Fred's Car Repair Service
Selected Data from the Financial

question 59

Multiple Choice

Fred's Car Repair Service
Selected data from the financial statements of Fred's Car Repair Service are provided below.
$\begin{array}{lcc}&2012&2011\\\text { Total stockholders' equity } & \$ 350,000 & \$ 265,000 \\\text { Current liabilities } & 75,000 & 72,000 \\\text { Total liabilities \& stockholders' equity } & 600,000 & 590,000 \\\text { Cash flow from operations } & 250,000 & 190,000 \\\text { Net sales } & 570,000 & 560,000 \\\text { Capital expenditures } & 110,000 & 60,000\end{array}$
- Refer to the selected data provided for Fred's Car Repair Service. Which of the following would result from a vertical analysis of Fred's total stockholders' equity in 2012?

• A) Total stockholders' equity increased $85,000 or 42.08% during 2012.
• B) The total of liabilities & stockholders' equity is $600,000 in 2012.
• C) Total stockholders' equity is 58.33% of total liabilities & stockholders' equity in 2012.
• D) Total stockholders' equity is 35.67% of total assets in 2012.

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Definitions:

Corporate Office

The main office or headquarters of a corporation where key administrative and executive activities are conducted.

Common Fixed Expenses

Common fixed expenses are overhead costs shared across multiple segments or products of a business, like administrative salaries or building rent.

Break-Even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain.

Sales Dollars

The total revenue generated from selling goods or services, measured in dollars.