Please give explanation to your answers.
1. Britney and Christina Incorporated has a debt ratio of 0.42, noncurrent liabilities of $20,000 and total assets of $70,000. What is Britney and Christina's level of current liabilities?
2. In 2002 Clanton, Inc. had a gross profit of $27,000 on sales of $110,000. Clanton's operating expenses for 2002 were $13,000, and its net profit margin was .0585. Clanton had no interest expense in 2002. What was Clanton's gross profit margin for 2002?
3. In making financial decisions, the relevant tax rate is the:
A marginal tax rate
B average (effective) tax rate
C previous year's tax rate
D maximum allowable tax rate
4. Which of the following best reflects the mix of corporate securities issued in the U.S.?
A 74% debt, 26% equity
B 55% debt, 45% equity
C 45% debt, 55% equity
D 26% debt, 74% equity
5. Why is the quick ratio a more refined liquidity measure than the current ratio?
A It measures how "quickly" cash and other liquid assets flow through the company.
B Inventories are generally the least liquid of the firm's current assets.
C Inventories are generally among the most liquid of the firm's current assets.
D Cash is the most liquid current asset.
6. PDQ Corp. has sales of $3,000,000; the firm's cost of goods sold is $1,425,000; and its total operating expenses are $700,000. The firm's interest expense is $230,000, and the corporate tax rate is 40%. What is PDQ's tax liability?
7. The quick ratio of a firm would be unaffected by which of the following?
A land held for investment is sold for cash
B equipment is purchased, financed by a long-term debt issue
C inventories are sold for cash
D inventories are sold on a short-term credit basis
8 Which of the following ratios would be the best way to determine how customers are paying for their purchases?
A Inventory turnover.
B Total asset turnover.
C Current ratio.
D Average collection period.
This solution comprised of questions related with managerial accounting.