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  3. part a: a high quality of earnings is indicated by

Part A: A high quality of earnings is indicated by: Declaration of both cash and stock dividends A...

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Accounting

Part A:

A high quality of earnings is indicated by:

Declaration of both cash and stock dividends

A history of increasing earnings and conservative accountingmethods

Earnings derived largely from newly introduced products

Use of FIFO method of inventory during sustained inflation.

Part B:

The Horseshoe Company has cash of $50,000 accounts receivable of$100,000; inventory of $250,000, prepaid insurance of $200,000 andcurrent liabilities of $300,000. What is their working capital?

$600,000

$300,000

2.0

1.33

Part C:

In evaluating the quality of a company's earnings, which of thefollowing factors is LEAST important?

the accounting methods used by management

the trend of the company's earnings over a period of years

the dollar amount of earnings per share

the stability and sources of the company's earnings

Answer & Explanation Solved by verified expert
4.1 Ratings (543 Votes)
Answer Part A Correct answer is A history of increasing earnings and conservative accounting methods Explanation Companys accounting method and past record of consistently increasing earnings is an indicator of high quality earning Declaration of    See Answer
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