Please answer 4-6 only and show solutions. Thank you! P10-1C: MULTIPLE CHOICE - PROBLEMS1. During the year ELLE Company purchased P400,000 of inventory. The inventory balance at the beginning of theyear was P150,000 and the cost of goods sold for the year was P425,000. The inventory turnover for the yearwas:А. 2.83В. 2.91С. 3.09D. 3.402. EM Co.'s budgeted sales and budgeted cost of sales for the coming year are P212,000,000 and P132,500,000respectively. Short-term interest rates are expected to be 5%. Assume that all inventories must be financedwith short-term debt. If EM could increase inventory turnover from its current 8 times per year to 10 times peryear, its expected interest cost savings in the current year would be:А.POB. P81,812С.P165,625D. P331,2503. ENN Corporation has interest expense of P16,000, sales of P600,000, a tax rate of 30%, and after-tax net incomeof P56,000. What is the firm's times-interest-earned ratio?A. 6.0В. 5.0C. 4.5D. 3.54. 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 600,000P 800,000C. P1,200,000D. P1,280,000В.5. The accounts receivable for PEA Company was P140,000 at the beginning of the year and P180,000 at the endof the year. The accounts receivable turnover for the year was 8.5 and 15% of total sales were cash sales. Thetotal sales for the year were:A. P1,400,000В.P1,360,000P1,600,000D. P1,800,000С.6. The QYU, Inc. has sales of P5 million per year (all credit) and an average collection period of 35 days. What isits average amount of accounts receivable outstanding?C. P150,000D. P500,000А.P479,452В.P142,857ERSITTINE

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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

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Chapter18: Accounting Periods And Methods

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Question

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Please answer 4-6 only and show solutions. Thank you!

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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