Homework Sourse1 Data from the financial statements of Dils Brothers Co and
1. Data from the financial statements of Dils Brothers Co. and J. Cox, Inc. are presented below (in millions):
Dils Brothers Co.
J. Cox, Inc.
Total liabilities, 2016
$70,914
$47,422
Total liabilities, 2015
72,208
60,092
Total assets, 2016
100,372
73,744
Total assets, 2015
94,114
70,416
Revenue, 2016
306,932
163,040
Net income, 2016
280
1,572
To the nearest hundredth, what is the 2016 debt-to-total assets ratio for Dils Brothers Co.?
Select one:
A. 44.16
B. 3.78
C. 0.26
D. 0.71
2.
An economic event that requires accounting recognition defines:
Select one:
A. The cost principle
B. An asset
C. An accounting transaction
D. An income statement
3.
Which of the following statements is true regarding generally accepted accounting principles (GAAP)?
Select one:
A. U.S. GAAP is the same as GAAP in other countries.
B. GAAP is subject to change as conditions warrant.
C. Under GAAP, if two companies engage in the same transactions, they must choose the same accounting methods.
D. GAAP is a set of laws.
4.
Wonderland Company purchased equipment with a cost of $190,000, with an estimated residual value of $10,000, and an estimated life of 15 years. After 5 full years of recording depreciation by the straight-line method, it was determined that due to obsolescence, the equipment’s useful life should be reduced by 5 years and the residual value changed to zero.
The depreciation expense for Year 6 is:
Select one:
A. $22,000
B. $26,000
C. $11,000
D. $20,000
5.
Data on the physical inventory for Ace Company as of December 31, 2016 are given below:
Inventory Items
Quantity on hand
Unit Cost
Unit Market Value
Appliances:
Refrigerators
12
$2,000
$1,800
Dishwashers
18
$1,200
$1,100
Ovens
15
$1,000
$1,200
Electronics:
Stereos
20
$1,400
$1,500
Televisions
25
$1,800
$1,704
Assuming Ace Company applies the LCM method on the inventory by major category of items, the inventory balance reported on the Balance Sheet as of December 31, 2016 will be:
Select one:
A. $132,000
B. $133,600
C. $133,200
D. $132,400
6.
M. Fields, Inc. wishes to accumulate $1,200,000 to be used to pay off a balloon note at the end of 4 years.
How much will M. Fields invest today to accumulate the desired amount if the investment earns an annual rate of 12% compounded quarterly? (Select the closest amount.)
Select one:
A. $747,804
B. $130,496
C. $508,416
D. $704,000
7.
Blue Moon Company purchased a machine on January 1, 2016 for $120,000, with a 5-year life, and a $12,000 residual life.
Compute the book value of the machine on December 31, 2018 if the company uses the double-declining balance method of depreciation.
Select one:
A. $25,920
B. $21,600
C. $48,000
D. $20,000
| Dils Brothers Co. | J. Cox, Inc. | |
| Total liabilities, 2016 | $70,914 | $47,422 |
| Total liabilities, 2015 | 72,208 | 60,092 |
| Total assets, 2016 | 100,372 | 73,744 |
| Total assets, 2015 | 94,114 | 70,416 |
| Revenue, 2016 | 306,932 | 163,040 |
| Net income, 2016 | 280 | 1,572 |
Solution
1.Debts to total asset ratio= total liabilities/total assests
It is for dils brother co. for 2016=70914/100372=0.71
Answer: D
2 . Answer :C
3.Answer:A
4. Depreciation by straight line method=cost price-residual valu
Estimated life
=190000-10000/15= 12000
Depreciation for first 5 years=12000x5=60000
Remaining value after 5 years=190000-60000=130000
New estimated useful life 5 years with no residual value
Depreciation for remaining period will be+cost/estimated life
=130000/5=$26000
Thus answer: B
5.Answer:A
Working:
APPLIANCES COST MARKET PRICE
REFRIGERATOR 24000 21600
DISHWASHERS 21600 19800
OVENS 15000 18008
------- -------
60600 59400
-------- -------
ELECTRONICS
Stereos 28000 30000
Televisions 45000 72600
--------- --------
73000 72600
--------- ---------
ANSWER: 59400+72600=132000
7.depreciation(slm)= cost/estimated life=120000/5=25000
Depreciation rate=24000/120000x100=20%
In double declining method residual value is not considered
Now rate as per declining method will be double of slm I,e,,40%
Answer will be A(25920)
