Answer: 80.17 days
Explanation:
The Receivable days estimated is calculated by the formula:
= Accounts receivable * 365 / (Annual sales * Gross profit margin)
= 2,200 * 365/ (32,000 * 31.3%)
= 2,200 * 0.03644169329
= 80.17 days
Suppose that $1 lottery tickets have the following probabilities and values: 1 in 5 to win a free ticket (worth $1), 1 in 100 to win $5, 1 in 100,000 to win $1000, and 1 in 10 million to win $1 million. What is the expected value of a lottery ticket to the consumer
Answer:
$0.36
Explanation:
Expected value of the lottery ticket = (p1 x a1) + (p2 x a2) + (p3 x a3) + (p4 x a4)
p1 = probability of winning $1 = 1/5 = 0.2
a1 = $1
p2 = probability of winning $5 = 1/100 = 0.01
a2 = $5
p3 = probability of winning $1000 = 1/100,000 = 0.00001
a3 = $1000
p4 = probability of winning $1 million = 1/10,000,000 = 0.0000001
a4 = $1 million
(0.2 x 1) + (0.01 x 5) + (0.00001 x 1000) + (1,000,000 x 0.00001) = $0.36
Patty took a cash advance of $1,500. Her new credit card charges an Annual Percentage Rate of 21%. The transaction fee for the cash advance is 3% of the amount of the advance, with a minimum fee of $35. This fee is added to the total cash advance, and accrues interest.
Hint: calculate 3% of 1,500. Add that 3% to the original cash advance of 1,500. This becomes your charged amount.
If Patty makes monthly payments of $65:
What is the total amount Patty will end up paying for the cash advance?
Imagine that I start a bar in Clemson. Each year I order $200,000 worth of food, beer and drink which is turned around and sold to customers. I also hire part-time staff, where the combined annual wages add up to $100,000. I also pay rent on my building which is $100,000 a year. Assume these are my only expenses. My bar is unusually successful and I generate $1,000,000 in revenue. How much does my bar contribute to GDP? (Hint: Think about using the national spending approach or the factor income approach. One is easier to use than the other)
a) $1,000,000
b) $1,300,000
c) $1,400,000
d) $1,200,000
Answer:
The correct option is a) $1,000,000.
Explanation:
Under factor income approach contribution to gross domestic product (GDP) is calculated by adding up wages, rent, interest, and profit.
Using the factor factor income approach, contribution to GDP can be determined as follows:
Purchases = $200,000
Wages = $100,000
Rent on building = $100,000
Expenses = Wages + Rent on building = $100,000 + $100,000 = $200,000
Revenue = $1,000,000
Profit = Revenue - Purchases - Expenses = $1,000,000 - $200,000 - $200,000 = $600,000
Contribution to GDP = Wages + Rent on building + Profit = $200,000 + $200,000 + $600,000 = $1,000,000
This implies that your bar contributes $1,000,000 to GDP. Therefore, the correct option is a) $1,000,000.
The business cycle measures fluctuations in the long-run trend growth rate of GDP. fluctuations in the profit of businesses. fluctuations in consumption. short-run fluctuations in economic activity. fluctuations in the average tax rate paid by businesses.
Answer: short-run fluctuations in economic activity.
Explanation:
The business cycle helps explain fluctuations in economic activity within a period of time which makes it a short run measure. The cycle consists of expansion phases and recession phases which show that economic activity seems to expand and then go into a recession overtime.
The lowest point in the recession is called the depression and when this happens, the economy hits rock bottom and starts to expand after some time. This is what happened with the Great Depression and the Great Recession. The height of the expansion is the peak and here, the economy is at its most successful.
The first of two significant fiscal policy initiatives enacted by the government during the Great Recession, signed in February 2008 by President George W. Bush, was the:__________
a. American Recovery and Reinvestment Act of 2008.
b. Economic Stimulus Act of 2008.
c. Economic Tax Rebate Act of 2008.
d. Economic Recovery and Reinvestment Act of 2008.
e. American Stimulus Act of 2008.
Answer:
b. Economic Stimulus Act of 2008
Explanation:
The Economic Stimulus Act of 2008 was enacted during the term of George.W Bush. It was done to help encourage business investments during the recession by granting tax rebates to every taxpayers and consequently increasing disposable income. The Economic Stimulus Act of 2008 granted tax rebates of the lesser of net income tax liability or $600 to every taxpayer and $1200 to tax paying couples who filed their taxes jointly.
