Answer:
current bond price $1,000
interest rate 10%
Laurel bond matures in 5 years, 10 semiannual payments
Hardy bonds matures in 16 years, 32 semiannual payments
if market interest increases to 12%
Laurel bond:
$1,000 / (1 + 6%)¹⁰ = $558.39
$50 x 7.36009 (annuity factor, 6%, 10 periods) = $368.00
market price = $926.39
% change = -7.36%
Hardy bond:
$1,000 / (1 + 6%)³² = $154.96
$50 x 14.08404 (annuity factor, 6%, 32 periods) = $704.20
market price = $859.16
% change = -14.08%
current bond price $1,000
interest rate 10%
Laurel bond matures in 5 years, 10 semiannual payments
Hardy bonds matures in 16 years, 32 semiannual payments
if market interest decreases to 8%
Laurel bond:
$1,000 / (1 + 4%)¹⁰ = $675.56
$50 x 8.1109 (annuity factor, 4%, 10 periods) = $405.55
market price = $1,081.11
% change = 8.11%
Hardy bond:
$1,000 / (1 + 4%)³² = $285.06
$50 x 14.08404 (annuity factor, 4%, 32 periods) = $704.20
market price = $1,178.74
% change = 17.87%
The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050. Refer to the data for Wilson Dover Inc. What is the value (in millions) of Wilson Dover's debt if its equity is viewed as an option?
Answer:
$313.81
Explanation:
Calculation for the value (in millions) of Wilson Dover's debt if its equity is viewed as an option
Total value = P = $500.0
Debt = X = $200.0
Volatility (σ) = 0.6
rRF = 5%
d1 = 1.910485
N(d1) = 0.9720
d2= 1.310485
N(d2)=0.9050
Using this formula
Vs= PN(d1) − Xe−RFtN(d2)
Let plug in the formula
Vs= $500(0.9720) − $200e−0.05(1)(0.9050)
Vs= $485.98 − $172.17
Vs= $313.81
Therefore the value (in millions) of Wilson Dover's debt if its equity is viewed as an option will be $313.81
Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2014 are presented below.
End of Year Beginning of Year
Cash and cash equivalents $ 795 $ 72
Accounts receivable (net) 2,035 1,942
Inventory 898 900
Other current assets 326 303
Total current assets $4,054 $3,217
Total current liabilities $2,014 $1,601
For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million.
Instructions:
Compute the current ratio, current cash debt coverage, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year.
Answer:Please see explanation for answers
Explanation:
A) Current Ratio = Current Assets / Current Liabilities
Total Current Assets = $4,054million
Total Current Liabilities = $2,014million
Current Ratio = 4,054 / 2,014 = 2.01 : 1
B. Current Cash Debt Coverage Ratio = Cash flow Provided by Operating Activities / Average Current Liabilities
Average Current Liabilities = 2,014 + 1,601= 3,615 / 2 = $1,807.5
Current Cash Debt Coverage Ratio = 1,251 / 1,807.5 = 0.6921
C. Accounts receivable Turnover = Net Sales / Average Accounts Receivables
Average Account Receivable = 2,035 + 1,942= 3,977 / 2 = $1,988.50million
Net Sales = $8,258million
Account Receivable Turnover = 8,258million / 1,988.50million = 4.15 Times
D. Average Collection Period: 365 / Account Receivable Turnover
Average Collection Period = 365 / 4.15 = 87.95 Days
E. Inventory Turnover = Cost of Goods Sold / Average Inventory
Cost of Goods Sold = 5,328million ,
Average Inventory = 898 + 900 =1,798 / 2 = 899
Inventory Turnover = 5,328 / 899 = 5.93 Times
F. Days in Inventory = 365 / Inventory Turnover Ratio
Days in Inventory = 365 / 5.93 = 61.55 Days
Griffin's Goat Farm, Inc., has sales of $604,000, costs of $255,000, depreciation expense of $53,000, interest expense of $35,000, and a tax rate of 23 percent. What is the net income for this firm
Answer:
The answer is $200,970
Explanation:
Solution
Given that
Now
Sales =$604,000
Costs= $255,000
Depreciation=$53,000
Thus
EBIT (Earnings before taxes and interest)=$296,000
The interest Expense = $35,000
Taxable income =$200,970
Taxes($261,000 * 23% =$60,030
The net income = $200,970
Therefore the net income for the firm is $200,970
Answer:
$200,970
Explanation:
Hope this helps
The main goal of monetary policy is to shift Choose one or more: A. aggregate demand. B. short-run aggregate supply. C. long-run aggregate supply.
