Question

1/ The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.:

Net sales	$	10,770
Total assets		4,367
End of year balance in cash		1,023
Total stockholders' equity		396
Gross profit (Sales – Cost of Sales)		2,583
Net increase in cash for the year		15
Operating expenses		2,055
Net operating cash flow		784
Other income (expense), net		(24)

Compute Amazon's total liabilities at the end of the year.

Multiple Choice

• $ 4,367

• $ 4,638

• $ 3,971

• $ 2,203

2/ On November 1, 2018, Tim's Toys borrows $30,300,000 at 8% to finance the holiday sales season. The note is for a six-month term and both principal and interest are payable at maturity. What is the balance of interest payable for the loan as of December 31, 2018?

Multiple Choice

• $202,000.

• $101,000.

• $1,212,000.

• $404,000.

3/ Janson Corporation Co.'s trial balance included the following account balances at December 31, 2018:

Accounts receivable	$13,200
Inventories	40,000
Patent	12,200
Investments	30,500
Prepaid insurance	7,400
Note receivable, due 2021	50,900

Investments consist of treasury bills that were purchased in November, 2018 and mature in January, 2019. Prepaid insurance is for two years. What amount should be included in the current asset section of Janson’s December 31, 2018, balance sheet?

Multiple Choice

• $ 138,300.

• $ 91,100.

• $ 87,400.

• $ 56,900.

4/ The following partial balance sheet ($ in thousands) for Paisano Seafood Inc. is shown below.

Assets				Liabilities and Equity
Current assets:				Current liabilities:
Cash	$	66		Accounts payable	$	226
Accounts receivable (net)		184		Other liabilities		77
Notes receivable		57		Total current liabilities		303
Inventories		213		Long-term liabilities		95
Prepaid expenses		27		Total liabilities		398
Total current assets		547		Shareholders' equity:
Plant assets (net)		269		Capital stock		138
				Retained earnings		280
				Total shareholders' equity		418
Total assets	$	816		Total liabilities and equity	$	816

The current ratio is (Round your answer to two decimal places.):

Multiple Choice

• 0.67.

• 2.03.

• 1.81.

• 1.37.

Answer 1

1
Total assets	4367
Less: Total stockholders' equity	396
Total liabilities	3971
Option 3 $ 3,971 is correct
2
Loan Amount	30300000
X Interest rate	8%
X Time period	2/12
Balance of interest payable as of Dec 31, 2018	404000
Option 4 $404,000. is correct
3
Accounts receivable	13200
Inventories	40000
Investments	30500
Prepaid insurance	3700	=7400/2
Current assets	87400
Option 3 $ 87,400 is correct
4
Total current assets	547
Divide by Total current liabilities	303
Current ratio	1.81
Option 3 1.81 is correct