ACS Industries is considering a project with an initial cost of $6.2 million. The project will produce cash inflows of $1.8 million a year for five years. The firm uses the subjective approach to assign discount rates to projects. For this project, the subjective adjustment is 2%. The firm has a pre-tax cost of debt of 6.7% and a cost of equity of 9.4%. The debt-equity ratio is 0.6 and the tax rate is 35%. What is the net present value of the project
Answer:
$0.710 million
Explanation:
The net present value of the project is the present value of future cash inflows discounted at the appropriate project discount rate minus the initial investment outlay.
The weighted average cost of capital of the firm is computed using the formula below:
WACC=(weight of equity*cost of equity)+(weight of debt*after-tax cost of debt)
debt-equity ratio=debt/equity= 0.6(which means debt is 0.6 while equity is 1 since 0.6/1=0.6)
weight of equity=equity/(equity+debt)
weight of equity=1/(1+0.6)=62.50%
weight of debt=debt/(equity+debt)
weight of debt=0.6/(1+0.6)=37.50%
cost of equity=9.4%
after-tax cost of debt=pre-tax cost of debt*(1-tax rate)
pre-tax cost of debt=6.7%
tax rate=35%
after-tax cost of debt=6.7%*(1-35%)=4.36%
WACC=(62.50%*9.4%)+(37.50%*4.36%)
WACC=7.51%
The WACC would be adjusted upward by 2% to reflect the higher level of risk of the new project
project's discount rate=7.51%+2%=9.51%
present value of a future cash flow=future cash flow/(1+discount rate)^n
n is the year in which the future cash flow is expected, it is 1 for year 1 cash flow ,2 for year 2 cash flow, and so on.
NPV=$0.710 million($710,000)
1) A First National Bank depositor made out a deposit slip showing currency of $620.00, coins of $13.25,
and two checks for $113.30 and $174.00. Compute the total deposit shown on the deposit slip.
(2 pts)
$920.55
$902.55
$633.25
$820.55
Answer:
The right answer is "$907.30".
Explanation:
Given that:
Currency,
= $620.00
Two checks,
= $113.30
and,
= $174.00
Now,
The total deposit shown will be:
= [tex]Currency+2 \ checks[/tex]
By substituting the values, we get
= [tex]620.00+(113.30+174.00)[/tex]
= [tex]620.00+287.3[/tex]
= [tex]907.30[/tex] ($)
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $548,080 Number of setups 680 Ordering costs 313,200 Number of orders 17,400 Machine costs 939,400 Machine hours 42,700 Receiving 343,000 Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Units completed 16,000 8,000
Direct labor hours 6,000 2,000
Number of setups 400 200
Number of orders 6,000 12,000
Machine hours 24,000 18,000
Receiving hours 3,000 7,000
The company's normal activity is 8,000 direct labor hours.
Required:
1. Determine the unit cost for each model using direct labor hours to apply overhead.
Unit Cost
Model A $
Model B $
2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent.
Unit Cost
Model A $
Model B $
3. Which method produces the more accurate cost assignment?
Answer:
Deoro Company
1. Unit cost using direct labor hours to apply overhead:
Unit Cost
Model A $167.985
Model B $226.99
2. Unit cost using the four activity drivers:
Unit Cost
Model A $133.97
Model B $287.28
3. Activity-based costing method always produces the more accurate cost assignment.
Explanation:
a) Data and Calculations:
Activity Expected Cost Activity Driver Activity Capacity
Setting up equipment $548,080 Number of setups 680
Ordering costs 313,200 Number of orders 17,400
Machine costs 939,400 Machine hours 42,700
Receiving 343,000 Receiving hours 9,800
Total overhead costs $2,142,680
Activity Rates:
Setting up equipment $806 per setup ($548,080/680)
Ordering costs $18 per order ($313,200/17,400)
Machine costs $22 per machine hour ($939,400/42,700)
Receiving $35 per receiving hour ($343,000/9,800)
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Overhead applied $1,063,500 $1,018,200
Total costs $2,143,500 $2,298,200
Units completed 16,000 8,000
Cost per unit $133.97 $287.275
Direct labor hours 6,000 2,000
Number of setups 400 200
Number of orders 6,000 12,000
Machine hours 24,000 18,000
Receiving hours 3,000 7,000
The company's normal activity is 8,000 direct labor hours.
