Midterm Exam Problem Submissions: 420, 000andshareholder Equityof S

7/27/2021 Instructions - CODE 033 - Financial Management (TEAM NETFLIX) - Midterm Exam Problem -
CODE 033 - Financial Management (TEAM NETFLIX)

MIDTERM EXAMS
Midterm Exam Problem

Submissions
Here are your latest answers:
Item 1
Nutella Co. has total debt of 420, 000andshareholders′ equityof 700,000. Nutella is seeking capital to fund an expansion. Nutella is planning to issue an additional
$300,000 in common stock, and is negotiating with a bank to borrow additional funds. The bank is requiring a debt-to-equity rate of 0.75. What is the maximum additional
amount Nutella will be able to borrow?
Response: $330,000
Correct answer: $330,000
Score:
2 out of 2
Yes
Item 2
In 2015, MPX Corporation’s net income was P800,000 and in 2016 it was P200,000. What percentage increase in net income must MPX achieve in 2017 to offset the 2017
decline in net income?
Response: 300%
Correct answer: 300%
Score:
1 out of 1
Yes
Item 3
Oriental Air Corporation is on its first month of operation. It had cash flows from financing activities of P1,234,000 and cash flows from investing activities of P4,567,000.
The balance in the firm's cash account was P789,000 at the beginning of the month and P1,357,000 at the end. Calculate Oriental Air's cash flow from operations for the
month.
Response: P6,369,000
Correct answer: P3,901,000
Score:
0 out of 2
No
Item 4
What would be a company’s “times interest earned ratio” if interest paid on loans amount to P9,000 and its net income after income tax is P99,000. (Assume a 25% income
tax rate on first P100,000 of income and 35% income tax rate on income in excess of P100,000.)
Response: 12 times
Correct answer: 16.21 times
Score:
0 out of 2
No
Item 5
During 2019, Rand Co. purchased 960, 000of inventory. T hecostof goodssoldf or2019was 900,000, and the ending inventory at December 31, 2019 was
$180,000. What was the inventory turnover for 2019?
Response: 6.0 times
Correct answer: 6.0 times
Score:
2 out of 2
Yes
Item 6
A fire has destroyed many of the financial records of R. Son & Co. You are assigned to put together a financial report. You have found the return on equity to be 12% and
the debt ratio was 0.40. What was the return on assets?
Response: 7.20%
Correct answer: 7.20%
https://usl-tuguegarao.neolms.com/student_quiz_assignment/submissions/13900542 1/3
Score:
2 out of 2
Yes
Item 7
Selected information from the accounting records of the Blackwood Co. is as follows:
Net A/R at December 31, 2000...................

