answer

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Brimmel Corp. has provided the following information: Sales were $780,000; Cost of goods sold was $429,000; Net income was $195,000. What was Brimmel's gross profit percentage?


A) 55%
B) 45%
C) 62%
D) 222%

E) B) and C)
F) All of the above

Correct Answer

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Which of the following statements regarding international financial reporting standards (IFRS) is false?


A) Common stock is titled as share capital.
B) Property, plant, and equipment can be reported on the balance sheet at either fair value or historical cost.
C) The last-in first-out (LIFO) inventory method is permitted.
D) Development costs are capitalizeD.The last-in first-out inventory (LIFO) method is prohibited under IFRS.

E) None of the above
F) A) and D)

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Independent auditors are advisors who analyze financial statements and other economic information to formulate forecasts and stock recommendations.

A) True
B) False

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Harley Company has provided the following selected financial information. Harley Company has provided the following selected financial information. What is Harley's 2016 total asset turnover (rounded) ? A) 2.38 B) 2.25 C) 0.132 D) 2.65 What is Harley's 2016 total asset turnover (rounded) ?


A) 2.38
B) 2.25
C) 0.132
D) 2.65

E) A) and D)
F) A) and C)

Correct Answer

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The Willie Company has provided the following information: Operating expenses were $345,000; Income from operations was $415,000; Net sales were $1,100,000; Interest expense was $71,000; Loss from sale of investments was $87,000; Income tax expense was $58,000. What was Willie's income before taxes?


A) $344,000.
B) $199,000.
C) $257,000.
D) $286,000.

E) B) and D)
F) C) and D)

Correct Answer

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Which of the following statements regarding earnings per share is false?


A) It is reported on the income statement.
B) It increases when net income increases.
C) It is calculated using the average number of common shares outstanding during the period.
D) It would not be affected by additional shares of common stock issued during the year.

E) B) and C)
F) B) and D)

Correct Answer

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