FIN 300 MARIA'S SOUP SHACK
FINANCIAL STATEMENTS PRACTICE
EXAMINATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
◍ Why liquidity matters.
Answer: Higher liquidity usually means lower transaction costs and easier
trading.
◍ Lexington Motors had current assets of $13,200, net fixed assets of $48,200,
and current liabilities of $10,100 at the beginning of the year. At the end of
the year, the firm had current assets of $11,700, net fixed assets of $51,100,
and current liabilities of $10,700. What is the amount of the change in net
working capital for the year?$800$1,200$4,100−$2,100.
Answer: −$2,10013200-10100=310011700-10700=10001000-3100=−$2,100
◍ For the past year, Bloomington Industries had an operating cash flow of
$2,900. The firm paid no dividends but did repurchase $5,200 worth of
common stock. The net capital spending was $620 and the change in net
working capital was $100. What was the cash flow to
creditors?$4,680$6,660$7,380-$3,020.
Answer: cash flow from assets = 2900 - 620 - 100 = 2180cash flow to
creditors = 2180 - 5200 = - 3020
◍ Sarbanes-Oxley (SOX).
Answer: U.S. law that increased corporate reporting, auditing, and internal
control requirements.
◍ The Apple Tree is a retail store that has $2,800 of net working capital,
$9,250 of long-term debt, $2,900 of current liabilities, and $12,000 of
, owners' equity. What is the book value of the firm's net fixed
assets?$15,550$18,450$21,350$17,850.
Answer: $18,450
◍ The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term
debt of $5 million, and the 2015 balance sheet showed long-term debt of
$5.3 million. The 2015 income statement showed an interest expense of
$120,000. What was the firm's cash flow to creditors during 2015?
(Negative amount should be indicated by a minus sign. Enter your answer in
dollars, not millions of dollars, e.g., 1,234,567.) Cash flow to creditors $.
Answer: -180,000Openning Long term debt 5000000Add interest
120000Less Closing Long term debt 5300000Cash flow to Creditors
-180000
◍ The Dyrdek Co. had $273,000 in 2014 taxable income. Use the tax rates
from Table 2.3. What is the average tax rate? (Do not round intermediate
calculations. Enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.) Average tax rate % What is the marginal tax rate? (Enter your
answer as a percent rounded to the nearest whole number, e.g., 32.)
Marginal tax rate %.
Answer: 32.86%39%
◍ Trend analysis.
Answer: Comparing a firm's financial performance over time.
◍ Dodd-Frank.
Answer: U.S. financial reform law after the 2008 crisis to increase
regulation and oversight.
◍ A firm has current assets of $270, stockholders' equity of $1,550, net fixed
assets of $3,000, and current liabilities of $170. How much long-term debt
does this firm have?$1,550$1,280$270$1,450.
Answer: $1,550
◍ Role of interest rates in economy.
Answer: They affect borrowing, spending, saving, investing, and economic
FINANCIAL STATEMENTS PRACTICE
EXAMINATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
◍ Why liquidity matters.
Answer: Higher liquidity usually means lower transaction costs and easier
trading.
◍ Lexington Motors had current assets of $13,200, net fixed assets of $48,200,
and current liabilities of $10,100 at the beginning of the year. At the end of
the year, the firm had current assets of $11,700, net fixed assets of $51,100,
and current liabilities of $10,700. What is the amount of the change in net
working capital for the year?$800$1,200$4,100−$2,100.
Answer: −$2,10013200-10100=310011700-10700=10001000-3100=−$2,100
◍ For the past year, Bloomington Industries had an operating cash flow of
$2,900. The firm paid no dividends but did repurchase $5,200 worth of
common stock. The net capital spending was $620 and the change in net
working capital was $100. What was the cash flow to
creditors?$4,680$6,660$7,380-$3,020.
Answer: cash flow from assets = 2900 - 620 - 100 = 2180cash flow to
creditors = 2180 - 5200 = - 3020
◍ Sarbanes-Oxley (SOX).
Answer: U.S. law that increased corporate reporting, auditing, and internal
control requirements.
◍ The Apple Tree is a retail store that has $2,800 of net working capital,
$9,250 of long-term debt, $2,900 of current liabilities, and $12,000 of
, owners' equity. What is the book value of the firm's net fixed
assets?$15,550$18,450$21,350$17,850.
Answer: $18,450
◍ The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term
debt of $5 million, and the 2015 balance sheet showed long-term debt of
$5.3 million. The 2015 income statement showed an interest expense of
$120,000. What was the firm's cash flow to creditors during 2015?
(Negative amount should be indicated by a minus sign. Enter your answer in
dollars, not millions of dollars, e.g., 1,234,567.) Cash flow to creditors $.
Answer: -180,000Openning Long term debt 5000000Add interest
120000Less Closing Long term debt 5300000Cash flow to Creditors
-180000
◍ The Dyrdek Co. had $273,000 in 2014 taxable income. Use the tax rates
from Table 2.3. What is the average tax rate? (Do not round intermediate
calculations. Enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.) Average tax rate % What is the marginal tax rate? (Enter your
answer as a percent rounded to the nearest whole number, e.g., 32.)
Marginal tax rate %.
Answer: 32.86%39%
◍ Trend analysis.
Answer: Comparing a firm's financial performance over time.
◍ Dodd-Frank.
Answer: U.S. financial reform law after the 2008 crisis to increase
regulation and oversight.
◍ A firm has current assets of $270, stockholders' equity of $1,550, net fixed
assets of $3,000, and current liabilities of $170. How much long-term debt
does this firm have?$1,550$1,280$270$1,450.
Answer: $1,550
◍ Role of interest rates in economy.
Answer: They affect borrowing, spending, saving, investing, and economic