Answer: aggregate demand
Explanation:
Monetary policy, is the demand side of an economic policy that is used by the government through the central bank in order to control the money supply that is available in the economy so as to achieve macroeconomic goals that will bring about economic growth.
The main goal of monetary policy is to shift the aggregate demand. Increase or decrease in money supply can either shift the aggregate demand to the right or to the left depending on whether the government wants to use the expansionary or the contractionary method.
When you take your first job, you decide to start saving right away for your retirement. You put $5,000 per year into a saving plan, which interest rate 10% per year. Five years later, you move to another job and stop making contributions to the saving plan. If the first plan continued to earn interest for another 35 years, determine the future worth in year 40.
Answer:
FV= $857,840.94
Explanation:
Giving the following information:
First investment:
Annual deposit= $5,000 per year
Interest rate= 10%
Number of years= 5
Second investment:
Number of years= 35
Interest rate= 10%
Lumpsum= first investment
First, we need to calculate the future value of the first investment. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {5,000*[(1.1^5) - 1]} / 0.10
FV= $30,525.5
Now, the future value of the second investment.
FV= PV*(1+i)^n
FV= 30,525.5*(1.1^35)
FV= $857,840.94
The implication of the expectations theory that expected returns for a holding period must be the same for bonds of different maturities depends on the assumption that________.
1. Yiels curves usually slope downward
2. Yiels curves usually slope downward
3. Instruments with different maturities are perfect subtitute
4. Savers are usually risk averse
Answer:
i think the answer is intruments with different matuirties are perfect subtitute. i'm not sure but i think this is the answer.
Explanation:
McLin, Inc., is a calendar year S corporation. Its AAA balance is zero. Determine the tax aspects of the following transactions. If an amount is zero, enter "0". a. McLin holds $90,000 of AEP. Tobias, the sole shareholder, has an adjusted basis of $80,000 in his stock. Tobias is paid a $90,000 salary. Ignore the 20% QBID.
Answer:
$10,000
Explanation:
Given that:
McLin holds $90,000 of AEP, this implies what is salary is made of;
Tobias, the sole shareholder, has an adjusted basis of $80,000 in his stock.
Tobias is paid a $90,000 salary income.
Ignore the 20% QBID
We are to determine the tax aspects of the transactions
Since the company receives a $90000 for salary expense. Thus Tobias basis is zero, then :
The tax aspect of the transaction is : ($90000 - $80000)
The tax aspect of the transaction = $10,000
24. You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 12% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months
Answer:
The most expensive car can be afforded is = $17290.89
Explanation:
The down payment of a new car = $4000
The mothly payment (annuity ) = $350
Interest rate on the rate = 12% = 12% / 12 per month.
Now we have to calculate the most expensive car that can be afforded with the finance time of 48 months.
Below is the calculation:
[tex]Present \ value = annuity \times \left [ \frac{1-(1+r)^{-n}}{r} \right ] \\= 350 \times \left [ \frac{1-(1+ 0.01)^{-48}}{0.01} \right ] \\= 13290.89 \\[/tex]
[tex]\text{Total value of car} = savings + present \ value \\= 4000 + 13290.89 \\= 17290.89[/tex]
Honda’s BP program involves: a. A formalized approach for teaching the supplier to improve its own processes b. Tight control of suppliers c. Elimination of the bottom 10% of suppliers at the end of the program d. All of the above e. Only a and b
Answer:
a.
