Answer:
SANDHILL CO.
Income Statement
For the Year Ended April 30, 2022
Revenues
Sales revenue $6,200
Expenses
Cost of Goods Sold $1,000
Depreciation expense $315
Income tax expense $175
Insurance expense $360
Interest expense $460
Salaries & Wages expenses $850
Total Expenses $3,160
Net Income $3,040
SANDHILL CO.
Retained Earnings Statement
For the Year Ended April 30, 2022
Retained Earnings, May 1, 2021 $1,700
Add: Net Income $3,040 $4,740
Less: Dividends $310
Retained Earnings, April 30, 2022 $4,430
Finerly Corporation sells cosmetics through a network of independent distributors. Finerly shipped cosmetics to its distributors and is considering whether it should record $220,000 of revenue upon shipment of a new line of cosmetics. Finerly expects the distributors to be able to sell the cosmetics, but is uncertain because it has little experience with selling cosmetics of this type. Finerly is committed to accepting the cosmetics back from the distributors if the cosmetics are not sold. How much revenue should Finerly recognize upon delivery to its distributors
Answer:
The amount of revenue Finerly should recognize upon delivery to its distributors is $0.
Explanation:
From the question, the following two very important points can be observed:
1. Finerly expects the distributors to be able to sell the cosmetics, but is uncertain because it has little experience with selling cosmetics of this type.
2. Finerly is committed to accepting the cosmetics back from the distributors if the cosmetics are not sold.
Since there is an uncertainty that the the distributors will be able to sell the cosmetics and Finerly is committed to accepting them back from the distributors if they are not sold, these imply that the amount of sales revenue cannot be known or reasonably estimated until when the distributors actually sell the cosmetics.
Therefore, the amount of revenue Finerly should recognize upon delivery to its distributors is $0.
contribution marginJayleen Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows. Carpet Kleen Floor Deodorizer Units produced and sold 5,000 4,000 Machine hours used 5,000 2,000 Sales price per unit $ 7 $ 10 Variable cost per unit $ 4 $ 8 Fixed costs of $20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. The contribution margin per machine hour for Floor Deodorizer is:
Answer:
Contribution per machine hour = $4 per machine hour
Explanation:
The contribution per machine is the total contribution made divided by the total machine hours consumed.
Contribution per machine hour = Total contribution/Total machine hours
The total contribution made = Unit contribution × unit sold
unit contribution = selling price - variable cost
= 10-8= $2 per unit
Total contribution = $2× 4,000= $8,000
Total machine hour = 2,000
Contribution per machine hour= 8,000/2,000 = $4 per machine hour
Contribution per machine hour = $4 per machine hour
Q4) The price of a luxury car increased from 42.000 euros to 44.000 euros. Then the demand for
this car declined from 100 units to 20 units. Calculate the price elasticity of demand for the car.
Answer:
Price elasticity of demand = 28.67 (Approx.)
Explanation:
Given:
Old price of car = 42.000 euros
New price of car = 44.000 euros
Quantity of car old = 100 units
Quantity of car new = 20 units
Find:
Price elasticity of car
Computation:
Price elasticity of demand = (Percentage change in quantity)/(Percentage change in price)
Price elasticity of demand = [{(Q2-Q1)100}/{(Q1+Q2)/2}] / [{(P2-P1)100}/{(P1+P2)/2}]
Price elasticity of demand = [{(20-100)100}/{(20+100)/2}] / [{(44000-42000)100}/{(44000+42000)/2}]
Price elasticity of demand = [{-8000}/{60}] / [{200000}/{(43000}]
Price elasticity of demand = 133.33 / 4.65
Price elasticity of demand = 28.67 (Approx.)
Free Flight Corporation, located in Denver, Colorado, produces bicycle accessories, including bicycle helmets which requires a rigid, crushable foam. During the quarter ending June 30, the company manufactured 3,800 helmets, using 2,736 kilograms of foam. The foam cost the company $18,058. According to the standard cost card, each helmet should require 0.66 kilograms of foam, at a cost of $7.00 per kilogram.
