D104 EXAM 2 REVIEW Questions with
Verified Correct Answers
A steel manufacturer uses the production variable method for depreciating assets.
Which combination best describes the depreciation method used?
Straight line and activity
A company invested $15,000,000 in a coal mine estimated to have 1,500,000 tons of coal.
In the first year, the company extracted 100,000 tons of coal. At the end of the first year,
it became clear that the coal mine was likely to have only another 700,000 tons of coal
remaining. Which depletion rate will be used starting in the second year?
20
A company reported total assets of $10,000,000 as of December 31, 2018, and
$14,000,000 as of December 31, 2019. Net sales revenue was $6,000,000 for the year
ending December 31, 2018, and $8,000,000 for the year ending December 31, 2019.
What was the company's asset turnover ratio for the year ending December 31, 2019?
.67
A company's profit margin on sales was 2.50%, and its asset turnover was 0.50. What
was the company's return on assets for this period?
1.25 (.5 * 2.5)
A company reported the following information in its 2019 annual report:
Net sales $ 750,000Total assets at the end of year 2 $ 500,000Total assets at the end of
year 1 $ 450,000Net income $ 120,000
What is the company's profit margin on sales?
, 16%
A company reported the following information in its 2019 annual report:
Net sales $ 750,000Total assets at the end of year 2 $ 500,000Total assets at the end of
year 1 $ 450,000Net income $ 120,000
What is the company's return on assets?
.25
A local restaurant has taken a $40,000 loan from their bank to perform needed
renovations. The restaurant must repay the borrowed funds in eight months with 3%
interest. How should the restaurant record the loan?
DR Cash 40,000
CR N/P 40,000
A company’s normal operating cycle is one year, and they have the following account
balances taken from the trial balance:
Accounts payable: $50,000
Accounts receivable: $25,000
Notes payable (due in 30 months): $15,000
Customer advances: $10,000
Bonds payable (due in 60 months): $30,000
Sales tax payable: $5,000
Which amount should be included as current liabilities on the balance sheet?
65,000
Verified Correct Answers
A steel manufacturer uses the production variable method for depreciating assets.
Which combination best describes the depreciation method used?
Straight line and activity
A company invested $15,000,000 in a coal mine estimated to have 1,500,000 tons of coal.
In the first year, the company extracted 100,000 tons of coal. At the end of the first year,
it became clear that the coal mine was likely to have only another 700,000 tons of coal
remaining. Which depletion rate will be used starting in the second year?
20
A company reported total assets of $10,000,000 as of December 31, 2018, and
$14,000,000 as of December 31, 2019. Net sales revenue was $6,000,000 for the year
ending December 31, 2018, and $8,000,000 for the year ending December 31, 2019.
What was the company's asset turnover ratio for the year ending December 31, 2019?
.67
A company's profit margin on sales was 2.50%, and its asset turnover was 0.50. What
was the company's return on assets for this period?
1.25 (.5 * 2.5)
A company reported the following information in its 2019 annual report:
Net sales $ 750,000Total assets at the end of year 2 $ 500,000Total assets at the end of
year 1 $ 450,000Net income $ 120,000
What is the company's profit margin on sales?
, 16%
A company reported the following information in its 2019 annual report:
Net sales $ 750,000Total assets at the end of year 2 $ 500,000Total assets at the end of
year 1 $ 450,000Net income $ 120,000
What is the company's return on assets?
.25
A local restaurant has taken a $40,000 loan from their bank to perform needed
renovations. The restaurant must repay the borrowed funds in eight months with 3%
interest. How should the restaurant record the loan?
DR Cash 40,000
CR N/P 40,000
A company’s normal operating cycle is one year, and they have the following account
balances taken from the trial balance:
Accounts payable: $50,000
Accounts receivable: $25,000
Notes payable (due in 30 months): $15,000
Customer advances: $10,000
Bonds payable (due in 60 months): $30,000
Sales tax payable: $5,000
Which amount should be included as current liabilities on the balance sheet?
65,000
