Answer:
I'd rather have one credit card because it'll be easier to have just one then having to take care of 2. also I believe each credit card on it's own has like interest on it? it's more of a hassle too have 2 basically
Explanation:
Holmes Company produces a product that can be either sold as is or processed further. Holmes has already spent $52,000 to produce 2,325 units that can be sold now for $81,500 to another manufacturer. Alternatively, Holmes can process the units further at an incremental cost of $265 per unit. If Holmes processes further, the units can be sold for $410 each. Compute the incremental income if Holmes processes further.
Answer:
incremental income= $255,625
Explanation:
Giving the following information:
Holmes has already spent $52,000 to produce 2,325 units that can be sold now for $81,500 to another manufacturer.
Process the units further at an incremental cost of $265 per unit. If Holmes processes further, the units can be sold for $410 each.
Sell as-is:
Net income= 81,500 - 52,000= $29,500
Continue processing:
Net income= 2,325*(410 - 265) - 52,000= $285,125
incremental income= 285,125 - 29,500= $255,625
Misty and John formed the MJ Partnership. Misty contributed $50,000 of cash in exchange for her 50% interest in the partnership capital and profits. During the first year of partnership operations, the following events occurred: the partnership had a net taxable income of $20,000; Misty received a distribution of $12,000 cash from the partnership; and Misty had a 50% share in the partnership's $60,000 of recourse liabilities on the last day of the partnership year. Misty's adjusted basis for her partnership interest at year end is:
Answer:
$78,000
Explanation:
The computation of interest at year end is shown below:-
Interest at year end = Cash contribution + Income of partnership + Share of partnership liabilities - Cash from the partnership
= $50,000 + $20,000 × 50% + $60,000 × 50% - $12,000
= $90,000 + $10,000 + $30,000 - $12,000
= $78,000
Therefore for computing the partnership interest at year end we simply applied the above formula by considering all the items given in the question
An investment, which has an expected return of 15%, is expected to make annual cash flows forever. The first annual cash flow is expected today and all subsequent annual cash flows are expected to grow at a constant rate of 5% per year. The cash flow expected today is expected to be $20000. What is the present value (as of today) of the cash flow that is expected to be made in 9 years from today?
Answer:
$19,999.64
Explanation:
Kindly check the attached picture for explanation
Suppose the economy is in long-run equilibrium. In a short span of time, there is a sharp rise in the stock market, an increase in government purchases, an increase in the money supply and a decline in the value of the dollar. In the short run a. the price level and real GDP will both rise. b. the price level and real GDP will both fall. c. neither the price leave nor real GDP will change. d. All of the above are possible.
Answer:
All of the above are possible.
Explanation:
Discussions here center on equilibrium of an economy in a long run, and here after the government activities, their is a decline in dollar value; therefore in the short run, the price level and real GDP will both rise in as much as the price level and real GDP will also both fall. It is also gathered that neither the price leave nor real GDP will change.
The transition from the short run to the long run may be done by considering some short run equilibrium that is also a long run equilibrium as to supply and demand, then comparing that state against a new short run and long run equilibrium state from a change that disturbs equilibrium, say in the sales tax rate, tracing out the short run adjustment first, then the long run adjustment.
A production line is to be designed for a product whose completion requires 19 minutes of work. The factory works 400 minutes per day. Can an assembly line with five workstations make 100 units per day? A. yes, with exactly 250 minutes to spare B. no, but four workstations would be sufficient C. no, it will fall short even with a perfectly balanced line D. yes, with high line efficiency E. cannot be determined from the information given
Answer:
C. No, it will fall short even with a perfectly balanced line.
Explanation:
It is clearly seen here that the workforce does not tally with the target production desired, so it is explained that making the target unit of 100 will certainly fall short, even with a perfectly balanced line.
They could rely on the numbers to make intelligent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price. And they could make wise decisions about whether to invest in or acquire a company, thus promoting the efficient allocation of capital.
What is the difference between change in quantity supplied and change in supply?
Answer:
A change in quantity supplied is a movement along the supply curve in response to a change in price. A change in supply is a shift of the entire supply curve in response to something besides price.
Explanation:
The southern division of Pryto Corporation uses a part much like Part D in one of its products. The southern division can buy this part from an outside supplier for $78.25 per unit. However, the southern division could use Part D instead of this part that it purchases from outside suppliers. What's the most that the southern division would be willing to pay the western division for Product D
Answer: $78.25
Explanation:
The Southern Division is willing to pay $78.25 to an outside company for this part that it needs.
