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QUESTION 18 Maria and Carmen's Cosmetics Balance Sheet Current Assets Current Liabilities 1779 Cash 1164 Marketable...

QUESTION 18

Maria and Carmen's Cosmetics
Balance Sheet
Current Assets Current Liabilities 1779
Cash 1164
Marketable Securities 286 Long Term Liabilities 925
Accounts Receivable 303
Inventory 1003 Total Liabilities 2704
Total Current Assets 2756
Stockholders' Equity 3682
Long Term Assets 3630
Total Assets 6386 Total Liabilities + Stockholders Equity 6386
Maria's and Carmen's Cosmetics
Income Statement
Sales 10707
Cost of Good sold -4459
Gross Margin 6248
Operating Expenses -4778
Income before interest and taxes 1470
Interest Expense 33
Taxes Expense 489
Net Income 948
There are 746 shares of stock outstanding and they sell for $25 each. Dividends are $.36 per share.
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the working capital?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the Current Ratio?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the acid test ratio?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the Debt ratio?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the times interest earned ratio?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the earnings per share?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the price earnings ratio?
      -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.       K.       L.   

What is the dividend yield?
A.

$977
B.

1.4 %
C.

$1.27
D.

44.5 times
E.

0.79
F.

19.7 times
G.

1.55 times
H.

19.6%
I.

.99 times
J.

0.05
K.

.42 times
L.

no correct match

Jesse spent $6000 on a computer system that no one can use. She can spend $100,000

on training or spend $25,000 to buy a better user friendly system. The $6000 is a

relevant cost

sunk cost

joint cost

opportunity cost
Business   Accounting   
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Homework Answers

Answer #1

Solution A:

Working capital = Current Assets - Current Liablities = $2,756 - $1,779 = $977

Solution B:

Current Ratio = Current Assets / Current Laibilities = $2,756 / $1,779 = 1.55 times

Solution C:

Acid test ratio = (Current Assets - Inventory) / Current Liabilities = ($2,756 - $1,003) / $1,779 = 0.99 times

Solution D:

Debt Ratio = Total Debt / Total Assets = $2,704 / $6,386 = 0.42 times

Solution E:

Times interest earned ratio = EBIT / Interest = $1,470 / $33 = 44.5 times

Solution F:

Earning per share = Net Income / Oustanding shares = $948 / 746 = $1.27 per share

Solution G:

Price Earning Ratio = Market price per share / Earning per share = $25 / $1.27 = 19.7 times

Solution H:

Dividend yield = Dividend per share / Market price per share = $0.36 / $25 = 1.4%

Solution 2:

Cost already spend on computer system for $6,000 is a sunk cost.

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