CH 3- TRIAL Q- FINA 2700

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Feb 20, 2024

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Chapter 03 Accounting and Finance 29. Calculate the EBIT (Operating Income) for a firm with $4 million total revenues, $3.5 million cost of goods sold, $500,000 depreciation expense, and $120,000 interest expense. 30. Assume a firm generates $2,000 in sales and has a $500 increase in accounts receivable during an accounting period. Based solely on this information, cash flow will increase by? 31. Assume a firm increases its revenue by $100 while increasing its cost of goods sold by $85. How much additional tax will the firm owe if its marginal tax rate is 25%? 32. What is the overall change in cash resulting from: $300 increase in inventories, $150 increase in accounts payable, $120 decrease in accounts receivable, $60 decrease in other current assets, $150 decrease in other current liabilities? 33. Dhaliwall Groceries has a net loss for the year of $5100, depreciation expense of $25,500, increase in operations (excluding depreciation) of $4,750, and the purchase of capital assets for $3525, there was also a net cash inflow from financing of $7000. What is the amount of net free cash flow? 34. Johnson's Nursery has net income of $42,500, depreciation expense of $1,800, interest expense of $900, taxes of $1,600, additions to net working capital of $2,300, and capital expenditures of $11,700. What is the amount of the free cash flow? 35. Revenue increases by $200 and the cost of goods sold is 78%. What dollar amount of extra taxes will be owed if the marginal tax rate is 35%? 36. You have gathered this information on a firm: $500,000 sales, $10,000 cash dividends, $300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense, $40.,000 interest expense, $10,000 purchase of productive equipment, no changes in working capital, and a tax rate of 35%. What is the free cash flow? 37. Assume tax rates on single individuals are 10% on taxable income up to $9,075, 15% on income of $9.076 to $36.900 and 25% on income of $36,901 to $89.350. What is the tax liability for a single individual with $52,000 of taxable income? 38. What is the change in cash for a firm with the following: $10,000 cash flow from operations, $1,600 cash used for new investment, a reduction in the level of debt of $2,000, $1.000 in cash dividends, and $200 in depreciation expense? 39. Professor Diehard found an effective antibiotic for the DEPRESS bacteria, and patented the drug. He believes that he can sell the patent for $20 million. He then formed a corporation and invested $400,000 in setting up a production plant. There are 2 million shares of stock outstanding. If the professor's belief is correct, what would be the price per share and the book value per share?
40. According to the Canadian tax code at the beginning of 2019, the highest marginal combined provincial and federal tax rate for personal taxpayers is: 41. Assume a single taxpayer is taxed at 10% on the first $9,075 of taxable income, 15% on the next $27,825 of income, and at 25% for the following $52,450 of income. What is the average tax rate for that individual if her taxable income is $41,350? 42. What is the marginal tax rate for a corporation with $60,000 of taxable income and an average tax rate of 18% if the next-lowest marginal tax rate of 15% covers taxable incomes up t0 $50,000? 43. What are the average and marginal tax rates for a corporation that has $97,648 of taxable income? The tax rates are as follows: Corporate Taxable Income (S) Tax Rate (%) 0-50,000 15 50,001-75,000 25 75,001-100,000 34 50. What is a depreciation expense is used to? 51. Increases to Retained earnings result from? 52. Which one of these will increase a firm's cash balance? 53. Difference between market value of equity and book value of equity? 54. A balance sheet portrays the value of a firm's assets and liabilities at what time 60. Who pays taxes on earnings distributed as dividends? 61. A balance sheet may be considered backward-looking from the perspective of? 66. If a payment of principal is due in 13 months on a long-term liability, that payment will now appear on the balance sheet as: 110. Which of the following statements correctly compares international accounting standards?
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