In the same vein, the maximum therefore that they would be willing to pay for the Western Division should be $78.25 as well because anything higher than that would constitute an Opportunity Cost loss.
They should go for the cheaper option and if buying from the Western Division exceeds the $78.25 then it is loss on their part. Western Division should charge the same or less.
Use the following information for Problems 35 through 40 A potential investor is seeking to invest $1,000,000 in a venture, which currently has 2 million shares held by its founders, and is targeting a 50% return five years from now. The venture is expected to produce 1 million dollars in income per year at year 5. It is known that a similar venture recently produced $2,000,000 in income and sold shares to the public for $20,000,000. What is the percent ownership of our venture that must be sold in order to provide the venture investor’s target return?
Answer:
0.3797 or 37.97%
Explanation:
According to the scenario, computation of the given data are as follow:-
Wants Rate on return on investment = 50%
Expected value of return on investment = invested amount × (1+g)^t
= $1,000,000 × (1+50%)^5
= $1,000,000 × 7.59375
= $7,593,750
Similar venture would achieve valuation of $20,000,000 for $2,000,000. We can expect that company would achieve similar valuation of $20,000,000 in 5 years from now.
Investor’s share value at 5 years = $7,593,750 ÷ $20,000,000
= 0.3797 or 37.97%
Scranton, Inc. reports net income of $232,000 for the year ended December 31. It also reports $88,600 depreciation expense and a $5,100 gain on the sale of equipment. Its comparative balance sheet reveals a $35,900 decrease in accounts receivable, a $15,950 increase in accounts payable, and a $12,650 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.
Answer:
Cash flow form operating activities $359,800
Explanation:
$
Net income 232,000
Add depreciation expense 88,600
Add Decrease in receivable 35,900
Increase in account payable 15,950
Decrease in wages ( 12,650)
Cash flow form operating activities 359,800
Increase in payable and decrease in receivable represent cash inflow while decrease in payable and increase in receivables represent cash outflow
A marketing manager wants to build a strong relationship with the customers and to customize messages without high costs. He understands that relationship building and message customization would require constant updating of the database due to the reliance on CRM and he plans to hire staff to make sure the database stays up to date. Based on the manager's consideration, ________ will be the most appropriate promotion mix element.
Answer:
Direct marketing and interactive marketing.
Explanation:
In a case of direct marketing here, they do research, identify customers, select media (TV, direct mail, internet), and create a campaign. But rather than guess whether the message worked, they track the consumer's response. How many people (and of what age, ethnic group, income level) called the number in the catalog, clicked the button on the website, or went to the store for their gift with purchase. This is because direct marketers can measure the results, they can make the next campaign even better.
While in the other hand, interactive marketing explained to be the fastest growing form of marketing where sellers do chats and explanations that comes off as convincing approach of their products to their buyers, this could be physically or online.
During January, a company incurs employee salaries of $2.6 million. Withholdings in January are $198,900 for the employee portion of FICA, $390,000 for federal income tax, $162,500 for state income tax, and $26,000 for the employee portion of health insurance (payable to Company B). The company incurs an additional $161,200 for federal and state unemployment tax and $78,000 for the employer portion of health insurance. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)
Answer:
The journal entries to record would be the following:
Jan-31 Debit Credit
Salaries Expenses $2,600,000
Income Tax payable ($390,000+$162,500) $522,500
FICA Tax payable $198,900
Accounts payable $26,000
Salaries payable Balance $1,822,600
Jan-31 Debit Credit
Salaries Expenses $78,000
Accounts payable $78,000
Jan-31 Debit Credit
Payroll Tax expense $360,100
FICA Tax Payable $198,900
Unemployment Tax Payable $161,200
Explanation:
The journal entries to record would be the following:
To record employee salary expense and withholdings
Jan-31 Debit Credit
Salaries Expenses $2,600,000
Income Tax payable ($390,000+$162,500) $522,500
FICA Tax payable $198,900
Accounts payable $26,000
Salaries payable Balance $1,822,600
To record fringe benefit provided by employer
Jan-31 Debit Credit
Salaries Expenses $78,000
Accounts payable $78,000
To record employer payroll taxes
Jan-31 Debit Credit
Payroll Tax expense $360,100
FICA Tax Payable $198,900
Unemployment Tax Payable $161,200
Fallow Corporation has two separate profit centers. The following information is available for the most recent year: West Division East Division Sales (net) $ 400,000 $ 550,000 Salary expense 46,000 60,000 Cost of goods sold 140,000 255,000 The West Division occupies 10,000 square feet in the plant. The East Division occupies 6,000 square feet. Rent, which was $ 80,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division.
