Mgmt Acctg 1 Compre

ASIA PACIFIC COLLEGE OF ADVANCED STUDIES

COMPREHENSIVE EXAMINATION

MGMT ACCTG 1

MANAGEMENT ACCOUNTING

NAME:____________________________________________________________ DATE:_________________

1. Bi Corporation, which sells a single product.provided the following data from its income statements for the calendar years, 2014 and 2013

2014Sales (150,000 units)

750,000Cost of goods sold

525,000Gross profit

P225,000

2013 (Base Year)Sales (180,000 units)


575,000Gross profit

P145,000In an analysis of variation in gross profit between the two years, what would be the effect of changes in sales price an sales volume.?

Sales Price

Sales Volume

A.P 150,000 favorable

P 120,000 unfavorable

B.P 150,000 unfavorable

P 120,000 favorable

C.P 180,000 favorable

P 150,000 unfavorable

D.P 180,000 unfavorable

P 150,000 favorable

The gross profit of MJP Company for each of the years ended December 31, 2005and 2014, was as follows.

2013

2014Sales

792,000


464,000

480,000Gross profit

328,000

320,000Assuming that selling prices were 10% lower during 2006, what would be the amount of decrease in gross profit due to the change in selling price.?

A. P 8,000

C.P 79,200

B. P 72,000

D.P 88,000

1. Mel, Inc. has a practical production capacity of two million units, the current years budget was based on the production and sales of 1.4 million units during the current year. Actual statistics came out to be: production of 1.44 million units are sales of 1.2 million. Selling price is at P20 each and the contribution margin ratio is 30% the peso value that best quantifies the marketing divisions failure to chieve budgeted performance for the current year is.

A.P 4,800,000 unfavorable

C.P 1.440,000 unfavorable

B.P 4,000,000 unfavorable

D.P 1,200,000 unfavorable

2. Actual and budgeted information about the sales of a product are presented below for june.

Actual

Budget

Units

8,000

10,000

Sales revenue

P 92,000

P 105,000The sales price variance for June was. A.P 8,000 FC. P10,000 UF

B.P 10,000 FD. P10,500 UF

3. The Sales volume variance is A.P10,000FC. P11,000F

B.P10,000UD. P12,000U

4. The Sales price Variance is.A.P12,000UC. P23,000UB.P13,000UD. P13,000 F

5. The variable cost price variance isA.P11,000 UC. P23,000 UB.P12,000 UD. P13,000 U

6. The effect of the sales quantity variance on the contribution margin for November is.A.P30,000 UC. P20,000 UB.P18,000 UD. P15,000 U7. The sales price variance for November is

A. P30,000 UC. P20,000 U

B. P18,000 UD. P15,000 U8. The Variable cost flexible budget variance for November is.

A.P5,000 FB.P5,000 UC.P4,000 FD.P4,000 U

9. The fixed cost variance for November is.A.P5,000 FB.P5,000 UC.P4,000 FD.P4,000 U

10. A company is concerned about its operating performance, as summarized below

Revenues (12.50 per unit)

P300,000

Variable costs

180,000

Operating loss

(40,000)

How many additional units should have been sold in order for the company to break even in 2014?

A. 32,000

B. 24,000

C. 16,000

D. 8,000

11. For the period just ended Chanda, Inc., generated the following operating results in percetages

Sales

100%

Cost of sales

Variable

50%

Fixed 10%60% Gross profit

40%

Operating Expense

Variable 20%

Fixed

15%

35%

Operating Income

5%

Total sales amounted to P3.0 million at what level is break-even sales?

A. P3,750,000

B. P1,850,000

C. P1,875,000

D. P2,500,000

12. A company produced 500 units of a product and incurred the following costs. Direct materials, P8,000; direct labor; P10,000 overhead (20% fixed), P45,000. If the sales value of P500 unit is P102,000, what is the contribution margin percentage?

A. 44%

B. 47%

C. 53%

D. 74%

13. Given the selling price at P120 per unit; contribution margin ratio at 25% and fixed cost at P250,000, the total variable expenses at the break even point would be

A. 350,000

B. 750,000

C. P450,000

D. P250,000

15. Care Companys 2013 fixed manufacturing overhead cost totaled P100,000 and variable selling costs totaled P80,000. Under direct costing, how should these costs be classified

Period Cost

Product Cost

A. 0

P180,000

B. P 80,000

P100,000

C. P 100,000

P80,000

D. P 180,000

P 0

16. If production is greater than sales (units), then absorption costing profit will generally be

A. Greater than direct costing

B. Less than direct costing profit

C. Equal to direct costing profit

D. Additional data is needed to be able to answer

17. Which of the following statement is correct?

A. When production is higher than sales, absorption costing profit is lower than variable costing profit.

B. If all the products manufactured during the period are sold in that period, variable costing profit is equal to absorption costing profit.

