Question

In: Accounting

Use the following information to answer questions 7 – 10. Green Thumb Garden Supplies reported the...

Use the following information to answer questions 7 – 10.
Green Thumb Garden Supplies reported the following information for 2017 and 2018.
​​​2018​2017
​Assets
​Cash​​$ 50,000​$ 45,000
​Accounts receivable​​35,000​25,000
​Inventory​​25,000​20,000
​Property, plant, and equipment​​ 240,000​ 210,000
​Total assets​​$350,000​$300,000
​Liabilities and Shareholders’ Equity
​Current liabilities​​$ 65,000​$ 60,000
​Non-current liabilities​​110,000​90,000
​Shareholders’ equity—common​​ 175,000​ 150,000
​Total liabilities and shareholders’ equity​​$350,000​$300,000
​Income statement for 2018
​Sales​​$95,000
​Cost of goods sold​​ 45,000
​Gross profit​​50,000
​Operating expenses​​ 15,000
​Income before income tax​​35,000
​Income tax expense​​ 5,000
​Net income​​$30,000
7. What is the current ratio for 2018?
(a) 2.0
(b) 1.7
(c) 1.6
(d) 0.6
8. What is the receivables turnover ratio for 2018?
(a) 2.7 times
(b) 2.0 times
(c) 3.2 times
(d) 3.8 times
9. What is the inventory turnover ratio for 2018?
(a) 2.3 times
(b) 2.0 times
(c) 1.8 times
(d) 0.5 times
10. What is the return on assets for 2018?
(a) 27.1%
(b) 10.0%
(c) 9.2%
(d) 8.6%
11) You are supposed to receive $2,000 five years from now. At an interest rate of 6%, what is the $2,000 worth today.
A. $1,491.97
B. $1,492.43
C. $1,494.52
D. $1,497.91
E. $1,499.01
12) You just received $278,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your goal is to retire 38 years from today. How much more will you have in your account on the day you retire if you can earn an average return of 9.5% rather than just 9.0%?
A. $794,014
B. $1,396,036
C. $1,611,408
D. $1,818,342
E. $2,033,333
13) What is the future value of $7,540 invested at 6.5% interest for seven years?
A. $11,717.06
B. $10,330.45
C. $11,001.93
D. $11,337.37
E. $11,041.26
14) Jessica invests $3,000 in an account that pays 5% simple interest. How much more could she have earned over a 7-year period if the interest had compounded annually?
A. $122.20
B. $221.30
C. $129.30
D. $171.30
E. $147.80
15) You just won the lottery and want to put some money away for your child's college education. College will cost $65,000 in 18 years. You can earn 8% compounded annually. How much do you need to invest today?
A. $11,763.07
B. $13,690.82
C. $16,266.19
D. $9,828.18
E. $15,258.18

