Answer:
$ 926,072.80
Explanation:
The company's market capitalization can be computed using the price-earnings ratio of 11.8.
Net income(earnings after tax)=sales* profit margin=$697,000*6.8%=
$ 47,396.00
P/E ratio=market capitalization/net income
11.8=market capitalization/$ 47,396.00
market capitalization=11.8*$47,396.00
market capitalization=$ 559,272.80
Enterprise value=market capitalization+debt-cash
enterprise value=$ 559,272.80+$408,000.00-41,200=$ 926,072.80
The Blaine Development Corporation (BDC) is reconsidering the Lummi Resort Hotel project. It would be located on the picturesque banks of Birch Bay and have its own championship-level golf course. The cost to purchase the land would be $1 million, payable immediately. Construction costs would be approximately $2 million, due at the end of year 1. However, the construction costs are uncertain. These costs could be up to 20 percent higher or lower than the estimate of $2 million with an equal chance (uniform distribution). BDC’s best estimate for the annual operating profit to be generated in years 2, 3, 4, and 5 is $700,000. Due to the great uncertainty, the estimate of the standard deviation of the annual operating profit in each year also is $700,000. Assume that the yearly profits are statistically independent and follow the normal distribution. After year 5, BDC plans to sell the hotel. The selling price is likely to be somewhere between $4 and $8 million (assume a uniform distribution), and revenue will be received in year 5. Interest has been r = 5% (and you can ignore inflation), so you can simplify your net present value (NPV) calculation to be
NPV = summation of [ (pi(t)-c(t)) / ( (1-r)^t )] where t varies from 0 to 5
where pi(t) is operating profit and ct is cost of land and construction, both in period t. Simulate the NPV 1000 times. What is the mean and standard deviation of the NPV of the project?
Answer:
I can't help you sorry
Explanation:
I don't know what any of this means
Liu Electronics budgeted sales of $400,000.00 for the month of November and cost of goods sold equal to 65 percent of sales. Beginning inventory was $80,000.00 and ending inventory is estimated at $72,000.00. The budgeted purchases for November are:________
Answer:
Purchases= $252,000
Explanation:
Giving the following information:
Sales= $400,000
Cost of goods sold equal to 65 percent of sales.
Beginning inventory= $80,000
Ending inventory= $72,000
To calculate the purchase required, we need to use the following formula:
Purchases= sales + desired ending inventory - beginning inventory
Purchases= (400,000*0.65) + 72,000 - 80,000
Purchases= $252,000
A new equipment has been proposed by engineers to increase the productivity of a welding operation of a local fabrication plant. The investment cost is $25,000, and the equipment will have a market value of $5,000 at the end of a study period of five years. Increased productivity attributable to the equipment will amount to $10,000 per year after operating costs have been subtracted from the revenue generated by the additional production. If MARR is 12%, is investing in this equipment feasible
Answer:
NPV =$13,884.89
Investing the the equipment id feasible because it has a positive NPV, thus implies that it will increase the wealth of the company by $13,884.8963
Explanation:
The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
Initial cost = 25,000
Present value of the cash inflow
PV of annuity= 1 -(1+r)^(-n)/r × Annual cash flow
A-10,000, r- 12%, n- 5
PV of annual cash inflow = 10,0000× (1- (1.12^(-5)/0.12=36,047.762
Present Value of Scrap value
PV = S×× (1+r)^(-n)
S- scrap value , n- 5, r 12%
PV of scrap Value = 5,000 × (1.12)^(-5)= 2,837.13
NPV= 36047.76202+ 2837.134279 - 25,000= 13,884.89
NPV =$13,884.89
Investing the the equipment id feasible because it has a positive NPV, thus implies that it will increase the wealth of the company by $13,884.8963
"A long time customer has purchased securities in a margin account and is experiencing a temporary cash shortfall. The customer tells the registered representative that he cannot pay on settlement; and the registered representative offers to lend the customer the necessary funds. This action is:"
Answer: Prohibited.
Explanation:
The Financial Industry Regulatory Authority (FINRA) frowns upon the action described above.
FINRA strongly prohibits the personal borrowing of money by the representative to a customer or vice versa. The only time this prohibition can be waved is if the parties are married or family.
Seeing as there was no mention of the parties being family, this action is prohibited.
Operating data for Swifty Corporation are presented below. 2022 2021Sales revenue $830,700 $634,900 Cost of goods sold 529,000 415,000 Selling expenses 124,700 73,600 Administrative expenses 78,800 53,900 Income tax expense 33,500 23,400 Net income 64,700 69,000 Prepare a schedule showing a vertical analysis for 2022 and 2021. (Round percentages to 1 decimal place, e.g. 12.1%.)
Answer and Explanation:
The preparation of the vertical analysis is presented below:
Particulars Amount % Amount %
Sales $830,700 100 $634,900 100
Less:
Cost of goods sold $529,000 63.7 $415,000 65.4
Gross Profit $301,700 36.3 $219,900 34.5
Less:
Selling Expenses $124,700 15.0 $73,600 11.6
administrative expenses $78,800 9.5 $53,900 8.5
Total Operating
expenses $203,500 24.5 $127,500 20.9
Income before
income taxes $98,200 11.8 $92,400 14.5
Less:
Income tax expenses $33,500 4.0 $23,400 3.7
Net Income $64,700 7.8 $69,000 10.8
Working note
The percentage is like
= Items value ÷ sales × 100
Like for cost of goods sold
= $529,000 ÷ $830,700 × 100
= 63.68%
It is same applicable for other items also
Companies Heidee and Leaudy are virtually identical in that they are both profitable, and they have the same total assets (TA), Sales (S), return on assets (ROA), and profit margin (PM). However, Company Heidee has the higher debt ratio. Which of the following statements is CORRECT?
a. Company Heidee has a lower operating income (EBIT) than Company LD
b. Company Heidee has a lower total assets turnover than Company Leaudy.
c. Company Heidee has a lower equity multiplier than Company Leaudy.
d. Company Heidee has a higher fixed assets turnover than Company Leaudy.
e. Company Heidee has a higher ROE than Company Leaudy.
Answer:
e. Company Heidee has a higher ROE than Company Leaudy.
Explanation:
Return on equity measures how well the management of a business uses owner's equity to get returns. It is calculated by dividing net income by owner's equity.
That is
ROE= Net Income ÷ Owner's equity
Considering the accounting equation
Asset= Liability + Owner equity
Owner equity= Asset - Liability
From the equation when a company that take on more debt owner's equity will reduce.
The effect of reduction in owner's equity on Return on Equity is that it will increase the ratio, since owner's equity is the denominator.
In this scenario both companies have the same profit margin so if company Heidee has higher debt ratio it follows that it also has a higher ROE than Company Leaudy
Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Debit Credit a. Interest revenue $ 14,500 b. Depreciation expense—Equipment $ 34,500 c. Loss on sale of equipment 26,350 d. Accounts payable 44,500 e. Other operating expenses 106,900 f. Accumulated depreciation—Equipment 72,100 g. Gain from settlement of lawsuit 44,500 h. Accumulated depreciation—Buildings 175,500 i. Loss from operating a discontinued segment (pretax) 18,750 j. Gain on insurance recovery of tornado damage 29,620 k. Net sales 1,003,500 l. Depreciation expense—Buildings 52,500 m. Correction of overstatement of prior year’s sales (pretax) 16,500 n. Gain on sale of discontinued segment’s assets (pretax) 36,500 o. Loss from settlement of lawsuit 24,250 p. Income tax expense ? q. Cost of goods sold 487,500 Assume that the company’s income tax rate is 40% for all items. Compute the tax effects and after-tax amounts of the three items labeled pretax. 2a. What is the amount of income from continuing operations before income taxes? 2b. What is the amount of the income tax expense? 2c. What is the amount of income from continuing operations?
Answer:
2a) 330,500
2b) 132,200
2c) 198,300
Explanation:
Loss from operating a discontinued segment (pretax) 18,750
Correction of overstatement of prior year’s sales (pretax) 16,500
Gain on sale of discontinued segment’s assets (pretax) 36,500
Analyze the events chronologically, one transaction at a time, beginning with the transaction on the 5th. For each transaction that follows the transaction on the 5th, calculate the balance in each account after analyzing its effect on the accounting equation. After calculating the ending balance of each account on the 30th,
calculate total assets and total liabilities and equity.(Complete only the necessary answer boxes for your transaction lines. [Do not enter any zeros for your transaction lines.] Carry down all balances to the "Bal." line, including zero balanceaccounts, entering a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses. Abbreviationsused: A/P = Accounts Payable; A/R = Accounts Receivable; Com.= Common; Contr. = Contributed; Div. = Dividends; Exp. = Expense; Furn. = Furniture; Liab = Liabilities; Rev. = Revenue; Sup. = Supplies; Util. = Utilities.)
QUESTION COMPLETION:
TRANSACTIONS:
April 5 Shaff deposited $40,000 in a new business bank account titled Apr. Abraham Shaff, CPA. The business issued common stock to Shaff.
April 6 Paid $200 cash for letterhead stationery for new office
April 7 Purchased office furniture for the office on account, $8,000.
April 10 Consulted with tax client and received $2,900 for services rendered. 11 Paid utilities, $280.
April 12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, $8,000.
April 18 Paid office rent, $1,700.
April 25 Received amount due from client that was billed on April 12
April 27 Paid full amount of accounts payable created on April 7
April 30 Cash dividends of $2,500 were paid to stockholders.
Answer:
See attached.
Explanation:
The question requires business events to be analyzed chronologically with each event's impact on the accounting equation.
The accounting equation states that Assets equal Liabilities plus Equity (Assets = Liabilities + Equity). The implication of this equation is that given each business transaction, Assets will always be equal to Liabilities and Equity. Two accounts or more are usually affected by each transaction. It may be two assets accounts or one asset and liabilities, etc. Expenses and Income impact the Retained Earnings, which is part of the Equity.
Assets are the resources owned by the business, while liabilities are financial obligations to third parties that contribute to the owned resources. Equity is the funds contributed by the stockholders, including the earnings retained from business. Equity, therefore, represents the ownership interest in the assets after liabilities have been deducted.
The year-end 2009 balance sheet for Tom's Copy, Inc. lists common stock ($1.00 par value) of $ 5,870 , capital surplus of $ 17,290 and retained earnings of $ 47,076 . On the 2010 year-end balance sheet, retained earnings are listed as $ 50,350 . The firm's net income in 2010 was $ 9,811 . No stock was issued or repurchased in 2010. What were dividends per share paid by the firm in 2010
Answer:
$1.11 per share
Explanation:
For computing the dividend per share first we have to determine the dividend by applying the following formula
Amount of dividend = Beginning balance of retained earnings + Net Income - Ending balance of retained earnings
= $47,076 + $9,811 - $50,350
= $6,537
And, the number of shares is
= $5,870 ÷ $1 par
= 5,870 shares
So, the Dividend per share is
= Dividend ÷ number of shares
= $6,537 ÷ 5,870 shares
= $1.11 per share
Boren Company reported the following information for the current year: Sales (625 units) $37,800, direct materials and direct labor $14,600, other variable costs $13,200, and fixed costs $6,000. "What is the company's break-even point in units?"
Answer:
Break-even point in units= 375 units
Explanation:
Giving the following information:
Sales (625 units) $37,800
direct materials and direct labor $14,600
other variable costs $13,200
fixed costs $6,000.
To calculate the break-even points in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Unitary selling price= 37,800/625= $60.48
Unitary varaible cost= (13,200 + 14,600)/625= $44.48
Break-even point in units= 6,000/ (60.48 - 44.48)
Break-even point in units= 375 units
Using a method of trend projection, the monthly sales for Yazici Batteries, Inc., were as follows: Month Sales Feb 21 Jan 20 Mar 15 Apr 15 May 13 Jun 16 Jul 17 Aug 17Sept 20Oct 22 Nov 23 Dec 23The forecast for the next month (Jan) using the naive method =_____sales. The forecast for the next period Jan using a 3 month moving average approach =_____sales. The forecast for the next period Jan using a 6 month weighted average with weights of 0.10, 0.10, 0.10, 0.20, 0.20 and 0.30, where the heaviest weights are applied to the most recent month =_____sales. Using exponential smoothing with α = 0.35 and a september forecast of 20.00, hte forecast for the next period Jan =_____sales. Using a method of trend projection, the forecast for the next month Jan =_____sales. The method that can be used for making a forecast for the month of March is_____.
Answer:
the answer is C or b im not 100% sure
Common stocks typically have which of the following that bonds do NOT have?
I. Voting rights
II. Fixed cash flows
III. Set maturity date
IV. Tax deductibility of cash flows to investors
a) i only
b) i,ii and iv only
c) ii,iii and iv only
d) iv only
e) i, ii,iii and iv
Answer:
The correct option is A, i only
Explanation:
The voting right attached to common stock means that common stockholders being the original owners of the company have the right to attend the company annual general meetings and vote on issues concerning the efficient running of the company as well as election of board of directors.
Fixed cash flows of annual or semiannual coupon interest, set maturity date including the tax deductibility of cash flows to investors are all features of bonds.
On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $264,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $24,000. On March 1, 2021, the truck was sold for $115,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service.Required: 1. Prepare the journal entry to update depreciation in 2021 2. Prepare the journal entry to record the sale of the truck. 3. Assuming that the truck was instead sold for $141,000, prepare the journal entry to record the sale.
Answer:
1.
1 March 2021
Depreciation expense $5000 Dr
Accumulated depreciation-Delivery truck $5000 Cr
2.
1 March 2021
Accumulated depreciation-Delivery truck 140000 Dr
Cash 115000 Dr
Loss on Disposal 9000 Dr
Delivery Truck 264000 Cr
3.
1 March 2021
Accumulated depreciation-Delivery truck 140000 Dr
Cash 141000 Dr
Delivery Truck 264000 Cr
Gain on disposal 17000 Cr
Explanation:
1.
Depreciation expense is the systematic allocation of an asset's cost over its estimated useful life.
The straight line method of depreciation charges a constant depreciation expense each period. The formula for depreciation expense per period under this method is,
Depreciation expense = (Cost - Residual value) / Estimated useful life of the asset
The depreciation expense per year of delivery truck under this method will be,
Depreciation expense per year = (264000 - 24000) / 8 = $30000 per year
The depreciation expense to be charged in 2021 will be for 2 months.
Depreciation expense 2021 = 30000 * 2/12 = $5000
2.
The accumulated depreciation of truck on 1 March 2021 is,
Depreciation for 6 months of 2016 = 30000 * 6/12 = $15000
Depreciation for 4 years (2017 to 2020) = 30000 * 4 = $120000
Depreciation for 2 months of 2021 = $5000
Accumulated depreciation at 1 March 2021 = 15000 + 120000 + 5000
Accumulated depreciation at 1 March 2021 = $140000
Net Carrying value of asset = 264000 - 140000 = $124000
Loss on disposal as asset is sold for less than its carrying value is,
loss on disposal = 115000 - 124000 = - $9000 (loss on disposal)
3.
As the asset is sold for more than its carrying value, the gain on disposal is,
Gain on disposal = 141000 - 124000 = $17000 (gain on disposal)
Betterton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs—equipment depreciation and supervisory expense-are allocated to three activity cost pools—Machining, Order Filling, and Other—based on resource consumption. Data to perform these allocations appear below:
Overhead costs:
Equipment depreciation $ 49,000
Supervisory expense $ 3,000
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation 0.50 0.30 0.20
Supervisory expense 0.10 0.40 0.50
In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity: Activity:
MHs (Machining) Orders (Order Filling)
Product A8 3,000 500
Product K2 17,000 1,500
Total 20,000 2,000
What is the overhead cost assigned to Product A8 under activity-based costing?
Answer:
$7,695
Explanation:
The computation of overhead cost assigned to Product A8 under activity-based costing is shown below:-
Overhead Amount Machining Amount Order Amount Other Amount
Filling
Equipment
Depreciation $49,000 0.5 $24,500 0.3 $14,700 0.2 $9,800
Supervisory
Expense $3,000 0.1 $300 0.4 $1,200 0.5 $1,500
Total $52,000 $24,800 $15,900 $11,300
Cost per Activity pool unit
Particulars Machining Order Filling Allocated Cost a $24,800 $15,900
Activity b 20,000 hours 2,000 order Fillings Cost per Activity pool unit 1.24 7.95
c = a ÷ b per machine Hour per order fillings
Here, in reference to Product A8
Machine Hours 3,000
Cost per Activity pool unit 1.24 per Machine Hour
Total Cost 3,720
To reach total cost we simply multiply the machine hours with cost per activity pool unit
Order Filling 500
Cost per Activity pool unit 7.95 per order fillings
Total Cost 3,975
To reach total cost we simply multiply the order filling with cost per activity pool unit
Total Overhead cost assigned to Product A8 = Total cost of machine hours + Total cost of order filling
= $3,720 + $3,975
= $7,695
The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15% 20% 0.4 9 5 0.3 18 12 a. Calculate the expected rates of return for the market and Stock J. b. Calculate the standard deviations for the market and Stock J.
Answer: The answer is provided below
Explanation:
The expected rates of return for the market = 13.5
the expected rates of return for the market and Stock J = 11.6
The standard deviations for the market = 3.85
The standard deviations for Stock J = 6.22
The explanation has been attached.
Walkers World Company gathered the following information for 2019:
Total sales revenue (65% on credit) $432,000
Cost of goods sold 231,000
Sales returns and allowances (on credit) 44,000
Accounts receivable at end of 2019 ($30,000
increase during 2019) 100,000
Allowance for doubtful accounts:
Beginning of 2019 5,000
End of 2019 7,000
Merchandise inventory at end of 2019 ($10,000
decrease during 2019) 28,000
Assume 365 days in the year.
Calculate each of the following ratios.
A. Receivable turnover ratio.
B. Average age of receivables.
C. Inventory turnover ratio.
D. Average number of days' supply in inventory
Answer:
A. Receivable turnover ratio. = 4.57 times
B. Average age of receivables. 94.07 days
C. Inventory turnover ratio. 7 times
D. Average number of days' supply in inventory = 633 days
Explanation:
Net Sales $ 388,000
Sales revenue (65% on credit) $432,000
Less Sales returns and allowances (on credit) 44,000
Average Accounts Receivable = Accounts Rec (beg) Accounts Rec (end)/2
= 70,000+ 100,000/2= $85,000
A. Receivable turnover ratio.
Receivable turnover ratio= Net Sales / Average Accounts Receivable
= 388,000/ 85,000= 4.5647= 4.565= 4.57 times
A high turnover ratio is favorable because the accounts receivable are quickly collected.
B. Average age of receivables.
Average age of receivables= Accounts receivable *365/ Sales
= 100,000* 365/388,000= 365,000,00/388,000= 94.07 days
Accounts receivable will be collected in 94 days.
C. Inventory turnover ratio.
Inventory turnover ratio= Cost Of Goods Sold/ Average Inventory
= 231,000/38,000+ 28,000/2
= 231,000/33,000= 7 times
A company with a high turnover requires a smaller investment in inventory than one producing the same sales with a lower turn over.
D. Average number of days' supply in inventory
Average number of days' supply in inventory= Cost of Goods Sold/ 365
= 231,000 /365= 632.89
More Inventory will be needed in 633 days
Walkers World Company gathered the following information for 2019:
Total sales revenue (65% on credit) $432,000
Cost of goods sold 231,000
Sales returns and allowances (on credit) 44,000
Accounts receivable at end of 2019 ($30,000
increase during 2019) 100,000
Allowance for doubtful accounts:
Beginning of 2019 5,000
End of 2019 7,000
Merchandise inventory at end of 2019 ($10,000
decrease during 2019) 28,000
Assume 365 days in the year.
Calculate each of the following ratios.
A. Receivable turnover ratio.
B. Average age of receivables.
C. Inventory turnover ratio.
D. Average number of days' supply in inventory
Assume that you are a human resource manager of a 5-star international resort chain operating in
a South Pacific country. Your resort CEO recently assigns you to hire one hundred housekeepers
and waiters for your chain of hotels. Besides personality tests, discuss three other selection
measures you could use to select your targeted employees. Justify your choices with relevant
examples
Answer:
1. Language Skills
2. Specialization
3. Customer relationship skills
Explanation:
It is very important to note that South Pacific countries are home to many tourist, therefore the employees selected if able to speak various languages would be an added competitive advantage for the Hotel.
Also, employees with vast experience in their area of specialization is another factor that should be considered because it is serves as key to getting repeat service purchases in the hospitality industry.
Furthermore, the ability of employees to remain calm even to an irate customer shows a high level of good customer relationship. However, lack of this skill would result in potential loses for the hotel as a result of bad customer rating.
Synovec Corporation is expected to pay the following dividends over the next four years: $6.20, $17.20, $22.20, and $4.00. Afterward, the company pledges to maintain a constant 5.5 percent growth rate in dividends forever. If the required return on the stock is 9 percent, what is the current share price
Answer:
Current price =$125.56
Explanation:
According to the dividend valuation model, the value of a share is the present value(PV) of its future expected dividend discounted at the required rate of return.
We will sum the PV of its future dividends as follows:
PV in year 1 = 6.20 × 1.09^(-1)= 5.69
PV in year 2 = 17.20 × 1.09^(-2)= 14.48
PV in year 3 = 22.20 × 1,09^(-3)=17.14
PV in year 4 = 4 × 1.09^(-4)= 2.83
PV in year 5 and beyond = (4 × 1.055)/(0.09-0.055) ×1.09^(-4) = 85.42
Current price = 5.69 + 14.48 + 17.14 + 2.83 + 85.42 = 125.56
Current price =$125.56
You run a school in Florida. Fixed monthly cost is $5,435.00 for rent and utilities, $6,171.00 is spent in salaries and $1,545.00 in insurance. Also every student adds up to $91.00 per month in stationary, food etc. You charge $734.00 per month from every student now. You are considering moving the school to another neighborhood where the rent and utilities will increase to $11,679.00, salaries to $6,974.00 and insurance to $2,408.00 per month. Variable cost per student will increase up to $158.00 per month. However you can charge $1,054.00 per student. At what point will you be indifferent between your current mode of operation and the new option?
Answer:
31
Explanation:
The calculation of indifferent between your current mode of operation and the new option is shown below:-
Current Operation
Contribution Margin = Monthly Fees - Variable Cost
= $734.00 - $91.00
= $643.00
Total Fixed Cost = Rent and Utilities + Salaries + Insurance
= $5,435.00 + $6,171.00 + $1,545.00
= $13,151.00
New Operation
Contribution Margin = Monthly Fees - Variable Cost
= $1,054.00 - $158.00
= $896.00
Total Fixed Cost = Rent and Utilities + Salaries + Insurance
= $11,679.00 + $6,974.00 + $2,408.00
= $21,061.00
Here we will assume the indifferent number of students will be X
So,
Income under current option = Income under new option
$643.00 × X - $13,151.00 = $896.00 × X - $21,061.00
$253X = $7,910
X = $7,910 ÷ $253
= 31.26
or
= 31
Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months: January February March $ 3 Material purchases 14,870 11,690 12,760 Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $7,200. The budgeted cash payments for materials in January are
A. $13,580.
B. $13,815
C. $9,980
D. $7,200.
E. $19,960.
Answer:
Total= $14,635
Explanation:
Giving the following information:
Cost of materials:
January= 14,870
February= 11,690
March= 12,760
Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase.
The December Accounts Payable balance is $7,200.
To calculate the cash disbursement for January, we need to use the following structure:
Cash collection:
Accounts Payable= 7,200
Cash From January= (14,870*0.5)= 7,435
Total= $14,635
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $5.1 million. Klingon’s current balance sheet shows net fixed assets of $3.4 million, current liabilities of $895,000, and net working capital of $235,000. If the current assets and current liabilities were liquidated today, the company would receive a total of $1.15 million cash. a. What is the book value of Klingon’s total assets today? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) b. What is the sum of the market value of NWC and the market value of fixed assets? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
a. What is the book value of Klingon’s total assets today?
total assets = net fixed assets + current assets
net fixed assets = $3,400,000current assets = net working capital + current liabilities = $235,000 + $895,000 = $1,130,000total assets = $3,400,000 + $1,130,000 = $4,530,000
b. What is the sum of the market value of NWC and the market value of fixed assets?
market value of NWC = $1,150,000market value of fixed assets = $5,100,000FMV of NWC + fixed assets = $1,150,000 + $5,100,000 = $6,250,000
Assume India can produce either 15 bottles of milk or 50 cartons of eggs using all of its available resources, and Indonesia can produce either 25 bottles of milk or 35 cartons of eggs using all of its available resources. After each country fully specializes in producing the good in which it has a comparative advantage, how many cartons of eggs will India produce
Answer:
50 cartons of eggs
Explanation:
The comparative advantage is a principle in which a country specializes in the production a good in which it has a lower opportunity cost than others.
Bottles of milk cartons of eggs
India 15 50
Indonesia 25 35
In this situation, the opportunity cost for India of producing 1 bottle of milk is producing 3.33 cartons of eggs. The opportunity cost for Indonesia of producing 1 bottle of milk is producing 1.4 cartons of eggs. This means that Indonesia has a lower opportunity cost and a comparative advantage in producing bottles of milk.
In the other part, the opportunity cost for India of producing 1 carton of eggs is producing 0.3 bottles of milk and the opportunity cost for Indonesia of producing 1 carton of eggs is producing 0.71 bottles of milk. This means that India has a lower opportunity cost and a comparative advantage in producing cartons of eggs.
According to this, India would specialize in producing eggs as it has a comparative advantage and the country will produce 50 cartons of eggs.
United Resources Company obtained a charter from the state in January of this year. The charter authorized 206,000 shares of common stock with a par value of $3. During the year, the company earned $493,000 Also during the year, the following selected transactions occurred in the order given: Sold 88,000 shares of the common stock in an initial public offering for $14 per share. Repurchased 26,000 shares of the previously issued shares for $17 per share. Resold 8,000 shares of treasury stock for $20 per share. Required: Prepare the stockholders' equity section of the balance sheet at the end of the year. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
United Resources Company
Stockholders section of the balance sheet at the end of the year:
Common Stock:
Authorized 206,000 shares at $3 par value
Issued 88,000 shares $264,000
Additional Paid-in Capital
($968,000 -364,000 + 136,000) 740,000
Treasury Stock ($78,000 - 24,000) (54,000)
Total Equity $950,000
Explanation:
a) The authorized common stock is stated in the balance sheet as a memorandum record. It does not form part of the calculation of equity since all the shares have not been issued.
b) Issued common stock is valued at 88,000 * $3 = $264,000
c) The difference in the par value and the issue price is recorded in the Additional Paid-in Capital Account. It is also where the increases and decreases in Treasury stock above or below par values are recorded.
d) Treasury Stock is a common stock contra account which records the repurchase and resale of common stock. Two methods are used. One recognizes the whole cost of treasury stock in the Treasury Stock account. It is called the costing method. The other method, called the par-value method, recognizes the above and below par value in the Additional Paid-in Capital.
Banfield Corporation makes three products that use compound W, the current constrained resource. Data concerning those products appear below: VP YI WX Selling price per unit $ 248.04 $ 230.66 $ 505.44 Variable cost per unit $ 190.71 $ 172.14 $ 388.80 Centiliters of compound W 3.90 3.80 8.10
Answer:
B) YI, VP, WX
Explanation:
VP YI WX
Selling price per unit
$248.04 $230.66 $505.44
Variable cost per unit
190.71 $172.14 $388.80
Contribution margin per unit
(Selling price - variable cost)
$57.33 $58.52 $116.64
The amount of the constrained resource that would be required to produce one unit
3.90 3.80 8.10
Therefore:
$57.33÷3.90=$14,70
$58.52÷3.80 =$15.40
$116.64÷8.10=$14.40
Therefore the Contribution margin per unit of the constrained resource would be
$14.70 $15.40 $14.40
Therefore the Ranking the products in order of their current profitability from most profitable to least profitable would be:
YI =$15.90
VP=$14.70
WX=$14.40
Which is YI VP WX
At the annual meeting of the HR division at an insurance company, the vice president of HR noted that pay compression was a problematic phenomenon for certain jobs for which there was high demand but low supply. This problem was especially acute for jobs in actuarial science and legal services. The vice president of HR has hired you as a compensation consultant to help them formulate an action plan for dealing with this situation. What would you say is the best solution to this situation?
Answer:
Prepare high performing employees for promotions to jobs at higher salary levels.
Explanation:
Pay compression occurs when there is little difference in pay between employees regardless of experience and skill they possess. This leads to low motivation ong employees to perform above others since compensation is the same.
In the given instance this is the problem in actuarial science and legal jobs where there is high demand and low supply of talent.
To remedy this there needs to be a framework to compensate high performers.
Promoting them to jobs that have higher salary will be a great way to recognise and motivate high fliers
, what measures will you put in place to ensure that your bank will not be caught up in the same situation as the collapsed banks?
Answer:
I will review the financial statements of the bank and the stock exchange valuation of the bank's stock.
Explanation:
The most important evidence of the organization's current position are its financial statements which shows that whether or not the organization will survive in the next 12 months. So to avoid any issues with the bank's bankruptcy we can review the financial statements of the bank to think about whether or not to keep the money deposited or not. Furthermore, the stock exchange pricing of the stock is also a key indicator of the financial position of the bank.
So I will review the financial statements of the bank and the stock exchange valuation of the bank's stock.
On January 1, 20X1, Draper Inc. signed a five-year noncancelable lease with Thornhill Company for custom-made equipment. The lease calls for five payments of $161,364.70 to be made at the beginning of each year. The leased asset has a fair value of $900,000 on January 1, 20X1. There is no bargain purchase option, and ownership of the leased asset reverts to Thornhill at the lease end. The leased asset has an expected useful life of six years, and Draper uses straight-line depreciation for financial reporting purposes. Its incremental borrowing rate is 8%. Draper uses a calendar year for financial reporting purposes.