C. When production is lower than sales, variable costing profit is lower than absorption costing profit.

D. When production and sales level are equal, variable costing profit is lower than absorption costing profit

18. Operating income using direct costing as compared to absorption costing would be higher

A. When the quantity of beginning inventory equals the quantity of ending inventory

B. When the quantity of beginning inventory is more than the quantity of ending inventory

C. When the quantity of beginning inventory is less than the quantity of ending inventory

D. Under no circumstances

19. Is sales equal production, one would expect profit under the variable costing method to be

A. The same as profit under the absorption costing method

B. Greater than profit under the absorption costing method

C. Differing in as much as the difference between sales and production

D. Less than profit under the absorption costing method

20. If sales exceed production, one would expect profit under the variable costing method to be

A. The same as profit under the absorption costing method

B. Greater than profit under the absorption costing method

C. Differing in as much as the difference between sales and production

D. Less than profit under the absorption costing method

21. Other things being equal , income computed by the direct costing method will exceed that compute by an absorption costing method if

A. Fixed manufacturing costs increases

B. Units sold exceed units produced.

C. Variable manufacturing costs increase

D. Units produced exceed units sold

22. For P1,000 per box, the Majestic Producers, Inc., produces and sell delicacies. Direct materials are P400 per box and direct manufacturing labor averages P75 per box. Variable overhead is P25 per box and fixed overhead is P12,500,000 per year. Administrative expenses, all fixed, run P4,500,000 per year, with sales commissions of P100 per box. Production is expected to be P100,000 boxes which is met every year. For the year just ended, 75,000 boxes were sold. What is the inventoriable cost per box using absorption costing.

A. P625

B. P500

C. P770

D. P670

23. Dotdot, Ltd, manufactures a single product for which the costs and selling prices are:

Variable production costs

P 50 / unit

Selling price

P 150 / unit

Fixed production overhead

P 200,000 / quarter

Fixed selling and administrative overhead

P 480,000 / quarter

Normal capacity is 20,000 units per quarter. Production in 1 quarter was 19,000 units and sales volume was 16,000 units. No opening no inventory for the quarter. The absorption costing profit for the quarter was:

A. P920,000

B. P950,000

C. P960,000

D. P970,000

24. The ending finished goods inventory under absorption costing method would be

A. P14,280

B. P16,968

C. P12,096

D. P16,072

25. The profit for the month under the variable costing method would be

A. P32,420

B. P25,500

C. P23,320

D. P22,420

26. The ending inventory under direct costing is

A. P25,000

B. P27,500

C. P20,000D. P32,500

27. Ending inventory under absorption costing is

A. P32,500

B. P20,000

C. P25,000

D. 27,000

28. Total variable annual cost charged to expense in direct costing

A. P110,000

B. P117,500

C. P80,000

D. P100,000

29. Total fixed cost charged against current years operations in absorption costing

A. P35,000

B. P25,000

C. P15,000

D. P43,000

30. Under variable costing, what would be the finished goods, inventory as at December 31, 2013?

A. P81,375.00

B. P60,750.00

C. P87,000.00

D. P49,218.75

31. Which costing method, variable or absorption costing, would show a higher operating income for 2013 and by how much?

A. Variable by P20,625

B. Absorption by P20,625

C. Variable by P26,250

D. Absorption P26,250

1. PTO Company desires an ending inventory of P140,000. It expects sales of P800,000 and has a beginning inventory of P130,000. Cost of sales is 65% of sales. Budgeted purchases are

A.P 530,000C.P 810,000

B.P 790,000D.P1,070,000

2. Calypso Co. has projected sales to be P600,000 in January, P750,000 in February, and P800,000 in March. Calypso wants to have 50% of next months sales needs on hand at the end of a month. If Calypso has an average gross profit of 40%, what are the February 28 purchases?

A.P465,000C.P775,000

B.P310,000D.P428,000

3. Blue Company budgeted purchases of P100,000. Cost of sales was P120,000 and the desired ending inventory was P42,000. The beginning inventory was

A.P20,000C.P42,000

B.P32,000D.P62,000

4. The payment schedule of purchases made on account is: 60% in the time period of purchase, 30% in the following time period, and 10% in the subsequent time period. Total credit purchases were P200,000 in May, and P100,000 in June. Total payments on credit purchases were P140,000 in June. What were the credit purchases in the month of April?