Explanation:
A BP Program or Best Practices Program is one that focuses on the process of reviewing different policy alternatives that have been proven to be effecting when dealing with certain issues in the past that have reoccurred in the present and applying them. Honda's unique BP program involves a formalized approach for teaching the supplier to improve its own processes in order for them not to have to outsource.
The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company's financial condition and performance. Cute Camel Woodcraft Company is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet. Cute Camel Woodcraft CompanyBalance Sheet for Year Ending December 31 (Millions of Dollars) Year 2 Year 1 Year 2 Year 1 Assets Liabilities and equity Current assets: Cash and equivalents Accounts rece vable Inventories Total current assets Net fixed assets Net plant and equipment Current liabilities: $2,767 Accounts payable $0 176 996 $0 1,266 3,712 8,437 1,013 Accruals 2,970 Notes payable $6,750 Total current liabilities 937 $937 2,813 $3,750 Long-term debt 3,515 8,250 Total debt $4,687 Common equity: Common stock Retained earnings 9,141 7,313 3,937 Common stock Retained earnings Total common equity 9,141 7,313 Y 3,937 11,250 $15,000 $14,063 Total assets $18,750 15,000 Total liabilities and equity $18,750 Given the information in the preceding balance sheet-and assuming that Cute Camel Woodcraft Company has 50 million shares of common stock outstanding-read each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet.
Cute Camel's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year 1 to Year 2
This statement is,_________ because:
A) Cute Camel's total current asset balance actually increased from $6,750 million to $8,437 million between Year 1 and Year 2
B) Cute Camel's total current liabilities balance decreased by $1,687 mililion between Year 1 and Year 2
C) Cute Camel's total current liabilities balance increased from $1,013 million to $1,266 million between Year 1 and Year 2
Answer:
1. Year 2 Cash and Cash Equivalents = Current Assets - Accounts Receivable - Inventories
= 8,437 - 1,266 - 3,712
= $3,459
2. Year 2 Net Plant & equipment = Total assets - Total current assets
= $18,750 - 8,437
= $10,313
3. Year 2 Total current liability = Accruals + Notes Payable
= $176 + 996
= $1,172
4. Year 2 Retained earnings = Total Common Equity - Common Stock
= $14,063 - 9,141
= $4,922
5. This statement is False because:
A) Cute Camel's total current asset balance actually increased from $6,750 million to $8,437 million between Year 1 and Year 2
Current Assets are a pool of relatively liquid assets, which are available to support the company's current and future sales and they increased from Year 1 to 2.
Snapshot of balance sheet.
The balance sheet is a financial and accounting system the provides a summary of the financial conditions, that is balance of the individual and the organization. May be made for sole proprietorship or partnership.
The answer to the statement is cute carmel total C.A increased between 1 and 2 year.
The balance sheet gives us information regarding the company. Both th investors and the analyst of the cute Carmel woodcraft company use it for accessing their performance.The sheet is made for the first and the second year basis. Year 2 the Cash and Cash Equivalents = Current Assets - Accounts Receivable - Inventories. Hence equals $3,459Next the both years Net Plant & equipment = Total assets - Total current assets Thus is $10,313. Thus Total CL = Accruals + N.Payable = $1,172. A 2 Retained earnings = Total Common Equity - Common Stock = $4,922.Hence the option A is correct.
Learn more about the balance sheet.
brainly.com/question/16776658.
What does a descriptive study seek to accomplish?
When a price ceiling is in effect:_______
a. there is no competition for goods.
b. demanders compete for goods in short supply by accepting reductions in quality.
c. suppliers compete for customers by inefficiently raising quality levels.
d. suppliers have an incentive to provide really good customer service.
