Reference no: EM132572580

Question 1: ABC Inc. has current liabilities of $30 million. Cash makes up 10 percent of the current assets and accounts receivable makes up another 40 percent of current assets. If ABC's current ratio = 2.1 times. Calculate the value of inventory listed on the firm's balance sheet.

Option 1: $31.5m.

Option 2: $15.75m.

Option 3: $41.75

Option 4: $23.2m.

Smith Company had the following on the dates indicated:

                               12/31/16                  12/31/15

Total assets                  $ 560,000                 $330,000

Total liabilities                   35,000                     25,000

Question 2: Smith had no stock transactions in 2016; thus, the change in stockholders' equity for 2016 was due to net income and dividends. If dividends were $70,000, how much was Smith's net income for 2016?

Option 1: $360,000

Option 2: $220,000

Option 3: $290,000

Option 4: $150,000