Assignment of overhead costs:
Model A Model B
Number of setups $322,500 (400 * $806) $161,200 (200 * $806)
Number of orders 108,000 (6,000 * $18) 216,000 (12,000 * $18)
Machine hours 528,000 (24,000 * $22) 396,000 (18,000 * $22)
Receiving hours 105,000 (3,000 * $35) 245,000 (7,000 * $35)
Total overhead applied $1,063,500 $1,018,200
Overhead based on direct labor hours:
Total overhead costs = $2,143,680
Total direct labor hours = 8,000 (6,000 + 2,000)
Overhead rate per DLH = $267.96
Allocation of overhead:
Model A Model B
Direct labor hours 6,000 2,000
Overhead (DLH) $1,607,760 ($267.96 *6,000) $535,920 ($267.96 * 2,000)
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Overhead applied $1,607,760 $535,920
Total costs $2,687,760 $1,815,920
Units completed 16,000 8,000
Cost per unit $167.985 $226.99
If the demand for a product was 16, 28, 20 and 24 units in four consecutive months, and the corresponding forecasts in those four months were 20, 16, 20 and 30 units respectively, what is the MAD at the end of four months
Answer:
5.5 units
Explanation:
Period Actual Forecast Absolute deviation
1 16 20 4
2 28 16 12
3 20 20 0
4 24 30 6
Total 22
Mean absolute deviation(MAD) = Sum of absolute deviation / Number of periods
Mean absolute deviation(MAD) = 22 / 4
Mean absolute deviation(MAD) = 5.5 units
A company issues $60,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts $62,000 for the bonds, the premium on bonds payable will (increase/decrease) total interest expense recognized over the life of the bond by $ .
Answer:
Decrease, $2,000
Explanation:
The premium on bonds payable will decrease total interest expense recognized over the life of the bond by $2,000. The difference between the face value & the issue value $2,000 ($62,000 - $60,000) should be amortize over a period of time and of which is reduced from interest expense.
what is another name for advertising?
Answer:
commercial, message, pitch
Explanation:
yes
The purchase price and all costs to bring an asset to its desired condition and location for use should be ________.
a. accrued
b. capitalized
c. expensed
Answer:
b. capitalized
Explanation:
The purchase price and all costs to bring an asset to its desired condition and location for use should be capitalized.
Answer:b capitalized
Explanation:
Cliff Company traded in an old truck for a new one. The old truck had a cost of $290,000 and accumulated depreciation of $87,000. The new truck had an invoice price of $293,000. Huffington was given a $200,000 trade-in allowance on the old truck, which meant they paid $93,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck
Answer:
203,000
Explanation:
Is the answer to this question
The shareholders' equity of Green Corporation includes $232,000 of $1 par common stock and $430,000 par of 7% cumulative preferred stock. The board of directors of Green declared cash dividends of $53,000 in 2021 after paying $23,000 cash dividends in each of 2020 and 2019. What is the amount of dividends common shareholders will receive in 2021
Answer:
$8,700
Explanation:
Dividends payable to preferred shareholders = [($430,000*7%)*2 - ($23,000*2)] + ($430,000*7%)
Dividends payable to preferred shareholders = [$60,200 - $46,000] + $30,100
Dividends payable to preferred shareholders = $14,200 + $30,100
Dividends payable to preferred shareholders = $44,300
Dividend available to common shareholders = Total dividend - Dividends payable to preferred shareholders
Dividend available to common shareholders = $53,000 - $44,300
Dividend available to common shareholders = $8,700
So, the amount of dividends common shareholders will receive in 2021 is $8,700.
A competitive market analysis takes into consideration?
Answer:
A competitive analysis is the process of identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to your own business, product, and service. The goal of the competitive analysis is to gather the intelligence necessary to find a line of attack and develop your go-to-market strategy.Explanation:
#AnswerForTreesAs Kyle conducts his annual evaluations of his employees, he notices that Connie and Debbie have both been less productive since they were relocated in the same department. Kyle is in what stage of the managerial decision-making process?
Answer:
Identifying the problem or opportunity.
