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.
20182017
Assets
Cash$ 50,000$ 45,000
Accounts receivable35,00025,000
Inventory25,00020,000
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 liabilities110,00090,000
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 profit50,000
Operating expenses 15,000
Income before income tax35,000
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
ekkarill92 answered 1 year agoRelated Solutions
Green Thumb Garden Supplies reported the following information for 2017 and 2018.  
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.  
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
...
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