Selected Financial Data of Alexander Corporation for the Year Ended

question 35

Multiple Choice

Selected financial data of Alexander Corporation for the year ended December 31, 2011, is presented below:

Common stock dividends were $120,000. The times-interest-earned ratio is

• A) 2.8 to 1.
• B) 4.8 to 1.
• C) 6.0 to 1.
• D) 9.0 to 1.

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated for use in financial reporting and inventory management.

FIFO Cost Assumption

"First-In, First-Out," an inventory costing method that assumes the first items put into inventory are the first ones sold, affecting the calculation of cost of goods sold and ending inventory.

Perpetual

A system or inventory accounting method where updates are made continuously to record every sale or purchase.

Periodic Inventory System

An inventory system under which the company does not keep detailed inventory records throughout the accounting period but determines the cost of goods sold only at the end of an accounting period.