Question 51 Moulding Company’s net income was $13,820,000 with 2,600,000 shares outstanding. The average share price for the year was $58.00. Moulding had 10,000 options to purchase 10 shares each at $40 per share outstanding the entire year. Moulding Company’s diluted earnings per share are closest to: A) $5.32. B) $5.25. C) $3.84. D) $3.71. The correct answer was B) $5.25. Moulding’s basic EPS (net income / weighted average common shares outstanding) was $13,820,000 / 2,600,000 = $5.32. Using the treasury stock method to compute diluted EPS, if the options were exercised, cash inflow would be 10,000 × 10 × $40 = $4,000,000. Based on the average share price of $58.00, the number of Moulding shares that can be purchased with the cash flow is $4,000,000 / $58 = 68,966. The number of shares that would have been created is 100,000 – 68,966 = 31,034. Diluted EPS was $13,820,000 / (2,600,000 + 31,034) = $5.25. This question tested from Session 8, Reading 32, LOS i Question 52 Mark Industries' income statement and related notes for the year ended December 31 are as follows (in $): Sales | 42,000,000 | Cost of Goods Sold | (32,000,000) | Wages Expense | (1,500,000) | Depreciation Expense | (2,500,000) | Interest Expense | (1,000,000) | Income Tax Expense | (2,000,000) | Net Income | 3,000,000 |
During the year: ♣ Wages Payable increased $100,000. ♣ Accumulated Depreciation increased $2,500,000. ♣ Interest Payable decreased $200,000. ♣ Income Taxes Payable increased $500,000. ♣ Dividends of $100,000 were declared and paid.
Mark Industries’ cash flow from operations (CFO) for the year ended December 31 was: A) $5,900,000. B) $4,800,000. C) $4,500,000. D) $4,400,000. Question 53 Income Statements for Royal, Inc. for the years ended December 31, 20X0 and December 31, 20X1 were as follows (in $ millions): | 20X0
| 20X1 | Sales | 78 | 82 | Cost of Goods Sold | (47) | (48) | Gross Profit | 31 | 34 | Sales and Administration | (13) | (14) | Operating Profit (EBIT) | 18 | 20 | Interest Expense | (6) | (10) | Earnings Before Taxes | 12 | 10 | Income Taxes | (5) | (4) | Earnings after Taxes | 7 | 6 |
Analysis of these statements for trends in operating profitability reveals that, with respect to Royal’s gross profit margin and net profit margin: A) both gross profit margin and net profit margin increased in 20X1. B) gross profit margin decreased but net profit margin increased in 20X1. C) gross profit margin increased in 20X1 but net profit margin decreased. D) both gross profit margin and net profit margin decreased in 20X1.
Question 54 A firm’s balance sheet consists of marketable securities, receivables and inventory, among other assets. Of the following ratios for this firm, which is a liquidity ratio that will likely have the lowest value? A) Current ratio. B) Quick ratio. C) Debt-to-equity ratio. D) Cash ratio.
Question 55 When a used delivery truck is sold, the gain or loss on disposal is most accurately stated as: A) fair market value – book value. B) selling price – accumulated depreciation. C) selling price – original cost + accumulated depreciation. D) selling price – original cost – accumulated depreciation. | 
发表于 2008-11-6 18:00
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