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FIN Statements T1 Exam Questions and Complete Solutions Graded A+
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FIN Statements T1 Exam Questions and Complete Solutions Graded A+
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FIN Statements T1Exam Questions
and Complete
Solutions Graded
A+
Denning [Date] [Course title]
, An industry having a high degree of competition and low profit margins would be characterized by: -
Answer: Many rivals, few barriers to entry, low switching costs
Acquirer Company buys Target Company. Target's pre-acquisition balance sheet at historical cost
showed Total Assets at $900,000 and Total Liabilities at $300,000. Upon acquisition, Acquirer revalued
Target's identifiable assets at $1,600,000 and liabilities at $360,000. Acquirer paid $2,000,000 in cash for
Target. Determine the amount of Goodwill Acquirer must recognize in the purchase of Target. -
Answer: $760,000
The last possible line item reported on the income statement is: - Answer: Net Income
The ability of diamond miners to dictate price and quantity to jewelry makers and sellers is an example
of: - Answer: Supplier bargaining power
The figure below is a simple income statement. Use the figure to answer questions 5 and 6:
PERIOD ENDING 31-Dec-14 31-Dec-15
Total Revenue 129,184,000 161,480,000
Cost of Revenue 90,428,800 96,888,000
Gross Profit 38,755,200 64,592,000
Operating Expenses
Research & Development 498,000 610,000
Selling General and Administrative 5,948,000 7,538,000
Total Operating Expenses 6,446,000 8,148,000
Operating Income or Loss 32,309,200 56,444,000
5. What was the cost of goods sold for the year ending December 31, 2015. - Answer: $96,888,000
Suppose you want to split the cost of goods sold into a fixed cost and a variable cost. By reading the
footnotes in the 10-K you estimate that the variable part of the cost of goods sold is about 20% of sales
in both 2014 and 2015. Estimate the fixed part of the cost of goods sold for 2014. - Answer:
$64,592,000
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