Answer:
Operating Income WEST division 164,000
Explanation:
Fallow Corporation
Income Statement
West Division East Division
Sales (net) $ 400,000 $ 550,000
Cost of goods sold 140,000 255,000
Gross Profit 260,000 295,000
Less Indirect Expenses
Salary expense 46,000 60,000
Rent * 50000 30,000
Operating Income 164,000 205,000
Rent is apportioned on the basis of the square footage.The west division has 10,000 square feet in the plant. The East Division occupies 6,000 square feet.
Rent of West Division = Area of the West/ Total Area (* RENT)
= 10,000/16,000* 80,000= $ 50,000
Rent of East Division = 6,000/16,000* 80,000= $ 30,000
Consider the oil-producing countries of A, B, and C. Each has a marginal cost of zero. World demand is given by Q = 1430 - P. Suppose the three countries form a cartel, and that none of them has an incentive to deviate from the cartel. By how many units lower is the total output of oil under the cartel relative to the Cournot solution?
Answer: 357.50
Explanation:
Under Cournot model that has three firms, each firm produces at
q = (1430 – 0)/((3+1)×1)
= 1430/4
= 357.5 units
Total output = 357.5 × 3
= 1072.5 units
Under cartel, the marginal revenue equals to the marginal cost.
MR = MC = 0
1430 – 2Q = 0
Q = 1430/2
Q = 715 units
Difference= 1072.5 units - 715 units
= 357.5 units
Hence the units are 357.50 units lower in cartel compared to Cournot.
Swifty Corporation is indebted to Blossom under a $1020000, 11%, three-year note dated December 31, 2019. Because of Swifty's financial difficulties developing in 2021, Swifty owed accrued interest of $112200 on the note at December 31, 2021. Under a troubled debt restructuring, on December 31, 2021, Blossom agreed to settle the note and accrued interest for a tract of land having a fair value of $920000. Swifty's acquisition cost of the land is $723000.
Ignoring income taxes, on its 2021 income statement Swifty should report as a result of the troubled debt restructuring_______.
Answer:
On its 2021 income statement Swifty should report as a result of the troubled debt restructuring...
Gain on disposal = $197,000
Restructuring gain = $212,200
Explanation:
We need to find the gain on disposal. Let's use:
Gain on disposal = fair value of land - cost of land.
Where,
Fair value = $920,000
Cost of land = $723,000
Therefore,
Gain on disposal = $920,000 - $723,000 = $197,000
Let's find the gain on restructuring.
Restructuring gain = Loan amount + Accured interest - fair value of land
Where,
Loan amount = $1,020,000
Accured interest = $112,200
Fair value of land = $920,000
Therefore,
Restructuring gain = $1,020,000 + $112,200 - $920,000 = $212,200
On its 2021 income statement Swifty should report as a result of the troubled debt restructuring...
Gain on disposal = $197,000
Restructuring gain = $212,200
Freeman, Inc., reported net income of $40,000 for 20A. The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 20B. Assuming a 30% income tax rate, this situation would cause a 20A deferred tax amount of A) $3,000 (debit). B) $3,000 (credit). C) $ 900 (debit). D) $ 900 (credit).
Answer:
The correct option is D,$900(credit)
Explanation:
The revenue omitted would be increase revenue in the year 20B ,as result net income would also be increased,hence the tax impact of it in the future that should be taken record of now is a deferred tax liability,a tax payable in the year 20B.
The amount of tax deferred is the omitted revenue multiplied by the tax rate of 30% i.e
deferred tax =$3000*30%=$900
This would be credited to deferred tax liability and debited income tax expense.
company is considering establishing a new machine to automate a packing process. The machine will save $ 50,000 in labor annually. The machine can be purchased for $ 250,000 today and will be used for 10 years. It has a salvage value of $5,000 at the end of its useful life. The new machine will require an annual maintenance cost of $ 11,000. The company has a minimum rate of return of 10%. What is the Net present worth and should they buy the machine
Answer:
NPV = $-8,434.17
The firm shouldn't buy the machine
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator:
Cash flow in year 0 = $-250,000
Cash flow each year from year 1 to 9 = $50,000 - $11,000 = $39,000
Cash flow in year 10 = $39,000 + $5,000 = $44,000
I = 10%
NPV = $-8,434.17
The NPV 8s negative and this indicates that the investment would be unprofitable. The firm shouldn't invest in the project.
