Financial Statements for Orantes Company Appear Below Total Dividends During Year 2 Were

question 26

Multiple Choice

Financial statements for Orantes Company appear below:

$\begin{array}{|l|r|}\hline&\text { Orange Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline\text { Sales (All on Account) } & \$ 2510 \\\hline \text { Costs of Goods Sold } & \$ 1750 \\\hline \text { Gross Margin } & \$ 760 \\\hline \text { Operating Expenses } & \$ 300 \\\hline \text { Net Operating Income } & \$ 460 \\\hline \text { Interest Expense } & \$ 30 \\\hline \text { Net Income before Taxes } & \$ 430 \\\hline \text { Income Taxes (30\%) } & \$ 129 \\\hline \text { Net Income } & \$ 301\\\hline\end{array}$

Total dividends during Year 2 were $\$ 181,000$ , of which $\$ 12,000$ were preferred dividends. The market price of a common share on December 31, Year 2 was $\$ 280$ .
-Orantes Company's current ratio at the end of Year 2 was closest to which of the following?

• A) 0.35 to 1.
• B) 0.54 to 1.
• C) 1.19 to 1.
• D) 1.50 to 1.

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Definitions:

Compliance Audit

An assessment to ensure that an organization adheres to regulatory guidelines.

Fraudulent Billing

The act of intentionally billing for medical services that were not provided or billing for services at a higher rate than is appropriate.

Patient Records

Documents that contain a comprehensive history of a patient's medical background and treatment.

Dated

Indicative of a time that has passed or something outdated in style or technology.