Required:
1. What is the standard quantity of kilograms of foam (SQ) that is allowed to make 3,800 helmets?
2. What is the standard materials cost allowed (SQ * SP) to make 3,800 helmets?
3. What is the materials spending variance?
4. What is the materials price variance and the materials quantity variance?
(For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)
1. Standard quantity of kilograms allowed
2. Standard cost allowed for actual output
3. Materials spending variance
4. Materials price variance
Materials quantity variance
Answer:
1. Standard quantity of kilograms allowed 2508kg
2. Standard cost allowed for actual output $17,556
3. Materials spending variance $502 Unfavorable
4. Materials price variance $1094Favorable
Materials quantity variance $1596 unfavorable
Explanation:
1. Calculation to determine the standard quantity of kilograms of foam
Standard quantity of kilograms allowed = 0.66*3800
Standard quantity of kilograms allowed =2508kg
2. Calculation to determine the standard materials cost allowed
Standard cost allowed for actual output = 2508kg *7
Standard cost allowed for actual output=$17,556
3. Calculation to determine the materials spending variance using this formula
Material spending variance = Standard cost - Actual cost
Let plug in the formula
Material spending variance= $17,556- $18,058
Material spending variance= $502 Unfavorable
4. Calculation to determine the materials price variance and the materials quantity variance
Material price variance = (7- $18,058/2,736)*2,736
Material price variance = $1094Favorable
Material quantity variance =(2508kg-2,736)*7
Material quantity variance= $1596 unfavorable
Therefore:
1. Standard quantity of kilograms allowed 2508kg
2. Standard cost allowed for actual output $17,556
3. Materials spending variance $502 Unfavorable
4. Materials price variance $1094Favorable
Materials quantity variance $1596 unfavorable
Novak Corp. has 6000 shares of 5%, $100 par value, cumulative preferred stock and 12000 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2018. The board of directors declares and pays a $55800 dividend in 2019 and in 2020. What is the amount of dividends received by the common stockholders in 2020
Answer:
See below
Explanation:
Given the above data,
Preferred shares = 6,000 shares × $100 = $600,000
Dividend on preference shares = $600,000 × 5% = $30,000 per year
Dividend declared in 2019
= $55,800
Preferred dividend in 2019 = $30,000 × 2 = $60,000
Dividend declared in 2020 =$55,800
Preferred dividend declared in 2020 = $30,000 + $4,200 = $34,200
Dividend paid to common stock holders = $55,800 - $34,200 = $21,600
Vaughn Manufacturing purchased land as a factory site for $1345000. Vaughn paid $116000 to tear down two buildings on the land. Salvage was sold for $8100. Legal fees of $5500 were paid for title investigation and making the purchase. Architect's fees were $46900. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15860. The contractor was paid $4300000. An assessment made by the city for pavement was $9500. Interest costs during construction were $260000.
1. The cost of the land that should be recorded by Wilson Co. is:_____.
a. $989,880.
b. $980,480.
c $996,280.
d. $986,880.
2. The cost of the building should be recorded by Wilson Co. is:_____.
a. 2,804,840.
b. 2,813,200.
c. 2,803,800.
d. 3,014,240.
Answer:
Cost of Land = $1,471,800
Cost of Building = $4,626,960
Explanation:
Note: "The options attached to the question are incorrect because its belongs to another question entirely and this can be seen as attached as picture below"
1. Cost of Land = Purchase Value + Cost Incurred to Tear Down two Buildings - Salvage + Legal Fees + Title Insurance Cost + Assessment Cost
Cost of Land = $1345000 + $116000 - $8100 + $5500 + $3900 + $9500
Cost of Land = $1,471,800
2. Cost of Building = Architect's Fees + Liability Insurance Cost + Excavation Cost + Contractor's Payment + Interest Cost
Cost of Building = $46900 + $4200 + $15860 + $4300000 + 260000
Cost of Building = $4,626,960
The Jenkins Corporation has purchased an executive jet. The company has agreed to pay $200,000 per year for the next 10 years and an additional $1,000,000 at the end of the 10th year. The seller of the jet is charging 6% annual interest. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Determine the liability that would be recorded by Jenkins.'