A.P200,000C.P145,000

B.P100,000D.P215,000

5. Lorie Company plans to sell 400,000 units of finished product in July an anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next months estimated sales. There are 300,000 finished units in the inventory on June 30. Each unit of finished product requires four pounds of direct materials at a cost of P2.50 per pound. There are 800,000 pounds of direct materials in the inventory on June 30. How many units should be produced for the three-month period ending September 30?

A.1,260,000C.1,331,440

B.1,328,000D.1,424,050

6. If the required direct materials purchases are 8,000 pounds and the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct material in pounds?

A.20,000C.12,000

B. 4,000D.32,000

7. If there were 30,000 pounds of raw material on hand on January 1, 60,000 pounds are desired for inventory at December 31, and 180,000 pounds are required for annual production, how many pounds of raw material should be purchased during the year?

A.150,000 poundsC.120,000 pounds

B.240,000 poundsD.210,000 pounds

8. Silver Bowl Company manufactures a single product. It keeps its inventory of finished goods at 75% the coming months budgeted sales. It also keeps its inventory of raw materials at 50% of the coming months budgeted production. Each unit of product requires two pounds of materials. The production budget is, in units: May, 1,000; June, 1,200; July, 1,300; august, 1,600. Raw material purchases in July would be

A.1,525 poundsC.2,550 pounds

B.2,900 poundsD.3,050 pounds

9. Generous Company began its operations on January 1 of the current year. Budgeted sales for the first quarter are P240,000, P300,000, and P420,000, respectively, for January, February and March. Generous Company expects 20% of its sales cash and the remainder on account. Of the sales on account, 70% are expected to be collected in the month of sale, 25% in the month following the sale, and the remainder in the following month. How much should Generous receive from sales in March?

A.P304,800C.P388,800

B.294,000D.P295,200

10. Mendrez Company has a collection schedule of 60% during the month of sales, 15% the following month, and 15% subsequently. The total credit sales in the current month of September were P80,000 and total collections in September were P57,000. What were the credit sales in July?

A.P90,000C.P45,000

B.P30,000D.P32,000

11. Obligacion Company has P299,000 in accounts receivable on January 1, 2006. Budgeted sales for January are P860,000. Obligacion expects to sell 20% of its merchandise for cash. Of the remaining sales, 75% are expected to be collected in the month of sale and the remainder the following month.

The January cash collections from sales are:

A.P815,000C.P471,000

B.P691,000D.P987,000

12. Adel Company has the following sales forecasts for the selected three-month period in 2007:

Month Sales

AprilP12,000

May 7,000

June 8,000

Seventy percent of sales are collected in the month of the sale, and the remainder is collected in the following month.

Accounts receivable balance (April 1, 2007)P10,000

Cash balance (April 1, 2007) 5,000

Minimum cash balance is P5,000. Cash can be borrowed in P1,000 increments from the local bank (assume no interest charges).

How much cash would be collected in June from sales?

A.P 7,700C.P 8,000

B.P 8,500D.P10,000

13. As of January 1, 2007, the Liberal Sales Company had an account receivable of P500,000. The sales for January, February, and March were as follows: P1,200,000, P1,400,000 and P1,500,000, respectively. Of each months sales, 80% is on account. 60% of account sales is collected in the month of sale, with remaining 40% collected in the following month. What is the accounts receivable balance as of March 31, 2007?

A.P720,000C.P587,200

B.P480,000D.P600,000

14. Cascades Company, a merchandising firm, is preparing its master budget and has gathered the following data to help budget cash disbursements:

Budgeted data:

Cost of goods soldP1,680,000

Desired decrease in inventories70,000

Desired decrease in Accounts Payable150,000

All of the accounts payables are for inventory purchases and all inventory items are purchased on account. What are the estimated cash disbursements for inventories for the budget period?