Explanation:
During this stage, Kyle is first trying to determine what aspects of the firm are troublesome or underperforming. The whole point of doing this is to identify the areas that need some actions or decisions made.
The next step would be to generate alternatives.
Dong Wang wants to retire when he has saved $1,500,000. He can make 30 payments of $15,000 each, with each payment made at the beginning of the year. What would be the interest rate required to help him achieve his goal
Answer: 6.94%
Explanation:
You can use an Excel worksheet to solve for this:
Number of periods = 30
Payment = 15,000 (should be a negative number)
Present value = 0
Future value = 1,500,000
Type = 1 (this shows that it is an annuity due because payments are at the beginning of the year).
Rate = 6.94%
Wealth Company has the following transactions for the month of November: Purchased materials on account for $300,000 Materials requisitioned for $75,000 Direct labor for the month was incurred (but not yet paid) of $50,000. Actual overhead for the month was $30,000. It has not been paid yet. (Charge to various payables.) Overhead is applied to production at the rate of 50% of direct labor. Jobs totaling $50,000 were transferred from Work-in-Process to Finished Goods. Jobs costing $34,000 were sold. Balances at the beginning of the month were: Materials $34,240 Work-in-Process 0 Finished Goods $12,000 What is the ending balance of Finished Goods
Answer:
Wealth Company
The ending balance of Finished Goods is:
= $28,000
Explanation:
a) Data and Calculations:
Raw materials $300,000 Accounts Payable $300,000
Work in Process $75,000 Raw materials $75,000
Work in Process $50,000 Payroll Payable $50,000
Manufacturing overhead $30,000 Overhead Payable $30,000
Work in Process $25,000 Manufacturing Overhead $25,000
Finished Goods $50,000 Work-in-Process $50,000
Cost of goods sold $34,000 Finished Goods $34,000
Balances at the beginning of the month were:
Materials $34,240
Work-in-Process 0
Finished Goods $12,000
Finished Goods $12,000
Work in process 50,000
Cost of goods (34,000)
Ending balance $28,000
Alliances are often used to pursue business-level goals, but they may be managed at the corporate level. Explain why this portfolio approach to alliance management would make sense.
Answer:
mainly because of information
Explanation:
This approach makes sense mainly because of information. Business-level goals are all about performance and profit. Corporate is made up of individuals that are invested in the company itself. They have all the information on what the company wants to accomplish, long-term strategies being used, available resources, etc. Most of this information is closed off to the rest of the company and only available to those in Corporate. This information is what leads to informed decisions which allow for the best, most efficient, and most profitable choices to be made.
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:
Direct materials $86,000
Direct labor $43,500
Variable manufacturing overhead $21,800
Fixed manufacturing overhead 33,100
Total manufacturing overhead $54,900
Variable selling expense $15,400
Fixed selling expense 24,800
Total selling expense $40,200
Variable administrative expense $5,700
Fixed administrative expense 28,400
Total administrative expense $34,100
Required:
a. What is the total product cost?
b. What is the total period cost?
Answer:
Results are below.
Explanation:
The product costs are all the expenses incurred in production being direct and indirect:
Direct materials= 86,000
Direct labor= 43,500
Variable manufacturing overhead= 21,800
Fixed manufacturing overhead= 33,100
Total product cost= $184,400
The period costs are all the expenses not involved in production (selling and administrative):
Variable selling expense= 15,400
Fixed selling expense= 24,800
Variable administrative expense= 5,700
Fixed administrative expense= 28,400
Total period cost= $74,300
Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a sole proprietorship. What is one advantage to Jeremy of setting up his business as a sole proprietorship
Complete Question:
a. As a sole proprietor, Jeremy would face limited liability.
b. As a sole proprietor, Jeremy would have both ownership and control over the business.
c. As a sole proprietor, Jeremy would have the ability to share risk with shareholders.
d. All of the above would be advantages of setting up his business as a sole proprietorship.
Answer:
b. As a sole proprietor, Jeremy would have both ownership and control over the business.
Explanation:
A sole proprietorship business is a type of business that is owned by a single person and as such their profits are taxed once as personal income tax. Thus, it is a type of business that is typically owned by an individual or one person and as a result, this single individual is solely responsible for its debts.
Generally, a major advantage of sole proprietorship is that the owner has an absolute control over the business and would be the only one to define how it's shall be run.