Answer:
Present value of liability = $2,030,412.1871 rounded off to $2,030,412.19
Explanation:
To calculate the amount that would be recorded as a liability, we need to find the present value of the jet. The present value can be calculated by discounting the cash flows provided in the question. The 200000 cash flows that will be payable every year are in the form of an ordinary annuity and their present value will be calculated using the attached formula. The present value of 1000000 that is payable at the end of the 10th year will be calculated as follows,
Present Value of Cash flow = Cash Flow / (1+r)^t
Where,
r is the discount rate t is the time periodPresent value of liability = 200000 * [(1 - (1+0.06)^-10) / 0.06] +
1000000 / (1+0.06)^10
Present value of liability = $2,030,412.1871 rounded off to $2,030,412.19
Pankraz Corporation, a calendar year taxpayer, is formed on April 1, 2020. In connection with its formation, it incurs organizational expenditures of $54,000. Pankraz wants to claim as much of these expenses as soon as possible. Round per month amount to two decimal places. Round your final answer to the nearest dollar. Therefore, its deduction for 2020 is $fill in the blank 1
Answer:
$3,650
Explanation:
Calculation to determine its deduction i
First step is to calculate the Expense
Expense=$5,000 - ($54,000 - $50,000)
Expense=$5,000-$4,000
Expense= $1,000
Second step is to calculate the Amortization
Amortization= ($54,000 - $1,000)/180 months
Amortization= $294.44 x 9 months
Amortization= $2,649.99
Amortization= $2,650 (Approximately)
Now let calculate the total deduction
Total deduction =$1,000 + $2,650
Total deduction= $3,650
Therefore, its deduction for 2020 is $3,650
How to account for this $45,000? I think, this could be as Salary or dividend.
When Scott and Allison are in the store, they are the only ones who operate the register. Scott admits that, because he is in too much of a hurry, he sometimes puts the cash in his pocket rather than take the time to ring up the sale. Having cash in hand allows him to pay his babysitter and other personal expenses. Though it was difficult for him to be certain, Scott estimated that transactions worth about $45,000 each year have been handled in this way. Scott confirmed that he has not filed a personal tax return since he started GPP because he has not taken a salary.
Answer:
Scott should file Personal tax return since he is running his expenses through the money he takes in hand.
Explanation:
Scott will have to file the tax return because he is taking $45,000 as a salary. It does not matter that the salary is run through bank account or through cash but personal tax return filing is necessary. He uses the money to fund his routine expenses and this is to be reported in personal tax filing.
Use General Mills financial statements to answer questions in this section. All answers should be for the most recent fiscal year unless otherwise stated. For all questions in this section, enter all numbers exactly as they appear in the financial statements. This includes intermediate calculations. If it is stated as a decimal in the financials, use the same decimal in your answer. Answer without dollar signs and other symbols.
Answer:
27.4 days
Explanation:
Accounts receivable turnover days :
365 / Receivable turnover ratio
Receivable turnover ratio :
Sales / Average accounts receivables
12,442,000,000 / 932,500,000 = 13.34
Account receivable turnover days :
365 / 13.34 = 27.4 days
Marston Manufacturing Company is considering a project that requires an investment in new equipment of $3,600,000, with an additional $180,000 in shipping and installation costs. Marston estimates that its accounts reveivable and inventories need to increase by $720,000 to support the new project, some of which is financed by $288,000 increase in spontaneous liabilites (accounts payable and accruals).
The total cost of Martson's new equipment is ___________
a. $3,780,000
b. $4,212,000
c. $720,000
Answer:
a. $3,780,000
Explanation:
According to the scenario, calculation of the given data are as follows
New equipment = $3,600,000
Shipping and installation = $180,000
We can calculate the total cost of Martson's new equipment by using following formula,
Total Cost = New equipment cost + Shipping and Installation cost
By putting the value, we get
Total Cost = $3,600,000 + $180,000
= $3,780,000
Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Robert’s $100,000 salary. In addition to his compensation, ABC pays Robert dividends of $250,000. What is Robert’s qualified business income? Would your answer to part (a) change if you determined that reasonable compensation for someone with Robert’s experience and responsibilities is $200,000? Why or why not
Answer and Explanation:
a. The calculation of the robert qualified business income is shown below:
Since robert is the sole shareholder and CEO of the ABC Inc and earned the income of $325,000 after subtracting the deduction of $100,000 salary
Also their is a dividend of $250,000
But the qualified business income should be equivalent to the net income i.e. $325,000
b. In the case when there is $200,000 so the net income would be decreased by $100,000
Now the qualified business income is
= $325,000 - $100,000
= $225,000
One day, Barry the Barber, Inc., collects $400 for haircuts. Over this day, his equipment depreciates in value by $50. Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future. From the $220 that Barry takes home, he pays $70 in income taxes.
a. gross domestic product
b. net national product
c. national income
d. personal income
e. disposable personal income
Answer: See explanation
Explanation:
a. gross domestic product
The GDP is $400 which is the money that Barry collects for haircut.
b. net national product
Net National Product:
= GDP – Depriciation
= $400 - $50
= $350
c. national income
The national income is the total income that the residents of the country earns and this will be same as Net National Product which is $350
d. personal income
Personal income:
= National income – Retained earnings
= $350 - $100 - $30
= $220
e. disposable personal income
Disposable personal income:
= Personal income – Personal tax
= $220 - $70
= $150
In its most recent annual report, Appalachian Beverages reported current assets of $54,000 and a current ratio of 1.80. Assume that the following transactions were completed: (1) purchased merchandise for $6,000 on account, and (2) purchased a delivery truck for $10,000, paying $1,000 cash and signing a two-year promissory note for the balance.
Compute the updated current ratio (round answers to 2 decimal places)
Transaction (1) ________________
Transaction (2) ________________
Answer:
Current Ratio - Transaction 1 = 1.6666 rounded off to 1.67
Current Ratio - Transaction 2 = 1.6388 rounded off to 1.64
Explanation:
The current ratio is a measure of liquidity which measures the amount of current assets a business has to pay off each $1 of current liability. It is calculated as follows,
Current Ratio = Current Assets / Current Liabilities
We know the initial current ratio and current assets. The initial current liabilities will be,
1.8 = 54000 / Current Liabilities
Current Liabilities = 54000 / 1.8
Current Liabilities = $30000
Transaction 1
The result of transaction 1 will be that the current assets will increase by $6000 as inventory increases and the current liabilities will also increase by $6000 as accounts payable are increasing. The new current ratio will be,
Current Ratio - Transaction 1 = (54000 + 6000) / (30000 + 6000)
Current Ratio - Transaction 1 = 1.6666 rounded off to 1.67
Transaction 2
The result of transaction 2 will be that the current assets will decrease by $1000 as payment for truck which is a fixed asset is made partly by cash and the current liabilities will not increase as the note signed for the remaining payment of the truck is due after 2 years thus it is a non current liability. The new current ratio will be,
Current Ratio - Transaction 2 = (54000 + 6000 -1000) / (30000 + 6000)
Current Ratio - Transaction 2 = 1.6388 rounded off to 1.64
The following information is available for Sweet Acacia Industries for the year ended December 31, 2022. $38,400 Beginning cash balance Accounts payable increase 9,120 Depreciation expense 65,600 Accounts receivable decrease 7,680 Inventory decrease 4,960 Net income 91,520 Cash received for sale of land at book value 166,400 Cash dividends paid 60,800 Income taxes payable decrease 6,240 129,600 Cash used to purchase land 105,600 Cash used to redeem bonds 256,000 Cash received from issuing stock
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis eg. (15,000).)
Answer:
Sweet Acacia Industries
Statement of Cash Flows
For the Year Ended December 31, 2022
Cash Flows from Operating Activities:
Net income $91520
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense 65600
Decrease in Accounts Receivable 7680
Decrease in inventory 4960
Increase in accounts payable 9120
Decrease in Income tax payable -6240 $81120
Net cash provided by operating activities $172,640
Cash Flows from Investing Activities:
Sale of Land 166400
Purchase of Land -129600
Net Cash Provided by Investing Activities $36,800
Cash Flows from Financing Activities:
Payment of Dividends -60800
Issuance of Stock 256000
Redemption of Bonds -105600
Net Cash provided by Financing Activities $89,600
Net Increase in Cash $299,040
Cash at Beginning of Period $38,400
Cash at End of Period $337,440
1. Prepare general journal entries for the transactions.
Mitchell Parts Co. had the following plant asset transactions during the year:
1. Assets discarded or sold:
Jan. 1 Motor #12, which had a cost of $2,890 and accumulated depreciation of
$2,890, was discarded.
8 Motor #8, which had a cost of $4,440 and accumulated depreciation of
$4,020, was sold for $260.
14 Motor #16, which had a cost of $5,730 and accumulated depreciation of
$5,490, was sold for $470.
2. Assets exchanged or traded in:
Feb. 1 Motor #6, which had a cost of $5,860 and accumulated depreciation of
$4,590, was traded in for a new motor (#22) with a fair market value of
$6,800. The old motor and $5,300 in cash were given for the new motor.
9 Motor #9, which had a cost of $5,420 and accumulated depreciation of
$4,940, was traded in for a new motor (#23) with a fair market value of
$6,450. The old motor and $6,170 in cash were given for the new motor.
Answer:
1. Accumulated Depreciation (Dr.) $2,890
Motor #12 (Cr.) $2,890
2. Cash (Dr.) $260
Accumulated Depreciation (Dr.) $4,020
Loss on Sale (Dr.) $160
Motor #8 (Cr.) $4,440
3. Cash (Dr.) $470
Accumulated Depreciation (Dr.) $5,490
Gain on Sale (Cr.) $230
Motor #16 (Cr.) $5,730
Explanation:
1. New Motor #22 (Dr.) $6,800
Accumulated Depreciation (Dr.) $4,590
Gain on Sale (Cr.) $230
Motor #6 (Cr.) $5,860
Cash (Cr.) $5,300
2. New Motor #23 (Dr.) $6,450
Accumulated Depreciation (Dr.) $4,940
Loss on Sale (Dr.) $200
Motor #9 (Cr.) $5,420
Cash (Cr.) $6,170
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.70. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $3.6 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
$7.95
Explanation:
The computation of the price at which the stock should sell is shown below;
But before we need to determine the following calculations
Sustainable growth rate, g is
= ROE × b
= 9% × (2 ÷3)
= 6%
Now
Cost of Equity = Rf + beta × (Rm - Rf)
= 5% + 1.70 ×(15% - 5%)
= 22%
Now finally the Price is
= D1 ÷ (r - g)
= $3.6 × 1 ÷ 3 × (1 + 6%) ÷ (22% - 6%)
= $7.95
Crane Company began operations in 2020 and determined its ending inventory at cost and at LCNRV at December 31, 2020, and December 31, 2021. This information is presented below. Cost Net Realizable Value 12/31/20 $354,700 $331,550 12/31/21 413,510 394,540 (a) Prepare the journal entries required at December 31, 2020, and December 31, 2021, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method.
Answer and Explanation:
a. The journal entries are shown below
Cost of goods sold ($354,700 - $331,550) $23,150
To Allowance for reduction in inventory to NRV $23,150
(Being allowance for reduction is recorded)
Allowance for reduction in inventory to NRV ($23,150 - ($413,510 - $394,540)) $4,180
To Cost of good sold $4,180
(being recording of the previous loss)
These two entries should be recorded at LCNRV method
Jasmine Corporation purchased inventory costing $125,000 and sold 75% of the goods for $163,750. All purchases and sales were on account. Jasmine later collected 25% of the accounts receivable. Assume that sales returns are nonexistent.
1. Journalize these transactions for Jasmine, which uses the perpetual inventory system.
2. For these transactions, show what Jasmine will report for inventory, revenues, and expenses on its financial statement at the end of the month. Report gross profit on the appropriate statement. Assume beginning inventory is $0.
Answer:
Part 1
Purchase journal
Debit : Merchandise Inventory $125,000
Credit : Accounts Payable $125,000
Sales journal
Debit : Accounts Receivable $163,750
Debit : Cost of Sales ($125,000 x 75%) $93,750
Credit : Sales Revenue $163,750
Credit : Inventory $93,750
Collection of Payments journal
Debit : Cash ($163,750 x 25%) $40,938
Credit : Accounts Receivable $40,938
Part 2
Inventory = $31,250
revenues = $163,750
expenses = $93,750
gross profit = $70,000
Explanation:
inventory = Purchases - Cost of sales
= $125,000 - $93,750
= $31,250
revenues = Sales to Customers paid up or not
= $163,750
expenses = Cost of sales
= $93,750
gross profit = Sales - Cost of sales
= $163,750 - $93,750
= $70,000
Waterways has a sales mix of sprinklers, valves, and controllers as follows.