Solutions

Expert Solution


Related Solutions

Green Thumb Garden Supplies reported the following information for 2017 and 2018.                             &nbsp
Green Thumb Garden Supplies reported the following information for 2017 and 2018.                                                                                        2018           2017        Assets        Cash                                                                 $ 50,000    $ 45,000        Accounts receivable                                             35,000        25,000        Inventory                                                             25,000        20,000        Property, plant, and equipment                         240,000      210,000        Total assets                                                      $350,000    $300,000        Liabilities and Shareholders’ Equity        Current liabilities                                             $ 65,000    $ 60,000        Non-current liabilities                                        110,000        90,000        Shareholders’ equity—common                        175,000      150,000        Total liabilities and shareholders’ equity        $350,000    $300,000        Income statement for 2018        Sales                                                                  $95,000        Cost of goods sold                                               45,000       ...
Green Thumb Garden Supplies reported the following information for 2017 and 2018.                             &nbsp
Green Thumb Garden Supplies reported the following information for 2017 and 2018.                                                                                        2018           2017        Assets        Cash                                                                 $ 50,000    $ 45,000        Accounts receivable                                             35,000        25,000        Inventory                                                             25,000        20,000        Property, plant, and equipment                         240,000      210,000        Total assets                                                      $350,000    $300,000        Liabilities and Shareholders’ Equity        Current liabilities                                             $ 65,000    $ 60,000        Non-current liabilities                                        110,000        90,000        Shareholders’ equity—common                        175,000      150,000        Total liabilities and shareholders’ equity        $350,000    $300,000        Income statement for 2018        Sales                                                                  $95,000        Cost of goods sold                                               45,000       ...
Green Caterpillar Garden Supplies Inc. reported sales of $743,000 at the end of last year; but...
Green Caterpillar Garden Supplies Inc. reported sales of $743,000 at the end of last year; but this year, sales are expected to grow by 9%. Green Caterpillar expects to maintain its current profit margin of 24% and dividend payout ratio of 15%. The firm’s total assets equaled $425,000 and were operated at full capacity. Green Caterpillar’s balance sheet shows the following current liabilities: accounts payable of $80,000, notes payable of $45,000, and accrued liabilities of $65,000. Based on the AFN...
Use the following information to answer questions 7-11 [The following information applies to the questions displayed...
Use the following information to answer questions 7-11 [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.    April 30 May 31   Inventories      Raw materials $ 33,000   $ 58,000      Work in process 9,600 18,200      Finished goods 59,000 33,400   Activities and information for May      Raw materials purchases (paid with cash) 174,000      Factory payroll (paid with cash) 330,000      Factory overhead         Indirect materials...
Use the following information to answer Questions 9 and 10: An analyst gathered the following information...
Use the following information to answer Questions 9 and 10: An analyst gathered the following information regarding Beta Corporation: •Current dividend per share = $2.18 •Next year's expected dividend growth rate of 30% is expected to decline linearly over the following 8 years to a long-term constant growth rate of 6%. •Required rate of return on the company's stock is 11%. Question: The value of the company's stock today is closest to: Select one: a. $41.86 b. $98.54 c. $88.07...
Use the following to answer questions 7-10: A = 4.0 m ± 0.2 m, B =...
Use the following to answer questions 7-10: A = 4.0 m ± 0.2 m, B = 3.1 m ± 0.4 m, C = 10.0 m/s ± 0.5 m/s, D = 0.5 s ± 0.01 s Be sure to include appropriate error in your answers Find A+B= C*D= B/D= A/D+C=
Use the following information to answer questions 6, 7 and 8. A stock currently trades for...
Use the following information to answer questions 6, 7 and 8. A stock currently trades for $30 share and is expected to pay a dividend of $1.20 in one year. Its expected price right after paying that dividend is $33. 6-The expected dividend yield is closest to: Group of answer choices a.4.20% b.3.60% c.3.40% d.4.00% 7.The expected capital gain rate is closest to: Group of answer choices a.6.0% b.4.0% c.14.0% d.10.0% 8-Assuming the stock is correctly priced, the cost of...
   Use the following information to answer questions 7.     On January 1, 2020, Beck Co....
   Use the following information to answer questions 7.     On January 1, 2020, Beck Co. issued (sold) ten-year bonds with a face amount of $3,000,000 and a stated      interest rate of 10%. Interest is payable semi-annually on January1 and July 1st of each year.      The bonds were priced to yield 8% (market interest rate).             Present value factors are as follows:                                                                                                                     At 4%                 At 8%          At 10% Present value of $1 for 10 periods 0.6756...
Use the following information about the closed economy of Vanatu to answer questions 7 and 8:...
Use the following information about the closed economy of Vanatu to answer questions 7 and 8: Y=$35,000 T=$5,000 C=MPC*(Y-T)+$1000-1,000r MPC=0.8 G=$6,500 I=$4000-2,000r 8. Now suppose that the government of Vanatu wants to increase spending on military services. Assume that government purchases increase by $1,500. At the same time, assume the inflation rate in Vanatu is, and remains, 10%. Then a) The nominal interest rate now is 76.7%; private savings increases b) The nominal interest rate now is 67.5%; private savings...
Credit Policy Changes Use the following information to answer the next three questions: Peterson Plumbing Supplies,...
Credit Policy Changes Use the following information to answer the next three questions: Peterson Plumbing Supplies, Inc. has the following projected credit sales for the second quarter: April May June Credit sales $290,000 $270,000 $195,000 Credit sales in February and March 2018 were $240,000 and $230,000, respectively. The company predicts that 15 percent of its customers will pay in the month of the sale and take a 2 percent discount, 75 percent of its customers will pay in the month...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT