20. Pina Colada Corp. had net income of $120200 and paid dividends of


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20. Pina Colada Corp. had net income of $120200 and paid dividends of $36500 to common stockholders and $24000 to preferred stockholders in 2017. Pina Colada Corp. common stockholders’ equity at the beginning and end of 2017s was $480000 and $560000, resp

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20. Pina Colada Corp. had net income of $120200 and paid dividends
of $36500 to common stockholders and $24000 to preferred stockholders in 2017. Pina Colada Corp. common stockholders’ equity at the beginning and end of 2017s was $480000 and $560000, respectively. Pina Colada Corp. return on common stockholders’ equity is

a) 18%.

b) 14%.

c) 23%.

d) 19%.
23.The category that is generally considered to be the best measure of a company's ability to continue as a going concern is



a) cash flows from financing activities.

b) usually different from year to year.

c) cash flows from operating activities.

d) cash flows from investing activities.


24. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, a stock dividend declared and issued would be classified on the statement of cash flows.


a) Does not represent a cash flow.

b) Operating activities section.

c) Financing activities section.

d) Investing activities section.

25. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, an inventory increase with cash would be classified on the statement of cash flows.



a) Financing activities section.

b) Operating activities section.

c) Investing activities section.

d) Does not represent a cash flow.


26. Free cash flow provides an indication of a company’s ability to



a) generate cash to invest in capital expenditures and to pay dividends.

b) generate cash to pay dividends.

c) generate cash to invest in capital expenditures.

d) generate net income.

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