Required:
1. Under U.S GAAP would Draper classify this lease as a capital lease or as an operating lease? Explain.
2. Under IFRS would Draper classify this lease as a capital lease or as an operating lease? Explain.
Answer:
1. Under U.S GAAP the lease will be capital lease
2. Under IFRS it is leased under capital lease method.
Explanation:
1. In order to determine Under U.S GAAP if Draper classify this lease as a capital lease or as an operating lease we would to calculate the lease payable as follows:
lease payable=(Annual Payment*present value after interest and tax)/Fair value
lease payable=($161,364.70*800)/$900,000
lease payable=77.3%
Under U.S GAAP the lease will be capital lease because the lease term is for 5 years was more than 75% of economic life
2. Under IFRS the assets are mostly considered by its economic value, so it is leased under capital lease method.
In 2010, the MoreForLess Company had revenues of $2,000,000 while costs were $1,500,000. In 2011, MoreForLess will be introducing a new product line that will generate $200,000 in sales revenues and $160,000 in costs. Assuming no changes are expected for the other products, the differential operating profit for 2011 is
Answer:
Differential profit Profit = $40,000
Explanation:
The differential operating profit is the difference between the operating profit before the introduction of the product and after the introduction of the new product
Profit = Revenue - costs
Profit before the introduction of the new product
= 2,000,000 - 1,500,000 = 500,000
Profit after the introduction of the new product
New revenue = (2,000,000 + 200,000) = 2,200,000
Cumulative cost = 1,500,000 + 160,000 = 1,660,000
Profit = 2,200,000 - 1,660,000 = 540000
Differential profit Profit = 540,000 - 500,000= $40,000
"Cincinnati Supply, Co. is a local supplier to the Kraft Heinz Company, which is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world. Cincinnati Supply, Co. purchased new furniture at a cost of $33,000 on January 1. The furniture is estimated to have a useful life of 6 years and a $3,000 salvage value. The company uses the straight-line method of depreciation. What is the amount of depreciation expense reported on December 31
Answer:
Annual depreciation= $5,000
Explanation:
Giving the following information:
Purchasing price= $33,000
Salvage value= $3,000
Useful life= 6 years
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (33,000 - 3,000)/6
Annual depreciation= $5,000
Ratio proficiency McDougal Printing, Inc., had sales totaling $ 41 comma 000 comma 000 in fiscal year 2019. Some ratios for the company are listed below. Use this information to determine the dollar values of various income statement and balance sheet accounts as requested. Assume a 365-day year. Calculate values for the following: a. Gross profits b. Cost of goods sold c. Operating profits d. Operating expenses e. Earnings available for common stockholders f. Total assets g. Total common stock equity h. Accounts receivable
Answer:
a. Gross profits
= total sales x gross profit margin = $41,000,000 x 76% = $31,160,000
b. Cost of goods sold
= total sales - gross profit = $41,000,000 - $31,160,000 = $9,840,000
c. Operating profits
= total sales x operating profit margin = $41,000,000 x 31% = $12,710,000
d. Operating expenses
= total sales - operating profit = $41,000,000 - $12,710,000 = $28,290,000
e. Earnings available for common stockholders
= net profits = total sales x net profit margin = $41,000,000 x 9% = $3,690,000
f. Total assets
asset turnover = revenue / total assets
total assets = revenue / 2.1 = $41,000,000 / 2.1 = $19,523,810
g. Total common stock equity
ROE = net income / equity
equity = net income / ROE = $3,690,000 / 23% = $16,043,478
h. Accounts receivable
average collection period = 365 / accounts receivable turnover
54.5 = 365 / accounts receivable turnover
accounts receivable turnover = 365 / 54.5 = 6.697248
accounts receivable turnover = sales / accounts receivable
accounts receivable = sales / accounts receivable turnover = $41,000,000 / 6.697248 = $6,121,918
Explanation:
McDougal Printing, Inc.
Year Ended December 31, 2019
Sales $41,000,000
Gross profit margin 76% =
Operating profit margin 31%
Net profit margin 9%
Return on total assets 18.9%
Return on common equity 23%
Total asset turnover 2.1
Average collection period 54.5 days