Hence, an advantage to Jeremy of setting up his business as a sole proprietorship is that he would have both ownership and control over the business.
Kuley bought a new loom today from GlivCo. She will receive a cash rebate of $820 from GlivCo in 1 year, pay $1,470 to GlivCo in 2 years, receive a cash rebate of $940 from GlivCo in 4 years, and pay $3,580 to GlivCo in 7 years. If the discount rate is 7.12 percent, then what is the present value of the cash flows associated with this transaction
Answer:
$-2013.69
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 820
Cash flow in year 2 = -1470
Cash flow in year 3 = 0
Cash flow in year 4 = 940
Cash flow in year 5 = 0
Cash flow in year 6 = 0
Cash flow in year 7 = -3580
I = 7,12 %
PV = -2013
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information about the cost of producing tote bags:
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Mohave has determined that all variable costs could be eliminated by outsourcing the tote bags, while 60 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specific use in mind for the space currently dedicated to producing the tote bags.
Required:
1. Compute the difference in cost between making and buying the umbrella tote bag.
2. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them?
3. Suppose that the space Mohave currently uses to make the bags could be utilized by a new product line that would generate $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag. Does this change your recommendation to Mohave? If so, how?
4. Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave’s managers are responsible for improving this metric, how might it impact their sourcing decisions?
5. What other strategic or sustainability-related goals should Mohave consider before making a final decision?
Answer:
Mohave Corp.
1. Cost Differences:
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
2. Based strictly on the incremental analysis, Mohave should continue to make the tote bags.
3. The recommendation is changed. Mohave should buy the tote bags from outside. Buying from outside increases operating income by $4,400.
Explanation:
a) Data and Calculations:
Price per unit from outside supplier = $7.50
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
Relevant costs:
Make Buy Difference
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 0.80
Total cost per unit $6.80 $7.50 $0.70
Annual Units 8,000 8,000 8,000
Total costs $54,400 $60,000 $5,600
Annual profits from new product 0 (10,000) $10,000
Total net costs $54,400 $50,000 $4,400
Wahlberg Company Income Statement For the Years Ended December 31
2020 2019
Net sales $1,813,600 $1,746,200 Cost of goods sold 1,013,400 990,000 Gross profit 800,200 756,200 Selling and administrative expenses 514,800 474,000 Income from operations 285,400 282,200 Other expenses and losses Interest expense 17,400 14,400 Income before income taxes 268,000 267,800 Income tax expense 78,019 77,600 Net income $ 189,981 $ 190,200
Wahlberg Company Balance Sheets December 31 Assets 2020 2019 Current assets Cash $60,000 $64,700 Debt investments (short-term) 70,200 49,600 Accounts receivable 117,400 101,100 123,700 Inventory 115,500 Total current assets 371,300 330,900 Plant assets (net) 598,900 523,900 $970,200 $854,800 Total assets Liabilities and Stockholders' Equity Plant assets (net) 598,900 523,900 $970,200 Total assets $854,800 Liabilities and Stockholders' Equity Current liabilities Accounts payable $160,800 $144,700 Income taxes payable 43,500 41,800 Total current liabilities 204,300 186,500 Bonds payable 220,000 200,000 424,300 Total liabilities 386,500 Stockholders' equity Common stock ($5 par) 275,600 300,100 Retained earnings 270,300 168,200 Total stockholders' equity 545,900 468,300 Total liabilities and stockholders' equity $970,200 $854,800 All sales were on account. Net cash provided by operating activities for 2020 was $230,000. Capital expenditures were $136,000, and cash dividends were $87,881. nings per share, 6.8 or 6.8%. Use 365 days for calculation.) 3.38 (a) Earnings per share (b) Return on common stockholders' equity 33.31 % (c) Return on assets 20.53 % (d) 1.82 :1 Current ratio 1.21 times (e) Accounts receivable turnover (f) 16.6 days Average collection period (g) Inventory turnover 15.16 times (h) 16.4 days Days in inventory 1.87 times (i) Times interest earned times (j) Asset turnover (k) Debt to assets ratio 22.32 % (l) Free cash flow