To find the NPV using a financial calacutor:
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
I hope my answer helps you
If a company is concerned about extending credit to a risky customer, it could do any of the following except: Select one: a. require the customer to pay cash in advance. b. require the customer to provide a letter of credit or a bank guarantee. c. contact references provided by the customer, such as banks and other suppliers. d. provide the customer a lengthy payment period to increase the chance of paying.
Answer:
D. Provide the customer a lengthy payment period to increase the chance of paying.
Explanation:
This is explained to be one of the working ethics found in some working and recruiting bodies or companies.
This trade payables’ payment period ratio here is said to represents the time lag between a credit purchase and making payment to the supplier. As trade payables relate to credit purchases so credit purchases figure should be used in calculating this ratio.
However as the amount of credit purchase is usually not separately available in the income statement so in that case total purchases could be used.
Like other ratios, this ratio is observed over a period of time and compared with the other businesses in the same industry.
Suppose that initially, the economy is in long-run macroeconomic equilibrium at point A. If there is increased pessimism about the future of the economy, the AD curve will shift from ▼ . The new short-run macroeconomic equilibrium occurs at ▼ point A point B point C . Long-run adjustment will shift the SRAS curve from ▼ SRAS 0 to SRAS 1 SRAS 1 to SRAS 0 as workers adjust to lower-than-expected prices. The new long-run macroeconomic equilibrium occurs at ▼ point A point B point C .
Answer:
a) In simple words, higher level of pessimism would result in lesser aggregate demand. Thus, AD will shift from point AD0 to the point AD1. The fresh short time equilibrium is placed at point B (wherein AD1 is conneting to SRAS0). Longer run accostoming will move SRAS curve from point SRAS0 to the pint SRAS1. Hence, the New longer run equilibrium has been placed at point C.
Which of the following is a manufacturing cost?
A. Indirect materials
B. Advertising expense
C. Depreciation of the office equipment used by the sales staff
D. Salary of clerical workers
Answer:
A and C
Explanation:
A manufacturing cost is the depreciation of the office supplies utilized by the sales team and indirect materials. As a result, choices (A) and (C) are the correct stuff.
What is manufacturing cost?The cost of all the resources used to produce a product, collectively referred to as the manufacturing cost, is what is considered. Direct labor, direct material costs, and manufacturing overhead make up the three areas that make up the cost of production. The whole cost of delivery is affected by it.
The raw materials known as "direct materials" are those that are included into the finished good. Applying a chain of processes to maintain a deliverable product provides value to raw materials in manufacturing. For example, welding, cutting, and painting are just a few of the many processes that can be used on raw materials. The difference between direct and indirect materials must be understood.
Hence, option (C) is accurate.
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Carl invested $100,000 in a fund, which earned 8% over the next year. At the end of the year, he invested an additional $50,000 and the fund earned 18% over the next year. Carl withdrew no money from the fund. Which of the following statements about time-weighted return (TWR) and money-weighted return (MWR) is most accurate? Group of answer choices TWR is greater than MWR, and MWR is the more appropriate measure for Carl. MWR is greater than TWR, and MWR is the more appropriate measure for Carl. TWR is greater than MWR, and TWR is the more appropriate measure for Carl. MWR is greater than TWR, and TWR is the more appropriate measure for Carl.
Answer:
(d)MWR is greater than TWR, and TWR is the more appropriate measure for Carl
Explanation
since he is investing in between the year and he is earning 18% return which is higher than the 8% return on his early initial investment so time weighted return would be lower than that of the money weighted return because he is making money on the initial investment at interest that is lower than the interest rate which has been made by him in the middle of the investment period.
money weighted return is not as appropriate as time weighted written because time weighted return always takes into account the proper withdrawals and amount invested in between.
Imagine that your goal is to retire 34 years from today with \$1,000,000$1,000,000 in savings. Assuming that you currently (i.e., today) have \$5,000$5,000 in savings, what rate of return must you earn on that savings to hit your goal? (Hint: Solve your future value formula for the discount rate, RR) *Make sure to input all percentage answers as numeric values without symbols, and use four decimal places of precision. For example, if the answer is 6%, then enter 0.0600.