Annual expected sales:
Sale of sprinklers 460,000 units at $26.50
Sale of valves 1,480,000 units at $11.20
Sale of controllers 60,000 units at $42.50
Variable manufacturing cost per unit
Sprinklers $13.96
Valves $7.95
Controllers $29.75
Fixed manufacturing overhead cost (total) $760,000
Variable selling and administrative expenses per unit:
Sprinklers $1.30
Valves $0.50
Controllers $3.41
Fixed selling and administrative expenses (total) $1,600,000
A) Determine the sales mix based on unit sales for each product.
B) Using the annual expected sales for these products, determine the weighted-average unit contribution margin for these three products.
C) Assuming the sales mix remains the same, what is the break-even point in units for these products?
Answer:
A.
Sales Mix is 23 : 74 : 3
B.
$567.17
C.
sprinklers = 95,726 units
valves = 303,826 units
controllers = 12,486 units
Explanation:
the sales mix based on unit sales for each product
sprinklers = 460,000 units
valves = 1,480,000 units
controllers = 60,000 units
this can then be expressed as :
460,000 : 1,480,000 : 60,000
expressed in lowest terms as :
23 : 74 : 3
the weighted-average unit contribution margin for these three products.
weighted-average unit contribution margin is the sum of contribution per units with the mix applied to each contribution margin.
unit contribution margin are
sprinklers = $12.54
valves = $3.25
controllers = $12.75
weighted-average unit contribution margin = $12.54 x 23 + $3.25 x 74 + $12.75 x 3 = $567.17
the break-even point in units for these products
break-even point in units = Fixed Cost ÷ Contribution per unit
= ($760,000 + $1,600,000) ÷ $567.17
= 4,162 units
Multiplying this with each mix we have :
sprinklers = 95,726 units
valves = 303,826 units
controllers = 12,486 units
The trial balance of G. Durler Company at the end of its fiscal year, August 31, 2008, includes these account: Merchandise Inventory $17,200; Purchases $149,000; Sales $190,000; Freight-in $4,000; Sales Returns and Allowances $3,000; Freight-out $1,000; and Purchases Returns and Allowances $2,000. The ending merchandise inventory is $25,000.
Prepare a cost of goods sold section for the year ending August 31 (periodic inventory).
Answer and Explanation:
The preparation of the cost of goods sold section for the year ended is as follows;
Cost of goods sold section
G. Durler Company
For the year ending August 31
Beginning inventory $17,200
Add: Purchases $149,000
less purchase returns and Allowances $2,000
Net purchases $147,000
Add: Freight-in $4,000
less ending inventory is -$25,000
Cost of goods sold $143,200
The cost of goods sold section for the year ending August 31 (periodic inventory) is $143,200.
G. Durler Company Cost of goods sold section for the year ending August 31
Beginning inventory $17,200
Add Purchases $149,000
Less purchase returns and Allowances ($2,000)
Net purchases $147,000
($149,000-$2,000)
Add Freight-in $4,000
Less Ending inventory ($25,000)
Cost of goods sold $143,200
($17,200+$147,000+$4,000-$25,000)
Inconclusion the cost of goods sold section for the year ending August 31 (periodic inventory) is $143,200.
Learn more about cost of goods sold here:https://brainly.com/question/21127296
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.65. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $2.8 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 14%, and T-bills currently offer a 6% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Calculate the P/E ratio.
Answer:
a.
P0 = $7.49494949492 rounded off to $7.49
b.
P/E ratio = 2.67676767676 times rounded off to 2.68 times
Explanation:
a.
The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 * (1+g) is the dividend expected in Year 1 or next year g is the constant growth rate in dividends r is the discount rate or required rate of returnWe first need to calculate the values for D0, g and r.
D0 can be calculate by multiplying the earnings per share by (1 - Plowback Ratio)
D0 = 2.8 * (1 - 2/3)
D0 = $0.93333333333 rounded off to $0.93
To calculate the value of g, we need to multiply the ROE by the Plowback ratio.
g = 0.09 * 2/3
g = 0.06 or 6%
To calculate the value of r, we will use the CAPM equation.
r = risk free rate + Beta * (Market return - risk free rate)
r = 0.06 + 1.65 * (0.14 - 0.06)
r = 0.192 or 19.2%
P0 = 0.93333333333 * (1+0.06) / (0.192 - 0.06)
P0 = $7.49494949492 rounded off to $7.49
b.
