Max's Tire Center Company

question 54

Multiple Choice

Max's Tire Center Company
Selected data from the financial statements of Max's Tire Center are provided below.

-Refer to the selected data provided for Max's Tire Center. Which of the following would result from a vertical analysis of Max's income statement in 2012?

• A) Depreciation expense increased $3,000 or 7.14% during 2012.
• B) Depreciation expense is $45,000 in 2012.
• C) Depreciation expense is 12.16% of total assets in 2012.
• D) Depreciation expense is 12.16% of total sales in 2012.

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Definitions:

Foreclosure Proceeding

A legal process by which a lender seeks to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.

Redeem

To recover possession of something by paying a specified amount, or to fulfill a promise or obligation.

Default

Failure to fulfill an obligation, especially failure to meet a financial commitment or appear in a court of law.

Prepayment Penalty Clause

A provision in a contract that imposes a penalty on a borrower for paying off a loan before its maturity date.