Answer:
Present value after 34years = 1000000
Cash flow at present= 5000
Using
PV= CF(1+R)^t
1000000=5000(1+R)^34
R=1.169-1
R=0.168(16.8%)
Rate of return must you earn on that savings to hit your goal is 0.168, at the present value of $1000000, this can be calculated as follows
formula for calculating rate of return =
PV= CF(1+R) ^t
Wherein,
PV is Present value after 34years = 1000000
CF is Cash flow at present= 5000
R (rate of return) =?
T, that is time is 34 years
Therefore, with the help of given numbers the rate of return can be calculated as follows:
1000000=5000(1+R) ^34
R=1.169-1
R=0.168(16.8%)
Therefore, an individual with the present value of $1000000 and present cash flow of $5000 can earn a rate of return at 0.168 after 34 years
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Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $69, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 94 percent of par. The second issue has a face value of $55 million, a coupon rate of 5 percent, and sells for 106 percent of par. The first issue matures in 24 years, the second in 9 years.Suppose the most recent dividend was $4.25 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 25 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
10.83%
Explanation:
The simplest way to determine the if we use the Gordon growth model for determining the company's stock price:
stock price = [dividend x (1 + growth rate)] / (WACC - growth rate)
dividend = $4.25g = 4.4%stock price = $69WACC - g = [dividend x (1 + g] / price
WACC = {[dividend x (1 + g] / price} + g
WACC = {[$4.25 x (1 + 4.4%] / $69} + 4.4% = 0.1083 or 10.83%
The property appraisal district for Marin County has just installed new software to track residential market values for property tax computations. The manager wants to know the total equivalent cost of all future costs incurred when the three county judges agreed to purchase the software system. The system has an installation cost of $150,000 and an additional cost of $50,000 at year 10. The annual software maintenance cost is $5,000 for the first 4 years and $8,000 thereafter. If the new system will be used for the indefinite future, find the equivalent present value at a discount rate of 5%.
Answer:
Equivalent annual cost = $16,502.89
Explanation:
Equivalent annual cost = Present Value of cost / Annuity factor
Present value of cost:
PV of additional cost =50,000 ×1.05^(-10)=30,695.66
PV of maintenance cost
First four years= 5,000× (1-1.05^(-4))/0.05=17,729.75
From year 5 to infinity = (8,000/0.05)× 1.05^(-4)=131,632.39
PV of maintenance cost = 17,729.75 + 131,632.396= 149,362.14
PV of costs = 150,000 + 30,695.66 + 149,362.14= 330,057.8112
Annuity factor = 1/r = 1/0.05= 20
Equivalent annual cost = 330,057.8112 /20=$16,502.89
Equivalent annual cost = $16,502.89
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $74,000. The machine would replace an old piece of equipment that costs $19,000 per year to operate. The new machine would cost $9,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $31,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine
Answer:
$7,400 per year
Explanation:
Data provided for computing the annual depreciation expense is here below:-
Automated bottling machine = $74,000
Useful life = 10 years
The calculation of annual depreciation expense is given below:-
Annual depreciation expense = Automated bottling machine ÷ Useful life
= $74,000 ÷ 10
= $7,400 per year
Therefore for computing the annual depreciation expense we simply divide the automated bottling machine by useful life.
This is a partial adjusted trial balance of Pharoah Company. PHAROAH COMPANY Adjusted Trial Balance January 31, 2022 Debit Credit Supplies $760 Prepaid Insurance 1,620 Salaries and Wages Payable $1,080 Unearned Service Revenue 780 Supplies Expense 870 Insurance Expense 540 Salaries and Wages Expense 1,770 Service Revenue 4,350 Prepare the closing entries at January 31, 2022. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer and Explanation:
The closing entries are shown below:
1. Service revenue $4,350
To Income summary 4,350
(Being the closing of service revenue is recorded)
For recording this we debited the sales revenue as it has normal credit balance so to close it we debited it and credited the income summary
2. Income summary $3,180
To Supplies Expense $870
To Insurance Expense $540
To Salaries and Wages Expense $1,770
(Being the closing of all expenses is recorded)
For recording this we debited the income summary and credited all expenses as it has normal debit balance so to close it we credited it
3. Income summary $1,170 ($4,350 - $3,180)
To Retained earnings $1,170
(Being the net income or loss is closed)
Since the revenue is more than the expenses so it would leads to net income and for recording this we debited the income summary and credited the retained earning so that the closing of the net income is recorded
John, a limited partner of Candy Apple, LP, is allocated $30,000 of ordinary business loss from the partnership. Before the loss allocation, his tax basis is $20,000 and his at-risk amount is $10,000. John also has ordinary business income of $20,000 from Sweet Pea, LP, as a general partner and ordinary business income of $5,000 from Red Tomato as a limited partner. How much of the $30,000 loss from Candy Apple can John deduct currently
Answer: $5,000
Explanation:
First of all John's tax basis in Candy Apple is $20,000 and the losses are $30,000. $10,000 of the loss will therefore be suspended as it is more than his tax basis.