The P/E ratio can be calculated by dividing the price per share by the earnings per share.
P/E = 7.49494949492 / 2.8
P/E ratio = 2.67676767676 times rounded off to 2.68
For each of the three independent situations below determine the amount of the annual lease payments. Each describes a finance lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected fair value that the exercise of the option appears reasonably certain.
Situation 1 Situation 2 Situation 3
Lease term (years) 5 10 4
Lessor?s rate of return 10% 11% 9%
Fair value of leased asset $62,000 $421,000 $186,000
Lessor?s cost of leased asset $51,000 $421,000 $146,000
Bargain purchase option:
Option price $11,000 $51,000 $23,000
Exercisable at end of the year: 5 5 3
Required:
Determine the annual lease payments for each situation:
Answer:
a. The annual lease payment for Situation 1 is $12,774.47.
b. The annual lease payment for Situation 2 is $71,486.40.
c. The annual lease payment for Situation 3 is $57,412.37.
Explanation:
The annual lease payments can be calculated using the formula for calculating loan amortization as follows:
P = (A * (r * (1 + r)^n)) / (((1+r)^n) - 1) .................................... (1)
Where,
For Situation 1
P = Annual lease payments = ?
A = Fair value of leased asset = $62,000
r = interest rate = Lessor’s rate of return = 10%, or 0.01
n = Number of years of lease term = 5
Substituting all the figures into equation (1), we have:
P = ($62,000 * (0.01 * (1 + 0.01)^5)) / (((1+0.01)^5) - 1)
P = $12,774.47
Therefore, the annual lease payment for Situation 1 is $12,774.47.
For Situation 2
P = Annual lease payments = ?
A = Fair value of leased asset = $421,000
r = interest rate = Lessor’s rate of return = 11%, or 0.11
n = Number of years of lease term = 10
Substituting all the figures into equation (1), we have:
P = ($421,000 * (0.11 * (1 + 0.11)^10)) / (((1 + 0.11)^10) - 1)
P = $71,486.40
Therefore, the annual lease payment for Situation 2 is $71,486.40.
For Situation 3
P = Annual lease payments = ?
A = Fair value of leased asset = $186,000
r = interest rate = Lessor’s rate of return = 9%, or 0.09
n = Number of years of lease term = 4
Substituting all the figures into equation (1), we have:
P = ($186,000 * (0.09 * (1 + 0.09)^4)) / (((1 + 0.09)^4) - 1)
P = $57,412.37
Therefore, the annual lease payment for Situation 3 is $57,412.37.
Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 119,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: September 15$0.61 September 30 0.65 October 15 0.60 Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements.
Answer:
Exchange rate on September 15: 1 Crown = $0.61; 119,000 Crown = (119,000*$0.61) = $72,590.
September 30 = (119,000*0.65) = $77,350.
October 15 = (119,000*$0.60) = $71,400.
JOURNAL ENTRY
Date Account Debit Credit
15-Sep Account receivable $72,590
Sales $72,590
(Sale to a foreign customer for 119,000 crown Exchange rate = $0.61)
30-Sep Account receivable $4,760
Foreign currency exchange gain $4,760
($77,350-$72,590)
15-Oct Foreign currency exchange loss $5,950
Account receivable $5,950
($71,400-$77,350)
Cash $77,350
Accounts Receivable $77,350
A firm has current assets that could be sold for their book value of $22 million. The book value of its fixed assets is $60 million, but they could be sold for $90 million today. The firm has total debt with a book value of $40 million, but interest rate declines have caused the market value of the debt to increase to $50 million. What is this firm's market-to-book ratio
Answer:
the firm market to book ratio is 1.48
Explanation:
The computation of the market to book ratio is shown below:
The Market values is
= $22 million + $90 million - $50 million
= $ 62 million
And, the Book values is
= $22 million + $60 million - $40 million
= $42 million
Now the firm market to book ratio is
= $62 million ÷ $42 million
= 1.48
Hence, the firm market to book ratio is 1.48
Think about a financial decision you made regarding the purchase of a big-ticket item or investment within the last five years. Provide a summary on the discussion thread, answering the following questions:What decision did you make?How prepared were you to make the decision?What was your thought process as you were making the decision?What financial information did you need to make the decision and why?What lessons have you learned that you will apply to future financial decisions?
