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Answer - ELEC 001

The document provides accounting information for the Cruise Company and KK,LL & MM Partnership. It also includes multiple choice questions related to calculating gross margin, working capital, current ratios, acid-test ratios, and credit terms.

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Kris Van Halen
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1K views

Answer - ELEC 001

The document provides accounting information for the Cruise Company and KK,LL & MM Partnership. It also includes multiple choice questions related to calculating gross margin, working capital, current ratios, acid-test ratios, and credit terms.

Uploaded by

Kris Van Halen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Selected information from the accounting records of the Cruise Company is as

follows:

Net A/R at December 31, 2009 P 900,000


Net A/R at December 31, 2010 P1,000,000
Accounts receivable turnover 5 to 1
Inventories at December 31, 2009 P1,100,000
Inventories at December 31, 2010 P1,200,000
Inventory turnover 4 to 1

What was the gross margin for 2010?


a. P150,000 c. P300,000
b. P200,000 d. P400,000

KK,LL & MM Partnership, engaged in the sale of “state-of -the –art”


calculators, provided you the following information taken from its balance
sheet at the end of the current year:
Accounts payable P145,000
Accounts receivable 110,000
Accrued liabilities 4,000
Cash 80,000
Income tax payable 10,000
Inventory 140,000
Marketable securities 250,000
Notes payable, short-term 85,000

62. The amount of net working capital is:


a. P351,000 c. P211,000
b. P361,000 d. P336,000

63. The company’s current ratio as of the balance sheet date is:
a. 2.67:1 c. 2.02:1
b. 2.44:1 d. 1.95:1

64. The company’s acid-test ratio as of the balance sheet date is:
a. 1.80:1 c. 2.02:1
b. 2.40:1 d. 1.76:1

It is the policy of Franz Corp. that the current ratio cannot fall below 1.5 to
1.0. Its current liabilities are P400,000 and the present current ratio is
2 to 1. How much is the maximum level of new short-term loans it can secure
without violating the policy?
a. P400,000 b. P300,000 c. P266,667 d. P800,000

Sixty percent of Baco's annual sales of $900,000 is on credit. If its year-end


receivables turnover is 4.5, what is the average collection period and the
year-end receivables, respectively (assume a 365-day year)?

A. 81 days and $120,000. C. 73


days and $108,000.
B. 73 days and $120,000. D. 81
days and $200,000.

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