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Exam 14: Financial Statement Analysis

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Question 31

Multiple Choice

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Which of the following would appear as an extraordinary item on the income statement?

A) loss resulting from the sale of fixed assets
B) gain resulting from the disposal of a segment of the business
C) loss from land condemned for public use
D) liquidating dividend

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

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Question 32

Multiple Choice

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If net income is $250,000 and interest expense is $30,000 for Year 2, what are the earnings per share on common stock for Year 2?

A) $4.16
B) $4.32
C) $4.02
D) $2.49

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

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Question 33

Multiple Choice

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The percentage analysis of increases and decreases in individual items in comparative financial statements is called

The relationship of each asset item as a percent of total assets is an example of vertical analysis.

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year, there has been an acceleration in the collection of receivables.

Zeus Company reports the following for the current year: *Net of any tax effect a Prepare a partial income statement for Zeus Company beginning with income from continuing operations before income tax. b Calculate the earnings per common share for Zeus, including per-share amount for unusual items.

Revenue and expense data for Bluestem Company are as follows: a Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. b Comment upon significant changes disclosed by the comparative income statement. Round percentages to one decimal place.

The following data are taken from the financial statements:

Based on the following data, what is the accounts receivable turnover?

The following data are available for Martin

A change from one acceptable accounting method to another is reported

In computing the rate earned on total assets, interest expense is subtracted from net income before dividing by average total assets.

Which of the following is the most useful in analyzing companies of different sizes?

Ratios and various other analytical measures are not a substitute for sound judgment, nor do they provide definitive guides for action.

Condensed data taken from the ledger of St.Louis Company at December 31, for the current and preceding years, are as follows: Prepare a comparative balance sheet, with horizontal analysis, for December 31, Year 2 and Year 1.Round percents to one decimal point.

Prepare an income statement using the following data for New Orleans Adventures for the year ended December 31:

A clean audit opinion is the same as a qualified audit opinion.

Income statement information for Lucy Company is provided below: Prepare a vertical analysis of the income statement for Lucy Company.

A company reports the following: Calculate the company's earnings per share on common stock.

The following information is available for Jase Company: Market price per share of common stock $25.00 Earnings per share on common stock $1.25 Which of the following statements is correct?