900, 000N etA/RatDecember31, 2001.....................1, 000, 000Accountsreceivableturnover. . . . . . . . . . . . . . . . . . . . . . . . . . 5to1I nventoriesa
Inventories at December 31, 2001 ........... $1,200,000
Inventory turnover ............................................. 4 to 1
What was the gross margin for 2001?
Response: $150,000
Score:
2 out of 2
Yes
Item 8
Selected data from the year-end financial statements of Eastwood Corp. are presented below. The difference between average and ending inventories is immaterial.
Current ratio .............................................................2.0
Quick ratio ...............................................................1.5
Current liabilities ................................................P600,000
Inventory turnover (based on cost of sales) ..8 times
Gross profit margin ........................................... 40%
How much is Eastwood’s net sales for the year were
Response: P4,000,000
Correct answer: P4,000,000
Score:
2 out of 2
Yes
Item 9
Polar Glacier Company has the following information on its 2019 income statement:
Sales.......................................
68, 000C ostof GoodsS old. . . . . . . . . . . . . . . .22, 000OtherE xpenses. . . . . . . . . . . . . . . . . . . . . . . . .4, 800DepreciationE xpenses. . . . . . . . . . . .7, 5
5,600
Debt redeemed ........................ 4,200
a. What was the cash flow from operating activities?
b. What was Polar's free cash flow?
Response: $27,300
Score:
0 out of 2
No
Item 10
The average stockholders equity for ABC Company for 2020 was P2,000,000. Included in this figure is P200,000 par value of 8% preferred stock, which remained
unchanged during the year. The return on common shareholders’ equity was 12.5% during the 2020. How much was the net income of the company in 2020?
Response: P241,000
Correct answer: P241,000
Score:
2 out of 2
Yes
Item 11
The net sales of Grand Manufacturing Co. in 2019 is total, P580,600. The cost of goods manufactured is P480,000. The beginning inventories of goods in process and
finished goods are P82,000 and P65,000, respectively. The ending inventories are, goods in process, P75,000, finished goods, P55,000. The selling expenses is 5%, general
and administrative expenses 2.5% of cost of sales, respectively. The net profit in the year 2019 is
Response: P53,850
Score:
2 out of 2
Yes
Item 12
Ehrenburg Co. had net income of 5.3millionandearningspershareof commonstockof 2.50. Included in the net income was
500, 000of bondinterestexpenserelatedtoitslong − termdebt. T heincometaxratewas50 300,000. The dividend payout ratio on common stock was
40%. What were the dividends on common stock?
Response: $2,000,000
Correct answer: $2,000,000
Score:
2 out of 2
Yes
Item 13
Hanson Corporation's present year ROE remained at last year's 14% level, while the profit margin was reduced from 8% to 4% and the leverage ratio increased from 1.2 to
1.5. The effects on asset turnover were to
Response: Increase from 1.46 to 2.33.
Correct answer: Increase from 1.46 to 2.33.
Score:
2 out of 2
Yes
Item 14
A service company's working capital at the beginning of January of the current year was P70,000. The following transactions occurred during January:
Performed services on account .............................. P30,000
Purchased supplies on account ....................................5,000
Consumed supplies .........................................................4,000
Purchased office equipment for cash ......................... 2,000
Paid short-term bank loan .............................................6,500
Paid salaries ...................................................................10,000
Accrued salaries .............................................................. 3,500
What is the amount of working capital at the end of January?
Response: P80,500
Score:
2 out of 2
Yes
Item 15
Planners have determined that sales will increase by 25% next year, and that the profit margin will remain at 15% of sales. Which of the following statements is correct?
Response: Profit will grow by 25%.
Correct answer: Profit will grow by 25%.
Score:
1 out of 1
Yes
Item 16
United Pacific had 55, 000incashatyearend2018and 25,000 in cash at year-end 2019. Cash flow from long-term investing activities totaled (
250, 000)andcashf lowf romf inancingactivitiestotaled 170,000. If accruals increased by
25, 000, receivablesandinventoriesincreasedby 100,000 and depreciation and amortization totaled $10,000, What was the firm's net income(loss)?
Response: $165,000
Score:
0 out of 2
No

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7/27/2021 Instructions - CODE 033 - Financial Management (TEAM NETFLIX) - Midterm Exam Problem -

CODE 033 - Financial Management (TEAM NETFLIX)

Midterm Exam Problem

Correct answer: $330,000

Correct answer: 300%

Correct answer: P3,901,000

Correct answer: 16.21 times

Response: 6.0 times

Correct answer: 6.0 times

Correct answer: 7.20%

Net A/R at December 31, 2000...................

Inventories at December 31, 2001 ........... $1,200,000

Inventory turnover ............................................. 4 to 1

What was the gross margin for 2001?

Correct answer: $150,000

Current ratio .............................................................2.0

Quick ratio ...............................................................1.5

Current liabilities ................................................P600,000

Inventory turnover (based on cost of sales) ..8 times

Gross profit margin ........................................... 40%

How much is Eastwood’s net sales for the year were

Correct answer: P4,000,000

a. What was the cash flow from operating activities?

b. What was Polar's free cash flow?

Correct answer: $25,600

Correct answer: P241,000

Correct answer: P53,850

Correct answer: $2,000,000

Response: Increase from 1.46 to 2.33.

Correct answer: Increase from 1.46 to 2.33.

Performed services on account .............................. P30,000

Purchased supplies on account ....................................5,000

Consumed supplies .........................................................4,000

Purchased office equipment for cash ......................... 2,000

Paid short-term bank loan .............................................6,500

Paid salaries ...................................................................10,000

Accrued salaries .............................................................. 3,500

What is the amount of working capital at the end of January?

Correct answer: P80,500

Response: Profit will grow by 25%.

Correct answer: Profit will grow by 25%.

Correct answer: $115,000

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