The Following Items Are Taken from the Financial Statements of the Postal

question 41

Multiple Choice

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: $$\begin{array} { l r } \text { Accounts payable } & \$ 18,000 \\\text { Accounts receivable } & 11,000 \\\text { Accumulated depreciation - equipment } & 28,000 \\\text { Advertising expense } & 21,000 \\\text { Cash } & 15,000 \\\text { Common stock } & 42,000 \\\text { Dividends } & 14,000 \\\text { Depreciation expense } & 12,000 \\\text { Insurance expense } & 3,000 \\\text { Note payable, due 6/30/16 } & 70,000 \\\text { Prepaid insurance (12-month policy) } & 6,000\end{array}$$ $$\begin{array} { l r } \text { Rent expense } & 17,000 \\\text { Retained earnings (1/1/15) } & 60,000 \\\text { Salaries and wages expense } & 32,000 \\\text { Service revenue } & 133,000 \\\text { Supplies } & 4,000 \\\text { Supplies expense } & 6,000 \\\text { Equipment } & 210,000\end{array}$$ What is the company's net income for the year ending December 31, 2015?

• A) $12,000
• B) $28,000
• C) $42,000
• D) $133,000

Understand various financial ratios and their roles in measuring company performance and solvency.

Calculate and assess the times interest earned ratio to analyze a company's ability to meet its interest obligations.

Analyze a company's liquidity through current ratio calculation and understand its significance.

Comprehend the computation and significance of return on total assets, asset turnover, and return on common stockholders' equity.

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Definitions:

Boxplot

A graphical representation used in statistics to show the distribution of numerical data and highlight the mean, median, quartiles, and outliers.

Influential Points

Data points that have a disproportionately large effect on the results of a statistical analysis, potentially skewing the analysis.

Scatterplot

A graphical representation where individual data points are plotted on a two-dimensional plane, showcasing the relationship between two variables.

Precipitation

Any form of water - liquid or solid - falling from the sky, including rain, snow, sleet, and hail.