Ahnberg Corporation had 660,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 280,000 shares of convertible preferred stock. The preferred shares are convertible into 560,000 shares of common stock. During the year Ahnberg paid $168,000 cash dividends on the preferred stock. Net income was $1,950,000.
What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.)
Answer:
Basic Earnings per share=$2.70
Diluted earnings per share(EPS)=$1.50
Explanation:
Earnings per share is the total earnings attributable to ordinary shareholders divided by the number of units of common stock .
It represents profit per unit of stock unit held by common stock holder investor. The higher, the more profitable and the better.
Earnings per share = Earnings attributable to ordinary shareholders / units of common stock
Earnings attributable to ordinary shareholders= Net income after tax - preference dividend
Net Income for the year $1,950,000
Preference Dividend $168,000
Earnings attributable to ordinary shareholders for 2021= 1,950,000-168,000=1,782,000
Basic Earnings per share=$1,782,000/660,000shares=$2.70
Basic Earnings per share=$2.70
Diluted earnings per share(EPS)=Earnings attributable to ordinary shareholders/ Total number of shares assuming conversion
Diluted earnings per share(EPS)=$1,782,000/(660,000+560,000) units
Diluted earnings per share(EPS)=$1.50
Amy and Builders Corporation enter into a contract in which Amy agrees to deliver cement to Builders at a construction site. They neglect to include a price in the agreement. A court will a. determine a reasonable price for the cement and insert it into the contract. b. leave the parties in the position in which it found them. c. refuse to enforce the agreement. d. select the lowest quoted price for cement and insert it into the contract.
Answer:
a. determine a reasonable price for the cement and insert it into the contract.
Explanation:
Since in the question it is mentioned that the amy & builders corporation would entered into a contract where amy agrees to deliver the cement at the construction site. At the same time they deny to include the price in the agreement. So here the court would say that calculate the price for the cement and the same would be involved in the contract as without price the contract is not valid
Hence, the option a is correct
Think about an organizational change that recently affected you. This could be a change at work in which jobs or procedures were changed, or it could be a change at school, such as a change in curriculum requirements or major revisions in registration procedures. How effectively did the organization manage the change? What could the organization have done differently to reduce resistance to the change? Your post should reflect the terms and concepts in Chapter 15.
Explanation:
One good example is the recent change in the way we learn at school (remote learning). For many students, it was the first time they had to receive instructions from a teacher via videoconferencing.
Many organizations tried to adjust to this new normal, however, most organizations were confused about what training to provide, how long to should they plan for, etc.
Reports say that many teachers found it difficult to adapt to this method of teaching, hence, some were resistant to this change. However, if proper enlightenment were carried out, as well as employing some motivational factors, such resistance to change would have been minimal.
Jane Tucker is the ethics officer for a publicly traded company. She is concerned that the company does not have a mechanism for anonymous reports of issues by employees. The CEO is not inclined to spend the money required to set up a hotline or any other reporting mechanism. Which of the following statements is true about this situation?
A) As long as the company has an ethics officer to whom employees can report concerns, it has done everything necessary to enjoy the protections under the Federal Sentencing Guidelines.
B) With Jane as an ethics officer and adding in a code of ethics, the company has met the two required prongs for the Federal Sentencing Guidelines.
C) Without an anonymous reporting system, the company does not meet the minimum requirements for the protections of the Federal Sentencing Guidelines.
D) The Federal Sentencing Guidelines protections do not apply to publicly traded companies under Dodd-Frank.
Answer: C) Without an anonymous reporting system, the company does not meet the minimum requirements for the protections of the Federal Sentencing Guidelines.
Explanation:
Based on the information given, it should be noted that since there's no anonymous reporting system, the minimum requirements for the protections of Federal Sentencing Guidelines isn't met by the company.
The Federal Sentencing Guidelines simply refers to the rules that with regards to the uniform policy through which the individuals and the organizations that have been convicted of felonies and every other misdemeanors are set up. In this case, the requirements hasn't been met since there is no anonymous reporting system.
