Question 5: Detroit Tire Company has pre-tax profits of $300. The company's times-interestearned ratio is 7.0. What is the company's interest expense? a) b) c) d) $35 $40 $50 $55
Question 6: Hammond Corporation was formed on December 31, 20X0 with $10.0 million in cash from its shareholders. During 20X1, the following transactions and items were noted: The company had net income of $12.0 million, which included depreciation and amortization expenses of $6.0 million Hammond declared a $2.0 million cash dividend to be paid in January 20X2. The company purchased new equipment for $8.0 million in cash A new bond was issued resulting in cash proceeds of $15.0 million The company paid down its revolving line of credit by $4.0 million Net working capital items (other than cash) increased by $14.0 million
Hammond's December 31, 20X1 balance sheet will reflect a cash balance of ($ millions): a) b) c) d) $13.0. $15.0. $17.0. $16.5
Question 7: Small Cheese Company has 30,000 cumulative preferred shares and 25,000 noncumulative preferred shares both paying out $10 per share in dividends. No dividends are declared in 20X7. Small Cheese has net income of $2,000,000 and has weighted average common shares outstanding of 1,000,000 on December 31, 20X7. What is the basic earnings per share of Small Cheese for the year ended December 31, 20X7? a) b) c) d) $2.00 $1.45 $1.70 $1.85
Question 8: Under IFRS, when an asset is deemed impaired, a firm should proceed to write down the asset to: a) b) c) d) Its value in use. Its net realizable value. The greater of its net realizable value and its value in use. The greater of recoverable amount and value in use
Question 9: Which of the following statements regarding the liability method of accounting for deferred taxes is most accurate? a) Deferred tax liabilities are reported on the balance sheet when it is expected that income taxes will be paid in the future when temporary differences reverse. b) The current period's income tax expense reported on the income statement is determined by subtracting the...