Questions:
1. Watins, Inc.'s 2011 income statement reported net sales of $5,000,000. Watin's average accounts receivable during 2011 amounted to $450,000. Using 360 days to a year, Watin's:
A) Accounts receivable turnover rate is approximately 2 times.
B) Accounts receivable turnover rate is approximately 13.8 times.
C) Average number of days to collect an account receivable is 32 days.
D) Accounts receivable turnover rate is approximately 1.25 times.
2. During the year 2009, Tosco Corporation suffered an $800,000 loss when its factory was destroyed in a flood. Assuming the corporate income tax rate is 36%, what amount will Tosco report as an extraordinary loss on its income statement for 2009? Assume floods are not common in this area.
A) $512,000.
B) $288,000.
C) $800,000.
D) Nothing, since this does not qualify as an extraordinary item
3. Topper Corporation has 60,000 shares of $1 par value common stock and 16,000 shares of cumulative 7%, $100 par preferred stock outstanding. Topper has not paid a dividend for the prior year. If Topper declares a $1.95 per share dividend this year, what will be the total amount they must pay their shareholders?
A) $341,000.
B) $327,000.
C) $117,000.
D) $177,000.