Question

1. Calculate sales given the following data. Total fixed assets $400,000; long-term liabilities $155,000; total liabilities $280,000; total shareholders' equity $320,000; net working capital turnover 20.

$1,500,000

$1,700,000

$1,900,000

$2,100,000

$2,250,000

2.Calculate the value of total assets given the following information: total equity = $630; total debt ratio = .30.

$189

$375

$527

$750

$900

3.What is the net addition to cash given the information below?

Decrease in inventory = $5,250
Increase in accounts receivable = $7,650
Decrease in net fixed assets = $9,150
Increase in accounts payable = $6,250
Decrease in notes payable = $8,750
Increase in long-term debt = $8,500
Decrease in retained earnings = $1,150
Increase in common stock = $5,550

$11,650

$17,150

−$11,650

−$17,150

−$23,450

4.Calculate depreciation expense given the following information. Interest expense $2,000; times interest earned 5; cash coverage ratio 5.5.

$1,000

$1,200

$1,400

$1,600

$1,800

5.Given the following information, determine the total average tax rate for an Ontario resident earning $100,000 in employment income.

	Tax Rates	Tax Brackets
Federal	15.00%	Up to $43,953
	22.00	43,954−87,907
	26.00	87,908−136,270
	29.00	136,271 and over
British Columbia	5.05%	Up to $ 40,120
	9.15	40,121−80,242
	11.16	80,243−150,000
	12.16	150,001−220,000
	13.16	220,001 and over

42.16%

37.16%

27.31%

20.05%

15%

Answer 1

1-	total of liabilities and shareholders equity	total of liabilities+ total shareholders equity	280000+320000	600000
	total assets = 600000	Fixed assets =400000	current assets =600000-400000	200000
	total current liabilities	total of liabilities -long term liabilities	280000-155000	125000
	working capital	current assets-current liabilities	200000-125000	75000
	working capital turnover = sales /working capital	20 = sales/working capital	working capital = 75000*20	1500000
2-	debt ratio	total of debt/ total of equity	.3 = total debt/630	total debt = 630*.3
	total debt	630*.3	189
3-	net addition to cash
	Decrease in inventory		5250
	Increase in accounts receivable		-7650
	Increase in accounts payable		6250
	Decrease in notes payable		-8750
	Decrease in net fixed assets		9150
	Increase in long-term debt		8500
	Decrease in retained earnings		-1150
	Increase in common stock		5550
	net addition to cash		17150
4-	depreciation expense
	times interest earned	EBIT/interest	5 = EBIT/2000
	EBIT	2000*5	10000
	cash coverage ratio = ebit+ depreciation/ interest	5.5 = (10000+depreciation)/2000	10000+depreciation = 11000
	depreciation expense	11000-10000	1000