A.P1,460,000C.P1,900,000

B.P1,600,000D.P1,760,000

15. Albatross Company started its commercial operations on September 30 of the current year. Projected manufacturing costs for the first three months of operations are P1,568,000, P1,952,000, and P2,176,000, respectively. Depreciation, insurance, and property taxes represent P288,000 of the estimated manufacturing costs. Insurance was paid on September 30, and property taxes will be paid in July next year. Seventy-five percent of the remainder of the manufacturing costs are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month. The cash payments for manufacturing costs in the month of November are:

A.P1,568,000C.P1,664,000

B.P1,952,000D.P1,856,000

16. In responsibility accounting the most relevant classification of costs is

A.fixed and variableC.discretionary and committed

B.incremental and nonincrementalD.controllable and noncontrollable

17. Which one of the following would NOT usually be considered a controllable cost for the product or division manager?

A.factory wagesC.maintenance

B.plant salariesD.plant rent expense

18. Return on investment (ROI) is calculated as

A.divisional operating income/divisional investment

B.divisional investment divisional income

C.divisional investment/divisional operating income

D.divisional income (divisional investment x required rate of return)

19. Using residual income for evaluating performance

A.penalizes managers whose segments have low ROIs

B.penalizes managers of relatively large segment

C.encourages managers to maximize pesos of profit after a required ROI has been achieved

D.encourage managers to maximize ROI for the company

20. An advantage of residual income is that it encourages managers to

A.accept projects which provide returns in excess of the company's required rate of return

B.to increase asset turnover

C.attempt to increase the margin

D.all of the above

21. A cost center is used to

A.show responsibility for scheduling materials, labor, and overhead

B.collect costs incurred performing a set of homogeneous activities

C.show authority for choosing product markets and sources of supply

D.assign responsibility for setting the chart of accounts

22. A distinguishing characteristic of an investment center is that

A.revenues are generated by selling and buying stocks and bonds.

B.interest revenue is the major source of revenues.

C.the profitability of the center is related to the funds invested in the center.

D.it is a responsibility center which only generates revenues.

23. Which of the following responsibility centers have managers who are held accountable for costs?A.Cost centers and Investment centers

B.Revenue centers and Profit centers

C.Revenue centers and Investment centers

D.Cost centers and Profit centers

24. Controllable costs are costs that

A.fluctuate in total in response to small changes in the rate of capacity utilization.

B.will be unaffected by current managerial decisions.

C.management decides to incur in the current period to enable the company to achieve objectives other than filling customers orders.

D.are likely to respond to the amount of attention devoted to them by a specified manager

25. The criteria used for evaluating performance

A.should be designed to help achieve goal congruence

B.can be used only with profit centers and investment centers

C.should be used to compare past performance with current performance

D.motivate people to work in the companys best interest

26. Evaluating performance using ROI encourages managers to focus on

A.income and investment

B.cost efficiency and operating asset efficiency

C.both a and b

D.neither a nor b

1. The Dela Merced Companys Household Products Division reported in 2007 sales of P15,000,000, an asset turnover ratio of 3.0, and a rate of return on average assets of 18 percent. The percentage of net income to sales is

A.6 percent.C.3 percent

B.12 percent.D.5 percent.

2. Marsh Company that had current operating assets of one million and net income of P200,000 had an opportunity to invest in a project that requires an additional investment of P250,000 and increased net income by P40,000. After the investment, the company's ROI will be

A.16.0%C.19.2%

B.18.0%D.20.2%

3. Matipid Division of Expenditures Company expects the following results for 2007:

Unit sales 70,000Unit selling priceP 10Unit variable costP 4Total fixed costsP300,000Total investmentP500,000Consider the following:

Investment centers after-tax operating profitP 50,000Investment centers total assets800,000Investment centers current liabilities80,000Weighted-average cost of capital6.5%What is the economic value added (EVA)?

A.P60,000C.P 6,000

B.P 3,200D.P50,000

4. If the investment turnover increased by 30% and ROS decreased by 20%, the ROI would

A.increase by 30%C.increase by 6%

B. increase by 4%D.none of these

5. Transfer prices are charges for

A.transportation of goods outside units of an organization.

B.goods sold by subunits to outside customers.

C.goods exchanged among subunits.

D.goods stored within a subunit.

6. Which item is usually not relevant to a decision by a divisional manager to reduce a transfer price to meet a price offered to another division by an outside supplier?

A.opportunity cost

B.variable manufacturing costs

C.fixed divisional overhead

D.the price offered by the outside supplier

7. An appropriate transfer price between two divisions of the Reno Corporation can be determined from the following data:

Fabrication Division

Market price of subassembly P50

Variable cost of subassembly P20

Excess capacity (in units)1,000

Assembling Division

Number of units needed 900

What is the natural bargaining range for the two divisions?

