The average number of times a company's inventory is sold during an accounting period, calculated by dividing cost of goods sold by the average inventory balance is equal to the:

a)            Price earnings ratio

b)            Accounts receivable turnover

c)            Current ratio

d)            Days' sales uncollected

e)            Inventory turnover

12. One of several ratios that reflects solvency includes the:

a)            Days' sales in inventory

b)            Acid-test ratio

c)            Current ratio

d)            Total asset turnover

e)            Times interest earned ratio

13.  A company has a profit margin of 12%. If net income is equal to $450,000 and average total asset is equal to $600,500, how much are sales?

a)            $3,750,000

b)            $72,060

c)            $126,060

d)            $1,050,500

e)            $54,000

14. A company had a return on common stockholders' equity of 22%. Net income equaled $600,000 and average common stockholders' equity equaled $2,500,000. Compute the amount of the preferred dividends declared.

a)            $132,000

b)            $550,000

c)            $50,000

d)            $10,000

e)            $10,763,636

15. A company had a return on common stockholders' equity of 25%. Net income equaled $200,000 and average common stockholders' equity equaled $700,000. Compute the amount of the preferred dividends declared.

a)            $500,000

b)            $25,000

c)            $50,000

d)            $200,000

e)            $175,000

16. Corona Company's balance sheet accounts follow:

                                At December 31                                               2011                       2010                       1009

                Cash                                                                $ 25,868                  $ 31,163              $ 31,182                  

                Accounts receivable                                     78,134                      53,995                   41,152

                Merchandise inventory                          951,250                      73,491                   46,095

                Prepaid expense                                           8,330                          8,099                     3,429

                Plant assets, net                                        241,854                    218,932                 199,542

                Total assets                                           $ 449,206                     $385,680          $ 321,400

                Liabilities and equity

                Accounts payable                                $ 108,058                   $ 67,135                $42,849

                Long – term notes payable secured by

What is Corona Company's days' sales uncollected ratio for 2011 assuming net sales and gross profit for the period were $1,236,783, $927,587 respectively?

a)            24.58

b)            22.17

c)            25.20

d)            20.99

e)            23.03

17. Simple Simon's balance sheet and income statement accounts follow:

                At December 31                                               2011                       2010                       1009

                Cash                                                                $ 30,872                  $ 36,086              $  37974                  

                Accounts receivable                                     89,476                      63,151                   50,632

                Merchandise inventory                          112,499                      83,450                   54,467

                Prepaid expense                                           9,942                          9,473                     4,219

                Plant assets, net                                        291,143                    268,126                 244,108

                Total assets                                           $    533,932                  $ 46,026              $ 391,400

                Liabilities and equity

                Accounts payable                                $ 130,290                   $ 76,233                $50,632

                Long – term notes payable secured by

                mortgages on plant assets               $ 98,372                  $ 103,748               $50,632

                Common stock, $10 par value           142,500                      132,500              102,500

                Retained earnings                                 182,770                  147,805              130,499                                           

                Total liabilities and equity                 $533,932                 $ 460,286             $ 391,400

                For the Year Ended December 31,            2011                                       2010

Sales                                                                                      $694,112                              $547,740

Cost of goods sold                           $423,408                                     $ 356,031

Other expense                                   215,175                                         138,578     

Interest expense                                11,800                                            12,598

Income taxes                                     9,023                                                     8,216

Total costs and expense                                               659,406                                 515,423                

Net income                                                              $ 34,706                                          $32,317

Earning par share                                                     $2.14                                                $1.99                 

What is Simple Simon's gross margin ratio for 2010?

a)            39%

b)            33%

c)            67%

d)            65%

e)            35%

18. A company has sales of $2,458,422, a gross profit ratio of 23%, a days' sales in inventory ratio of 12.4, and total current assets of $539,600. What is the ending inventory for the year?

a)            $46,013

b)            $64,310

c)            $55,951

d)            $61,715

e)            $58,000

19.  A company has total assets of $5,600,482, common stock of 2,111,111, retained earnings of $1,058,473. What is the company's equity ratio?

a)            54.22%

b)            65.00%

c)            56.59%

d)            43.41%

e)            41.57%

20. Financial reporting refers to

a)            The communication of relevant financial information to decision maker

b)            Profitability

c)            Ratio analysis

d)            Financial statements only

e)            The application of analytical tools to general-purpose financial statements