Financial Statements Recap

Here is some financial data for a company for a particular year. Sales, $800,000; Cost of Good Sold, $300,000; Income Tax Expense $80,000; Selling General and Administrative Expense, $250,000; Interest Expense, $20,000; What is the company's operating profit (also called operating income,  or earnings before interest and taxes)?

The stockholders' equity section of a firm's balance sheet reflects the following:  Common stock $30,000;  Retained earnings  $100,000; Total stockholders' equity $130,000 What amount of its profits has the company reinvested back into the company during its existence?

Place these assets in order from least liquid to most liquid.

• A.

  Inventory, accounts receivable, equipment

• B.

  Accounts receivable, inventory, equipment

• C.

  Equipment, inventory, accounts receivable

• D.

  equipment, accounts receivable, inventory

Liabilities can best be described as

• A.

  Funding provided by lenders

• B.

  Funding provided by shareholders

• C.

  Resources owned by a business

• D.

  Profits reinvested in the business

Generally, current assets on the balance sheet are expected to turn into cash

• A.

  Within a year

• B.

  Within 90 days

• C.

  Within 60 days

• D.

  Within 30 days