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MBA 616–ACCOUNTING PRACTICES &amp; ANALYSIS
DR. MIKE FISCHER
FALL 2016
STUDENT NAME Hinds, Winthrop Scot
Instructions:
1. Insert your name in the space above.
2. Save the quiz in a new file, following the format: Lastname_Firstname_Quiz1.
4. There are 2 additional tabs at the bottom of this Excel spreadsheet, one for each
of the numbered problems.
5. Some of the problems contain multiple parts or questions. Be sure to complete all parts.
6. Perform all necessary calculations in Excel, showing all work including formulas. QUIZ 1, QUESTION 1
PINE TREE COMPANY
COMPARATIVE INCOME STATEMENTS
FOR THE YEARS ENDED 12/31/14 AND 12/31/13 Sales
Less: Cost of Goods Sold
Gross profit
Less: operating expenses
Wage expense
Depreciation expense
Rent expense (in thousands)
2014
2013
1,969
1,718
1,091
878 886
832 195
36
46 176
29
40 49 77 Total operating expenses
Operating income 326
552 322
510 Less: interest expense
Income before tax 19
533 66
444 Less: income tax expense 213 178 Net income 320 266 Miscellaneous expense Requirements:
a. Convert the income statement above to common size format. Be sure to
include all appropriate formulas (20 points).
Multiple Choice
Place an &quot;X&quot; next to the best answer for each item
b. What might best explain the change in gross profit % from 2013 to 2014? (10 points)
1. Increased production costs
2. Decrease in volume (quantity) of goods sold
3. Increase in selling prices
4. Decreased raw materials costs
c. Which is the best explanation for the change in Net Income \$ from 2013 to 2014? (10 points)
1. Increase in sales
2. Decrease in production costs
3. Decrease in miscellaneous expense
4. Increase in income tax expense
d. Which is the best explanation for the change in operating income % from 2013 to 2014? (10 points)
1. Increase in sales
2. Decrease in operating expenses 3. Increase in production costs
4. Increase in income tax expense QUIZ 1, QUESTION 2
ABC COMPANY
SELECTED FINANCIAL INFORMATION
2015, 2014, 2013 Current assets
Current liabilities
Cash
Marketable securities
Inventory
Sales
Cost of Goods Sold B
2015
950,000
525,000
210,000
105,000
375,000
1,850,000
1,250,000 8
9
10
11
12
13
14 D
2014
850,000
450,000
260,000
85,000
275,000
2,100,000
1,450,000 Assume:
1. ABC’s current assets are comprised of cash,
accounts receivable, marketable securities and
inventory at the end of each year.
2. 10% of sales are for cash; the remainder of
sales are on credit. Requirements:
Calculate each of the following ratios for 2014
and 2015 in the space below.
Be sure to show your work, including
appropriate formulas.
a. Working capital (10 points)
b. Current ratio (10 points)
c. Quick (Acid Test) ratio (10 points)
d. Inventory turnover (10 points)
e. Days sales outstanding in receivables
(10 points) 425,000 B8-B9
1.81 B8/B9
3.77 (B10+B11+(0.9*B13))/B9 400,000 D8-D9
1.89 D8/D9
4.97 (D10+D11+(0.9*D13))/D9 2013
800,000
500,000
245,000
75,000
325,000
1,750,000
1,250,000 D11+(0.9*D13))/D9