Answer:
Answer:
Wahlberg Company
(a) Earnings per share = $3.45 ($189,981/55,120) $3.17 ($190,200/60,020)
(b) Return on common stockholders' equity = 34.80% 40.61%
($189,981/$545,900) ($190,200/$468,300)
(c) Return on assets = 19.58% 22.25%
($189,951/$970,200) ($190,200/$854,800)
(d) Current ratio = 1.82 times 1.77 times
= Total current assets 371,300/ 330,900/
/Total current liabilities 204,300 186,500
(e) Accounts receivable turnover = 16.60 times
(f) Average collection period = 22 days
(g) Inventory turnover = 8.47 times
(h) Days in inventory = 43.1 days
(i) Times interest earned times = 16.4 times 19.6 times
(j) Asset turnover = 1.99x
(k) Debt to assets ratio = 43.37% 45.22%
(l) Free cash flow
= $94,000
Explanation:
a) Data and Calculations:
Wahlberg Company
Income Statement
For the Years Ended December 31
2020 2019
Net sales $1,813,600 $1,746,200
Cost of goods sold 1,013,400 990,000
Gross profit 800,200 756,200
Selling and administrative expenses 514,800 474,000
Income from operations 285,400 282,200
Other expenses and losses
Interest expense 17,400 14,400
Income before income taxes 268,000 267,800
Income tax expense 78,019 77,600
Net income $ 189,981 $ 190,200
Wahlberg Company
Balance Sheets December 31
Assets 2020 2019
Current assets
Cash $60,000 $64,700
Debt investments (short-term) 70,200 49,600
Accounts receivable 117,400 101,100
Inventory 123,700 115,500
Total current assets 371,300 330,900
Plant assets (net) 598,900 523,900
Total assets $970,200 $854,800
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $160,800 $144,700
Income taxes payable 43,500 41,800
Total current liabilities 204,300 186,500
Bonds payable 220,000 200,000
Total liabilities 424,300 386,500
Stockholders' equity
Common stock ($5 par) 275,600 300,100
Retained earnings 270,300 168,200
Total stockholders' equity 545,900 468,300
Total liabilities and
stockholders' equity $970,200 $854,800
Net cash provided by operating activities for 2020 was $230,000.
Capital expenditures were $136,000
Cash dividends were $87,881.
Earnings per share, 6.8 or 6.8%
Outstanding shares =55,120 ($275,600/$5) 60,020 ($300,100 /$5)
Average Receivable = $109,250 ($117,400 + $101,100)/2
Average inventory = $119,600 ($123,700 + $115,500)/2
Average assets = $912,500 ($970,200 + $854,800)/2
(a) Earnings per share = $3.45 ($189,981/55,120) $3.17 ($190,200/60,020)
(b) Return on common stockholders' equity = 34.80% 40.61%
($189,981/$545,900) ($190,200/$468,300)
(c) Return on assets = 19.58% 22.25%
($189,951/$970,200) ($190,200/$854,800)
(d) Current ratio = 1.82 times 1.77 times
= Total current assets 371,300/ 330,900/
/Total current liabilities 204,300 186,500
(e) Accounts receivable turnover = $1,813,600/$109,250 = 16.60 times
= Net Sales/Average Receivable
(f) Average collection period = $109,250/$1,813,600 * 365 = 22 days
(g) Inventory turnover = $1,013,400/$119,600 = 8.47 times
(h) Days in inventory = $119,600/$1,013,400 * 365 = 43.1 days
(i) Times interest earned times = EBIT/Interest Expense
= 16.4 times ($285,400/$17,400) 19.6 times ($282,200/$14,400)
(j) Asset turnover = Sales/Average Assets = $1,813,600/$912,500 = 1.99x
(k) Debt to assets ratio = 43.37% 45.22%
($424,300/$970,200) ($386,500/$854,800)
(l) Free cash flow = Net cash provided by operating activities - Capital expenditures
= $230,000 - $136,000
= $94,000
On May 1, a two-year insurance policy was purchased for $12,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31
Answer:
$4,000
Explanation:
The accrual concept is of the opinion that expense should be recognized when incurred and not necessarily when the expense is paid for.
The insurance payment made was for two years, hence, at the end of the first year ended 31 December, which is the 8 months after the payment has been made, hence, 8-month insurance expense would be recognized in the first year.
