Mathematics with Business Applications

Chapter 21:

Practice Test

1.
Dotty and Peggy Marks recently opened The Hair Fair. They used $40,000 of their own money and took out a bank loan of $50,000. From the $90,000, they paid $60,000 for equipment and $4,000 for supplies. This left a cash balance of $26,000. They received another shipment of $3,000 worth of merchandise. They did not pay for this merchandise immediately. What was their owner's equity?
A)$7,000.00
B)$26,000.00
C)$40,000.00
D)$90,000.00
2.
The Marks, who recently opened The Hair Fair, used $40,000 of their own money and took out a bank loan of $50,000. They received two shipments of merchandise. They paid cash for the $4,000 shipment. They did not pay immediately for the $3,000 shipment. They also bought equipment for $60,000. This left a cash balance of $26,000. What were liabilities on their balance sheet?
A)$40,000
B)$53,000
C)$60,000
D)$93,000
3.
Kitten Kaboodle began the quarter with an inventory valued at $18,562. During the quarter, it received 864 cases of pet food valued at $10,368 and pet supplies valued at $3,456. The ending inventory was valued at $9,573. What was the cost of goods sold?
A)$22,813
B)$28,930
C)$32,386
D)$48,350
4.
Three months after opening Candy's Sweet Shoppe, Candy Baker prepares an income statement. Sales for the first three months totaled $58,154. There are no returns or allowances. Baker's inventory record shows that the goods she sold cost her $6,870. Records show that her operating expenses totaled $40,320. What is the net income?
A)$6,870
B)$10,964
C)$17,834
D)$58,154
5.
Candy's Sweet Shoppe analyzes its income statement for the quarter. Sales for the first three months totaled $58,154. There are no returns or allowances. Inventory records show that the goods sold cost $6,870. Records show that operating expenses totaled $40,320. To the nearest tenth of a percent, what is the gross profit as a percent of net sales?
A)16.2%
B)17.0%
C)18.4%
D)21.4%
6.
M & P Grocery prepares a quarterly income statement and compares it to the one for the previous quarter. During the first quarter, its net income was $54,678. During the second quarter, its net income was $59,879. Find the percent change from last quarter to this quarter to the nearest tenth of a percent.
A)8.7% decrease
B)8.7% increase
C)9.5% decrease
D)9.5% increase
7.
Three months after opening Hike and Bike, Josh Frank prepares an income statement. Sales for the first three months totaled $57,600. There were $876 in returns. Frank's inventory record shows that the goods he sold cost him $33,720. Records show that his operating expenses totaled $5,750. What is the net income?
A)$17,254
B)$23,880
C)$27,970
D)$56,724
8.
Hike and Bike analyzes its income statement for the quarter. Sales for the first three months totaled $57,600. There were $876 in returns. The inventory record shows that the goods sold cost $33,720. Records show that operating expenses totaled $5,750. To the nearest tenth of a percent, what is the gross profit as a percent of net sales?
A)32.6%
B)34.5%
C)40.6%
D)54.2%
9.
The Steakhouse prepares a quarterly income statement and compares it to the one for the previous quarter. During the first quarter, its net income was $147,564. During the second quarter, its net income was $154,589. Find the percent change from last quarter to this quarter to the nearest tenth of a percent.
A)4.5% decrease
B)4.5% increase
C)4.8% decrease
D)4.8% increase
10.
The Halfpipe began the quarter with an inventory valued at $12,112. During the quarter it received skateboards valued at $8,054 and clothing valued at $5,305. The ending inventory was valued at $10,569. What was the cost of goods sold?
A)$14,902
B)$15,874
C)$25,471
D)$36,040
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