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D. 3.5 OHW Company's debt to equity ratio is 0.6. Current liabilities are P120,000, long term liabilities are P360,000, and working capital is P140,000. Total assets of the company must be: A. P 600,000 B. P 800,000 C. P1,200,000 D. P1,280,000

D. 3.5 OHW Company's debt to equity ratio is 0.6. Current liabilities are P120,000, long term liabilities are P360,000, and working capital is P140,000. Total assets of the company must be: A. P 600,000 B. P 800,000 C. P1,200,000 D. P1,280,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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P10-1C: MULTIPLE CHOICE - PROBLEMS 1. During the year ELLE Company purchased P400,000 of inventory. The inventory balance at the beginning of the year was P150,000 and the cost of goods sold for the year was P425,000. The inventory turnover for the year was: А. 2.83 В. 2.91 С. 3.09 D. 3.40 2. EM Co.'s budgeted sales and budgeted cost of sales for the coming year are P212,000,000 and P132,500,000 respectively. Short-term interest rates are expected to be 5%. Assume that all inventories must be financed with short-term debt. If EM could increase inventory turnover from its current 8 times per year to 10 times per year, its expected interest cost savings in the current year would be: А. PO B. P81,812 С. P165,625 D. P331,250 3. ENN Corporation has interest expense of P16,000, sales of P600,000, a tax rate of 30%, and after-tax net income of P56,000. What is the firm's times-interest-earned ratio? A. 6.0 В. 5.0 C. 4.5 D. 3.5 4. OHW Company's debt to equity ratio is 0.6. Current liabilities are P120,000, long term liabilities are P360,000, and working capital is P140,000. Total assets of the company must be: А. Р 600,000 P 800,000 C. P1,200,000 D. P1,280,000 В. 5. The accounts receivable for PEA Company was P140,000 at the beginning of the year and P180,000 at the end of the year. The accounts receivable turnover for the year was 8.5 and 15% of total sales were cash sales. The total sales for the year were: A. P1,400,000 В. P1,360,000 P1,600,000 D. P1,800,000 С. 6. The QYU, Inc. has sales of P5 million per year (all credit) and an average collection period of 35 days. What is its average amount of accounts receivable outstanding? C. P150,000 D. P500,000 А. P479,452 В. P142,857 ERSIT TINE
Transcribed Image Text:P10-1C: MULTIPLE CHOICE - PROBLEMS 1. During the year ELLE Company purchased P400,000 of inventory. The inventory balance at the beginning of the year was P150,000 and the cost of goods sold for the year was P425,000. The inventory turnover for the year was: А. 2.83 В. 2.91 С. 3.09 D. 3.40 2. EM Co.'s budgeted sales and budgeted cost of sales for the coming year are P212,000,000 and P132,500,000 respectively. Short-term interest rates are expected to be 5%. Assume that all inventories must be financed with short-term debt. If EM could increase inventory turnover from its current 8 times per year to 10 times per year, its expected interest cost savings in the current year would be: А. PO B. P81,812 С. P165,625 D. P331,250 3. ENN Corporation has interest expense of P16,000, sales of P600,000, a tax rate of 30%, and after-tax net income of P56,000. What is the firm's times-interest-earned ratio? A. 6.0 В. 5.0 C. 4.5 D. 3.5 4. OHW Company's debt to equity ratio is 0.6. Current liabilities are P120,000, long term liabilities are P360,000, and working capital is P140,000. Total assets of the company must be: А. Р 600,000 P 800,000 C. P1,200,000 D. P1,280,000 В. 5. The accounts receivable for PEA Company was P140,000 at the beginning of the year and P180,000 at the end of the year. The accounts receivable turnover for the year was 8.5 and 15% of total sales were cash sales. The total sales for the year were: A. P1,400,000 В. P1,360,000 P1,600,000 D. P1,800,000 С. 6. The QYU, Inc. has sales of P5 million per year (all credit) and an average collection period of 35 days. What is its average amount of accounts receivable outstanding? C. P150,000 D. P500,000 А. P479,452 В. P142,857 ERSIT TINE
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