A.Between P20 and P50C.Between P50 and P70

B.Any amount less than P50D.P50 is the only acceptable price

8. Company Y is highly decentralized. Division X, which is operating at capacity, produces a component that it currently sells in a perfectly competitive market for P13 per unit. At the current level of production, the fixed cost of producing this component is P4 per unit and the variable cost is P7 per unit. Division Z would like to purchase this component from Division X. What would be the price that Division X should charge Division Z?

A.P 7C.P 11

B.P 13D.P 9

9. The Valve Division of Industrial Company produces a small valve that is used by various companies as a component part in their products. Industrial Company operates its divisions as autonomous units, giving its divisional manager great discretion in pricing and other decisions. Each division is expected to generate a rate of return of at least 14 percent on its operating assets. The Valve Division has average operating assets of P700,000. The valves are sold for P5 each. Variable costs are P3 per valve, and fixed costs total P462,000 per year. The Division has a capacity of 300,000 units.

How many valves must the Valve Division sell each year to generate the desired rate of return on its assets?

A.280,000C.355,385

B.350,000D.265,000

The current income for a subunit is P36,000. Its current invested capital is P200,000. The subunit is considering purchasing for P20,000 equipment that will increase annual income by an estimated P2,800. The firm's cost of capital is 12%. If the equipment is purchased, the residual income of the subunit will

A.increase by P2,800C.increase by P400

B.increase by P16,000D.increase by 4%

10. The minimum required ROI is 15 percent, and divisions are evaluated on residual income. A foreign customer has approached Matipids manager with an offer to buy 10,000 units at P7 each. If Matipid accepts the order, it would not lose any of the 70,000 units at the regular price. Accepting the order would increase fixed costs by P10,000 and investment by P40,000.

What is the minimum price that Matipid could accept for the order and still maintain its expected residual income?

A.P5.00C.P5.60

B.P4.75D.P9.00

Segment A generated sales revenues of P400,000 and variable operating expenses of P180,000. Its controllable fixed expenses were P40,000. It was assigned 20% of P200,000 of fixed costs controlled by others. The common fixed costs were P25,000. What was Segment A's controllable segment profit margin?

A.P220,000C.P140,000

B.P180,000D.P160,000

11. If the investment turnover decreased by 10% and ROS decreased by 30%, the ROI would

A.increase by 30%C.decrease by 10%

B.decrease by 37%D.none of the above

12. A transfer price is a price charged

A.to outside customers

B.when one division sells its goods or services to another division

C.by the selling division to the buying division when outside market does not exist

D.a and b

13. The general rule in establishing transfer prices consistent with economic decision making is the

A.differential cost plus opportunity cost if goods are transferred internally.

B.actual cost plus opportunity cost if goods are transferred internally.

C.standard cost plus opportunity cost if goods are transferred internally.

D.all of the above.

14. Family Enterprises has two divisions: Davy and Johnny. Davy Division has a capacity to produce 2,000 units and is expecting to sell 1,500 units. Johnny Division wants to purchase 100 units of a product Davy produces. Davy sells the product at a selling price of P100 per unit, the variable cost per unit is P25 and the fixed costs total P30,000. The minimum transfer price that Davy will accept is?

A.P100 C.P43.75

B.P45 D.P25

15. Chips Division manufacturers electronic circuit boards. The boards can be sold either to Compo Division of the same company or to outside customers. Last year, the following activity occurred in division A:

Selling price per circuit board P125

Production cost per circuit board 90

Numbers of circuit boards:

Produced during the year 20,000

Sold to outside customers 16,000

Sold to Compo Division 4,000

Sales to Compo Division were at the same price as sales to outside customers. The circuit boards purchased by Compo Division were used in an electronic instrument manufactured by that division (one board per instrument). Compo Division incurred P100 in additional cost per instrument and then sold the instrument for P300 each.

Assume that Chips Divisions manufacturing capacity is 20,000 circuit boards. Next year Compo Division wants to purchase 5,000 circuits board from Chips Division rather than 4,000. (Circuit boards of this type are not available from outside sources.)

Chips Division proposed that a transfer for additional 1,000 units be produced by requiring its workers to work overtime. Chips Division indicated that the transfer price may be unreasonably high because of the overtime premium.

What is the maximum transfer that Compo Division will accept for the additional 1,000 units?

A.P 90C.P200

B.P125D.P300

1. Which of the following is not an element of competency?

a. To refrain from engaging in an activity that would discredit the accounting profession

b. To develop appropriate knowledge and expertise about a particular subject

c. To perform duties in accordance with relevant laws and technical standards

d. To prepare clear reports after an analysis of relevant and reliable information

2. Obtaining feedback is generally identified most directly with the management function of

a. Planningb. Directing and motivatingc. Controlling

d. Decision Making

3. Which of the following statement is true regarding ethics in decision-making?

a. Since most business decision making are simply a matter of economics, ethical considerations should be ignored.

b. Decision making can have an ethical as well as an economic impact.

c. Managerial accountants do not face ethical issues.

d. Business managers will always agree on ethical choices.

4. An integrated group of programs that supervises and support the operations of a

computer system as it executes users application programs is called a(n)

a. operating system

c. utility programs

b. data base management system

d. language program

5. A system flowchart

a. is synonymous with a program flowchart.

b. is necessary for only computer processes.

c. shows general flow and sequence but not processing details

d. is necessary for only manual processes.

6. The type of data processing in which remote terminals provide direct access to the computer is

a. on-line processing

c. batch processing

b. remote processing

d. central processing

7. A systems program

a. manipulates application programs

b. employs complex mathematics algorithms

c. is written in a high level language

d. is used in systems analysis and design activities

26. In which of the following organization does TQM work best?

a. Hierarchal

c. Teams of people from the same specialty

b. Specialist working individually

d. Teams of people from different specialties

27. Under the direct method of determining net cash provided by operating activities on the statement of cash flows, a gain on the sale of plant assets would be:

a. Added to the amount of operating expenses reported under the accrual basis

b. Deducted from the amount of operating expenses reported under the accrual basis

c. Deducted from the amount of sales reported under the accrual basis

d. Totally ignored since the gain is not a part of sales, cost of goods sold, or operating expenses.

28. The income statement of Jollibee Company shows operating expenses of P265. The following information is also available:

Prepaid expenses 1/1

P14

Prepaid expenses 12/31

21

Accrued expenses 1/1

40

Accrued expenses 12/31 36

Cash paid for operating expenses was

a. P224

b. 262

c. P268

d. P276

29. Which of the following account changes would result in a decrease in cash?

a. An increase in A/P

c. A decrease in A/P

b. An increase in Retained Earnings

d. A decrease in A/R

30. Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

a. that has been arranged from the highest number to the lowest number.

b. that has been arranged from the lowest number to the highest number.

c. to determine which items are in error.

d. to determine the amount and/or percentage increase or decrease that has taken place.

31. McDonalds Company has current assets of P400,000 and current liabilities of P500,000. Mc Donald Companys current ratio would be increased by

a. The purchase of P100,000 of inventory on account

b. The payment of P100,000 accounts payable

c. The collection of 100,000 accounts receivable

d. Refinancing a P100,000 long term loan with short-term debt

32. Given a quick ratio of 2.0, current assets of 5,000 and inventory of P2,000. The current liabilities is

a. 1,500

b. 2,500c. 3,500

d. 6,000

33. Kline Corporation had net income of P2 million in 2011. Using the 2011 financial elements as the base data, net income decreased by 70 percent in 2012 and increased by 175 percent in 2013. The respective net income reported by Kline Corporation for 2012 is:

a. 600,000b. 700,000c. 1,400,000d. 3,500,000

Question Nos. 86 through 88 are based on the data taken from the balance sheet of Nomad Company at the end of the current year:

Accounts payableP145,000

Accounts receivable110,000

Accrued liabilities4,000

Cash80,000

Income tax payable10,000

Inventory140,000

Marketable securities250,000

Notes payable, short-term85,000

Prepaid expenses15,000

34. The amount of working capital for the company is:

a. 351,000 b. 361,000 c. 211,000 d. 366,000

35. The companys current ratio as of the balance sheet date is:

a. 2.67:1 b. 2.44:1

c. 2.02:1

d. 1.95:1

36. The companys acid-test ratio as of the balance sheet date is:

a. 1.80:1

b. 2.40:1

c. 2.02:1

d. 1.76:1

37. Pine Hardware Store had net credit sales of P6,500,000 and cost of goods sold of P5,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were P600,000 and P700,000, respectively. The receivables turnover wasa. 7.7 times

b. 9.3 timesc. 10.8 timesd. 10.0 times

38. Net sales are P6,000,000, beginning total assets are P2,800,000, and the asset turnover is 3.0. What is the ending total asset balance?

a.P2,000,000c.P2,800,000

b.P1,200,000d.P1,600,000

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Mgmt Acctg 1 Compre