May 1-December 31=8 months
insurance expense=two-year payment*8 months/2 years
insurance expense=$12,000*8/24
insurance expense for the first year=$4,000
A stock just paid an annual dividend of $1.10. The dividend is expected to increase by 10 percent per year for the next two years and then increase by 2 percent per year thereafter. The discount rate is 14 percent. What correctly computes the current stock price?
Answer: $10.79
Explanation:
This requires the use of the Dividend Discount Model.
The price of the stock is the present value of the dividends for the two years and then the Terminal value.
Terminal value = Third year dividend / (Required return - Growth rate)
= (1.10 * 1.10² * 1.02) / (14% - 2%)
= 1.35762 / 12%
= $11.31
Price of stock is:
= Present value of first year dividend + Present value of second year dividend + Present value of Terminal value
= ((1.10 * 1.1) / 1.14) + (( 1.10 * 1.1²) / 1.14²) + (11.31 / 1.14²)
= $10.79
Contribution Margin Ratio a. Young Company budgets sales of $890,000, fixed costs of $26,000, and variable costs of $115,700. What is the contribution margin ratio for Young Company
Answer:
87 %
Explanation:
contribution margin ratio = Contribution ÷ Sales
therefore,
contribution margin ratio = ($890,000 - $115,700) ÷ $890,000
= 0.87 or 87 %
The contribution margin ratio for Young Company is 87 %.
The Lime Corporation has obtained the following sales forecast data:
July August September October
Cash sales $ 80,000 $ 70,000 $ 50,000 $ 60,000
Credit sales $ 240,000 $ 220,000 $ 180,000 $ 200,000
The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts. The budgeted cash receipts for October would be:_________
a. $188.000
b. $248,000
c. $226,000
d. $278,000
e. none of above
Answer:
b. $248,000
Explanation:
The computation of the cash receipts for October would be
Particulars October
Cash sales $60000
August credit Sales $22000 (10% of $220,000)
September Credit Sales $126000 (70% of $180,000)
October credit Sales $40000 (20% of $200,000)
Budgeted cash receipt $248000
Hence, the correct option is b.
Prime Cost, Conversion Cost, Preparation of Income Statement: Manufacturing Firm Kildeer Company makes easels for artists. During the last calendar year, a total of 32,000 easels were made, and 33,000 were sold for $56 each. The actual unit cost is as follows: Direct materials $13.00 Direct labor 5.00 Variable overhead 8.00 Fixed overhead 16.00 Total unit cost $42.00 The selling expenses consisted of a commission of $1.10 per unit sold and advertising co-payments totaling $93,500. Administrative expenses, all fixed, equaled $176,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was $155,400 for 3,700 easels.Required:1. Calculate the number and the dollar value of easels in ending finished goods inventory.Ending units Dollar amount $FeedbackRemember that cost of goods manufactured increases finished goods inventory.2. Prepare a cost of goods sold statement.Kildeer CompanyStatement of Cost of Goods SoldFor the Year Ended December 31Cost of goods manufactured $Add: Beginning finished goods inventory Cost of goods available for sale $Less: Ending finished goods inventory Cost of goods sold $
Answer:
Results are below.
Explanation:
First, we need to calculate the unitary production cost:
Direct materials= 13
Direct labor= 5
Variable overhead= 8
Fixed overhead= 16
Total unit cost= $42
Now, the ending inventory in units and cost:
Beginning inventory= 3,700
Production= 32,000
Sales= (33,000)
Ending inventory in units= 2,700
Ending inventory value= 2,700*42= $113,400
Finally, the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 155,400 + (32,000*42) - (2,700*42)
COGS= $1,386,000
You buy a 12-year 10% annual coupon bond at par value, $1,000. You sell the bond 3 years later for $1,100. What is your total rate of return over this 3-year period?
Answer:
40%
Explanation:
Coupon per year = Face Value * Coupon Rate
Coupon per year = $1,000 * 10%
Coupon per year = $1,000 * 0.10
Coupon per year = $100
Total Coupon in 3 years = Coupon per year * 3 years
Total Coupon in 3 years = $100 * 3 years
Total Coupon in 3 years = $300
Rate of return = [(Selling Price - Face Value) + Coupon Received] / Face Value*100
Rate of return = [[($1,100 - $1,000) + $300] / 1000] *100
Rate of return = [[$100 + $300] / $1000] * 100
Rate of return = $400 / $1000 * 100
Rate of return = 0.40
Rate of return = 40%
