2024 – 1 Consider the following information for Ball crop Selling and administrative expense 50 000 Depreciation

1. Consider the following information for Ball crop.

	Selling and administrative expense	$50,000
	Depreciation expense	80,000
Sales		400,000
Interest expense		30,000
	Cost of goods sold	150,000
	Taxes	18,550

What is the operating profit for Ball Crop.?
a. $71,450
b. $90,000
c. $120,000
d. none of the above

2. Allen Lumber Company had earning after taxes of $580,000 in the year 2006 with 400,000 shares outstanding. On January 1, 2007 the firm issued $35,000 new shares. Because of the proceeds from these new shares and other operating improvement,2007 earning was 25 percent higher than in 2006. Earning per share for the year 2007 was.
a. $1.67
b. $1.45
c. approximately $1.81
d. none of the above  

3. GS Cookie Co. forecast cash receipt or January and February of $9,000 and $10,000, respectively. Cash payment of $4,000 and $ 55,00 are expected in these two months. GS cookie’s Cash balance at the beginning of January was $5,000 a level that it attempts to maintain. At the beginning of the year. GS Cookie has a $13,000 balance Outstanding on its line of credit at the local bank. Based on its cash budget, how much of the line of credit can GS Cookie repay by the end of February ?
a. $10,000
b. $9,000
c. $4,000
d. None GS Cookie must increase borrowings.

4.  A firm’s long term assets =$75,000, total assets = $200,000, inventory =$25,000 and current liabilities =$50,000
a. Current ratio =0.5;quick ratio= 1.5
b. Current ratio=1.0; quick ratio= 2.0
c. Current ratio= 1.5;quick ratio= 2.0
d.  Current ratio= 2.5; quick ratio= 2.0