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1 Intanke Inc. manufactures vacuum cleaners. The following information is available for
the company. Per unit cost Sales $550 Variable expenses
370 The fixed expenses are
$95,000. Calculate the net operating income for 750 vacuum cleaners. A. $135,000 C.
$35,000 D. $40,000 2 Rinetin Corporation has been falsifying its financial
statements for the past year. The staff in the accounting department of the company have
been fake employee IDs and recording payments on the company’s payroll. The funds
sent to these fake employees are then redirected to the company’s bank accounts. When
Rinetin Corporation is audited, the auditors fail to discover this fraud because of their
negligence. Months later, a whistle-blower alerts the appropriate authorities about the
company’s deceptive practices. In this scenario, the accountants who conducted the audit
of the company will be held civilly liable under __________. A.
Section 32(a) of the
Securities Exchange Act of 1934
 B.
Section 24 of the Securities Act of 1933
 C.
Section 11(a) of the Securities Act of 1933 D. Section 10(b) of the Securities
Exchange Act of 1934 3 Jonah’s Restaurant reports net income of $20,000 during the
year 2015. It distributes a dividend of $6,000 to its shareholders. Calculate the retention
ratio. A.
50%
 B.
30%
 C.
80% D.
70% 4 Wilande Inc., a leading
apparel store, acquires Parewa Inc., an energy drink manufacturer. This is an example of
a __________. A. congeneric merger
 B. horizontal merger
 C. conglomerate
acquisition D.
vertical acquisition 5 Gina and Samantha are discussing the
Sarbanes-Oxley Act of 2002. Gina argues that although the act requires the management
of a company to explicitly declare in writing that a company’s financial statements
accurately and fairly represent the financial results, no steps have been taken to ensure
that this rule is followed. Which of the following statements weakens Gina’s argument?
A.
An individual who is employed by a certified public accounting firm that audits a
company can be employed as the CEO or CFO of that company to ensure the fairness of
its financial statements.
 B.
If a company’s financial statements contain
misrepresentations, the CEO and CFO run the risk of serving time in jail.
 C.
The
Sarbanes-Oxley Act prohibits a public company from granting personal loans to any of
its executive officers or directors D.
If a CEO or CFO of a company fails to comply
with the provisions of the act, he or she is subject to a fine up to $10,000 and one year in
jail. 6 Ray is an entrepreneur who has recently started his own venture. Since he does not
have the resources to hire a financial expert, he has to manage the company’s finance in
addition to managing the company. He needs to calculate the working capital of his
business. From the following information, calculate the net working capital. Cash
$20,000 Accounts receivable
12,000 Accounts payable 14,500 Inventory
32,000 Accrued expenses 6,500 A.
$23,000
 B. $49,500
 C. $11,000 D.