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5. A service company's working capital at the beginning of January of the current year was $70,000. The following transactions occurred during January: Performed services on account $30,000 Purchased supplies on account 5,000 Consumed supplies 4,000 Purchased office equipment for cash 2,000 Paid short-term bank loan 6,500 Paid salaries 10,000 Accrued salaries 3,500 What is the amount of working capital at the end of January? A. $90,000 B. $80,500 C. $50,500 D. $47,500 6. The working capital of Regalado Co. is P600,000 and its current ratio is 3 to 1. The amount of current assets is a. P900,000 b. P1,200,000 c. P600,000 d. P1,800,000 7. Blasso Co.'s net accounts receivable were $500,000 at December 31, 2000 and $600,000 at December 31, 2001. Net cash sales for 2001 were $200,000. The accounts receivable turnover for 2001 was 5.0. What were Blasso's total net sales for 2001? a. $2.950,000 b. $3,000,000 c. $3,200,000 d. $5,500,000 8. During 1989, Rand Co. purchased $960,000 of inventory. The cost of goods sold for 1989 was $900,000, and the ending inventory at December 31, 1989 was $180,000. What was the inventory turnover for 1989? a. 6.4 b. 6.0 c. 5.3 d. 5.0 9. Last year's asset turnover ratio for Wuerffel Airlines was 2.5. This year, sales increased by 20% and average total assets increased by 10%. What is the new asset turnover ratio? A. 2.50 B. 2.59 C. 2.73 D. 3.00 10. The following information pertains to Al Corporation as of and for the year-ended December 31, 19x7. Liabilities P 60,000 Stockholders' equity P 500,000 Shares of common stock issued and outstanding 10,000 Net income P30,000 During 1997, AL officers exercised stock options for 1.000 shares of stock at an option price of P8 per share. What was the effect of exercising the stock option? a. No ratios were affected. c. Debt to equity ratio decreased to 12%. b. Asset turnover increased to 50.4% d. Earnings per share increased by PO.33

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