Of the remaining $20,000, a further $10,000 will be deducted due to his at-risk amount being $10,000 which means he can only be charged that $10,000.
As John is a limited partner in both Candy Apple and Red Tomato, this means that these are Passive incomes or losses for him and he can use then to offset one another. He will therefore use the $5,000 gained from Red Tomato to offset some of the losses from Candy Apple.
This leaves him with $5,000.
In 2020, Sheffield Corp., issued for $102 per share, 97000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Sheffield's $20 par value common stock at the option of the preferred stockholder. In August 2021, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $25 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock
Answer:
Additional paid-in capital is $4,074,000.
Explanation:
In 2020, Sheffield issued $102 per share and there were 97,000 shares of convertible preferred stock.
Preferred stock = 97,000 shares × $102 = $9,894,000
Also we were told that one preferred stock can be converted to 3 common stock i.e. 3 × Preferred stock = Common stock
Therefore, Common stock = [(97000 shares × 3 shares) × $20] = $5,820,000
Additional paid-in capital = $9,894,000 - $5,820,000 = $4,074,000.
Recent financial statement data for Harmony Health Foods (HHF) Inc. is shown below.
Current liabilities $ 197
Income before interest and taxes $ 116
10% Bonds, long-term 370
Interest expense 37
Total liabilities 567
Income before tax 79
Shareholders' equity
Income tax 22
Capital stock 210
Net income $ 57
Retained earnings 291
Total shareholders' equity 501
Total liabilities and equity $1,068
HHF's times interest earned ratio is (Round your answer to two decimal places.):
a. 10.00.
b. 3.14.
c. 1.54.
d. 2.14.
Current liabilities $ 180
Income before interest and taxes $ 118
10% Bonds, long-term 360
Interest expense 36
Total liabilities 540
Income before tax 82
Shareholders' equity
Income tax 20
Capital stock 201
Net income $ 62
Retained earnings 283
Total shareholders' equity 484
Total liabilities and equity $1,024
HHF's debt to equity ratio is:_____________. (Round your answer to two decimal places.):
a. 0.74.
b. 0.56.
c. 1.12.
d. 1.90.
Answer:
1. B. 3.14
2. C. 1.12
Explanation:
1. Times Interest Earned ratio
Measures how well a company is able to cover it's debt obligations using it's earnings.
The formula is simply,
= Earning before Interest and Tax / Interest Expense
Therefore,
Times Interest Earned ratio = 116/37
= 3.14
HHF's times interest earned ratio is Option B, 3.14.
2. Debt to Equity Ratio
This ratio compares the debt used to fund a company vs it's equity. It measures how much of either way used to fund the company.
The formula is,
= Total Debt / Total Equity
= 540/484
= 1.12
HHF's Debt to Equity ratio is 1.12, Option C.
Data from Dunshee Corporation's most recent balance sheet appear below: Year 2 Year 1 Current assets: Cash $ 130 $ 100 Accounts receivable, net 270 290 Inventory 90 110 Prepaid expenses 10 10 Total current assets $ 500 $ 510 Total current liabilities $ 230 $ 220 Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. The average collection period for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
50 days
Explanation:
THE average collection period for Year 2 is closest to 50 days
Year 2:
cost of goods sold = $730
opening inventory = $110
closing inventory = $90 therefore total inventory = 110 + 90 = $200
Average inventory = $100
to calculate inventory turnover ratio = cost of goods sold / average inventory
= 730 / 100 = 7.30
The average collection period = 365 days / inventory turnover ratio
= 365/7.30 = 50 days
Net income was $469,000. Issued common stock for $76,000 cash. Paid cash dividend of $14,000. Paid $115,000 cash to settle a note payable at its $115,000 maturity value. Paid $124,000 cash to acquire its treasury stock. Purchased equipment for $90,000 cash. Use the above information to determine this company's cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
The company's cash flows from financing activities is ($177,000).
Explanation:
The company
Statement of cash flows (extract)
Proceed from issue of common stock $76,000
Dividends paid ($14,000)
Repayment of note payable ($115,000)
Purchase of treasury stock ($124,000)
Net cash flows from financing activities ($177,000)
