CUNY Lehman College Accounting Based Evaluations Exam Practice

1. Indicate whether each of the following companies is primarily a service, merchandising, or manufacturing business. If you are unfamiliar with the company, you may use the Internet to locate the company’s home page or use the finance Web site of Yahoo.com.

1. AFLAC (AFL)
2. Best Buy (BBY)
3. Boeing (BA)
4. Caterpillar (CAT)
5. Citigroup (C)
6. CVS Health Corp. (CVS)
7. DowDuPont Inc. (DWDP)
8. Exxon Mobil (XOM)
9. Facebook (FB)
10. Ford Motor (F)
11. General Electric (GE)
12. Hilton Hotels
13. H&R Block Inc. (HRD)
14. Oracle (ORCL)
15. Target (TGT)

2. Identify the primary business emphasis of each of the following companies as (a) a low-cost emphasis or (b) a premium-price emphasis. If you are unfamiliar with the company, you may use the Internet to locate the company’s home page or use the finance Web site of Yahoo.com.

1. Allegiant Travel Services (ALGT)
2. Best Buy (BBY)
3. BMW
4. Dollar Tree (DLTR)
5. E*TRADE (ETFC)
6. Goldman Sachs Group (GS)
7. Lowe’s (LOW)
8. Nike (NKE)
9. Pepsi Co, Inc. (PEP)
10. Staples
11. Sub-Zero
12. Mercedes-Benz

3. The total assets and total liabilities for a recent year of Best Buy (BBY) and Gamestop (GME) are shown below.

	Best Buy (in millions)	Gamestop (in millions)
Assets	$13,856	$4,976
Liabilities	9,147	2,722

Determine the stockholders’ equity of each company.

Best Buy	$ million
Gamestop	$ million

4. Determine the missing amount for each of the following:

	Assets	=	Liabilities	+	Stockholders’ Equity
a.	$	=	$262,500	+	$450,000
b.	$1,320,000	=	$	+	$787,500
c.	$3,150,000	=	$900,000	+	$

5. Staples, Inc. (SPLS) is a leading office products distributor, with retail stores in the United States, Canada, Asia, Europe, and South America. The following financial statement data were adapted from recent financial statements of Staples:

1. 	Year 2 (in millions)		Year 1 (in millions)
   Total assets	$8,271		$10,172
   Total liabilities	(1)		4,788
   Total stockholders’ equity	3,696		(2)
   Sales	18,247
   Cost of goods sold	13,489
   Operating expenses	4,967
   Other expense (net)	143
   Income tax expense	107

   Enter all amounts as positive numbers.a. Determine the missing data indicated for (1) and (2).

   Total liabilities for Year 2	$millions
   Total stockholders’ equity for Year 1	$millions

   b. Using the income statement data for Year 2, determine the amount of net income or net loss.
   $millions

6. JLM Services was organized on August 1, 20Y5. A summary of the revenue and expense transactions for August follows:

1. Fees earned	$2,550,000
   Wages expense	1,612,500
   Miscellaneous expense	41,250
   Rent expense	240,000
   Supplies expense	22,500

   Prepare an income statement for the month ended August 31.

   JLM Services
   Income Statement
   For the Month Ended August 31, 20Y5
   		$
   Operating expenses:
   	$
   Total operating expenses
   		$

   7. Pfizer Inc. (PFE) discovers, produces, and distributes medicines, including Celebrex and Lipitor. Ford Motor Co. (F) develops, markets, and produces automobiles and trucks. Microsoft Corporation (MSFT) develops, produces, and distributes a variety of computer software and hardware products including Windows, Office, Excel, and the Xbox.1. The following data (in millions) were taken from recent financial statements of each company:

2. 		Pfizer		Ford		Microsoft
   Net income		$21,308		$7,628		$21,204
   Total assets at the beginning of the year		171,615		237,951		193,468
   Total assets at the end of the year		171,797		257,808		241,086

   Compute the return on assets for each company using the preceding data, and rank the companies’ return on assets from highest to lowest. Round the return on assets to one decimal place.

   	Return on assets	Rank
   Pfizer	%
   Ford	%
   Microsoft	%

   2. All of the following statements regarding the rate of return on asset rankings for Microsoft, Pfizer, and Ford are true except:

   1. Microsoft has the highest return on assets.
   2. Ford has the lowest return on assets.
   3. Microsoft has been challenged by competitors such as Alphabet (Google).
   4. Pfizer has the highest return on assets.

   Choose the correct answer:

8. ExxonMobil Corporation (XOM) explores, produces, and distributes oil and natural gas. The Coca-Cola Company (KO) produces and distributes soft drink beverages, including Coke. WalMart Stores, Inc. (WMT) operates retail stores and supermarkets.

1. The following data (in millions) were taken from recent financial statements of each company:

		ExxonMobil		Coca-Cola		WalMart
Net income		$19,710		$1,248		$10,523
Total assets at the beginning of the year		330,314		87,270		198,825
Total assets at the end of the year		348,691		87,896		204,572

Compute the return on assets for each company using the preceding data, and rank the companies’ return on assets from highest to lowest. Round the return on assets to one decimal place.

	Return on Assets	Rank
ExxonMobil	%
Coca-Cola	%
WalMart	%

2. All of the following statements regarding the rate of return on assets rankings for ExxonMobil, WalMart, and Coca-Cola are true except:

1. ExxonMobil has the highest rate of return on assets due to the high demand for petroleum-based products.
2. WalMart and Coca-Cola have approximately the same rates of return on assets primarily.
3. Coca-Cola has the lowest rate of return since it’s operating in a highly competitive market, as well as the increased demand by consumers for healthy beverage alternatives.
4. ExxonMobil’s operations have the most risks.

Choose the correct answer:

9. Tiffany & Co. (TIF) designs and sells jewelry including rings, watches, and necklaces throughout the world. The following data (in millions) were taken from recent financial statements of Tiffany:

Net income		$ 370
Total assets at the beginning of the year		5,098
Total assets at the end of the year		5,468

1. Compute the return on assets for Tiffany using the preceding data. Round to one decimal place.

%

9. Tiffany & Co. (TIF) designs and sells jewelry including rings, watches, and necklaces throughout the world. The following data (in millions) were taken from recent financial statements of Tiffany:

Net income		$ 370
Total assets at the beginning of the year		5,098
Total assets at the end of the year		5,468

1. Compute the return on assets for Tiffany using the preceding data. Round to one decimal place.

%

2. Assume WalMart’s return on assets is 5.2%. Complete the statements below regarding the comparison of the return on assets for WalMart to that of Tiffany.

Tiffany’s return on assets is ________ Walmart’s return on assets. This reflects Tiffany’s _______ that allows it to sells its products at ______ prices and markups. In contrast, WalMart operates in a highly competitive market with a _______.