Answer:
i got answer c
(i took the test)
1. The Troller Corporation’s common stock has a beta of 1.15. If the risk-free rate is 3.5 percent and the expected return on the market is 11 percent, what is the company’s cost of equity capital?
Answer:
Cost of equity capital is 0.12125 or 12.125%
Explanation:
The cost of equity capital or the required rate of return is the minimum rate of return expected by the investors to invest in the stock of the company. The cost of equity capital can be calculated using the CAPM equation. The formula for CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
r is the cost of equity capital or required rate of returnrRF is the risk free raterM is the return on Marketr = 0.035 + 1.15 * (0.11 - 0.035)
r = 0.12125 or 12.125%
A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. What is the marginal cost of producing the computers that Pam can assemble during her 2nd hour of work
Answer:
$1,840
Explanation:
In order to calculate the Marginal cost of producing the computers in 2nd hour of work, we need to add the marginal cost of computer and marginal cost of wage in the 2nd hour of work.
MC = MC(computers) + MC(wage)
MC = $1,800(w) + $40
MC = $1,840
Working
MC (computers ) = 3 x 600$ = $1,800
hour computers assembled
1st 4
2nd 7
If pam works 2 hours she can assemble 7 computers but she already assembled 4 computers in 1st hour.
So the 2nd-hour computers will be 3 ( 7 - 4) computers.
You have an opportunity to invest in Australia at an interest rate of 8%. Moreover, you expect the Australian dollar (A$) to appreciate by 2%. Your effective return from this investment is
Answer:
10.16%
Explanation:
The computation of the effective return for this investment is shown below:
Let us assume that we invested an amount in Australian dollars 100
The return is 8%
After one year, the amount is 108
Now the converting amount is 110.16 (108 × 102%)
Now the effective rate for this investment is
= 110.16 - 100
= 10.16%
ABC Company has the following authorized stock: Common stock: 1.00 par value, 100,000 shares On 1/11/15, ABC Company issued 10,000 shares of common stock for $5 per share (cash). How much cash does the company receive
Answer:
Amount of cash received = $50,000
Explanation:
The authorized share capital is the total maximum amount of shares in units that a company can raised as contained in its memorandum of association.
The issued share capital is the proportion of the authorized share capital that a company has decided to offer to investors to raise capital.
The total amount of issued share capital raised would be equal to
Issued share capital = units issued × price per units
= 10,000 × $5 = $50,000
Amount of cash received = $50,000
Based on the information given the amount that the company received is $50,000.
Using this formula
Cash received=Shares of common stock× Per share
Where:
Shares of common stock=10,000 shares
Per share=$5 per share
Let plug in the formula
Cash received=10,000×$5
Cash received=$50,000
Inconclusion the amount that the company received is $50,000.
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Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 470 $ 2.37 Apr. 20 Purchase 410 2.72 Dunbar sold 580 units of inventory during the month. Ending inventory assuming FIFO would be:
Answer:
Ending inventory= $816
Explanation:
Giving the following information:
Apr. 1 Beginning inventory 470 $2.37
Apr. 20 Purchase 410 $2.72
Dunbar sold 580 units of inventory during the month.
To calculate the ending inventory under the FIFO (first-in, first-out) method, we need to use the cost of the last units incorporated into inventory.
Units in ending inventory= 880 - 580= 300
Ending inventory= 300*2.72= $816
All automobile makers around the world are in the same strategic group because they manufacture automobiles.
a) true
b) false
Answer:
The answer is False.
Explanation:
False, all automobile maker of the world does not form the same strategic group on the basis of manufacturing the automobiles because the strategic group refers to the process to follow the same strategy. Since all around the world different automobile maker work in different economies with a different set of strategies that varies according to the economic situations. For example, the strategy to work in a developed economy will be different from the developing economy. Therefore, all automobile makers will not follow the same strategy so it will not be in the same strategic group.
Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 20,000 portable grills, 50,000 stationary grills, and 5,000 smokers. Information on the three models is as follows:
Portable Stationary Smokers
Price $90 $200 $250
Variable cost per unit 45 130 140
Total fixed cost is $2,128,500.
Required:
1. What is the sales mix of portable grills to stationary grills to smokers?
2. Compute the break-even quantity of each product.
Answer:
1.
Sales mix
Portable grills = 20000/75000 = 4/15 or 26.67%
Stationary grills = 50000/75000 = 2/3 or 66.67%
Smokers = 5000/75000 = 1/15 or 6.67%
2.
Break even in units
Overall = 2128500 / 66 = 32250 units
Portable = 32250 * 4/15 = 8600
Stationary = 32250 * 2/3 = 21500
Smokers = 32250 * 1/15 = 2150
Explanation:
1.
The sales mix is the proportion of sales in units that each product holds in the in relation to the total overall sales in units of all products. The sales mix is calculated as follows,
Sales mix proportion of Product A = Sales in units Product A/Total number of sales in units of all products
The total number of sales in units of all products is,
Total sales in units = 20000 + 50000 + 5000 = 75000 units
Sales mix
Portable grills = 20000/75000 = 4/15 or 26.67%
Stationary grills = 50000/75000 = 2/3 or 66.67%
Smokers = 5000/75000 = 1/15 or 6.67%
2.
We will compute the overall break even point in units in then divide it according to the sales mix to calculate the break even in units of each product.
To calculate the overall break even in units, we need to determine the weighted average contribution per unit.
Weighted average contribution per unit = 4/15 * (90 - 45) + 2/3 * (200 - 130) + 1/15 * (250 - 140)
Weighted average contribution per unit = 66
Break even in units
Overall = 2128500 / 66 = 32250 units
Portable = 32250 * 4/15 = 8600
Stationary = 32250 * 2/3 = 21500
Smokers = 32250 * 1/15 = 2150
Alden Corp. has the following balances as of December 31, 2019:Total Assets $90,000Total Liabilities 60,000Total Equity 30,000Calculate the debt to equity ratio. A. 0.64.B. 0.92.C. 1.56.D. 256.
Answer:
2.00
Explanation:
Calculation of the debt to equity ratio
Using this formula
Debt to equity ratio= Total liabilities/Total Shareholders equity
Where,
Total liabilities=60,000
Total Shareholders equity =30,000
Let plug in the formula
Debt to equity ratio=60,000/30,000
Debt to equity ratio =2.00
Therefore debt to equity ratio will be 2.00
Ann transferred land worth $200,000 with a tax basis of $40,000 to Brown Corporation, an existing entity, for 100 shares of its stock. Brown Corporation has two other shareholders, Bill and Bob, each of whom holds 100 shares. With respect to the transfer:
Answer:
Ann has a bias of $200,000 in her 100 shares in Brown Corporation.
Explanation:
The full question is as follows;
Ann transferred land worth $200,000 with a tax basis of $40,000, to Brown corporation, an existing entity, for 100 shares of its stock. Brown corporation has two other shareholders, Bill and Bob, each of whom holds 100 shares. With respect to the transfer: a. Ann has no recognized gain. b. Brown Corporation has a basis of $160,000 in the land. c. Ann has a bias of $200,000 in her 100 shares in Brown Corporation. d. Ann has a basis of $40,000 in her 100 shares in Brown Corporation. e. none of the above.
Answer
Ann has a bias of $200,000 in her 100 shares in Brown Corporation.
Explanation
From the question, we can see that Ann traded 200,000 worth of asset for 100 shares.
What this means is that the basis of her shares will be 200,000
We can also see that a capital gain of 160,000 is recognized. The capital gain is recognized because the land which was traded has a basis of 40,000 for 200,000. This makes it taxable due to the capital gain.
Hence, the land will enter Brown Corporation as 200,000 and not 160,000
Which one of the following reports helps track past due bills and bills that are due shortly? Multiple Choice Accounts Payable Aging Summary Customer Aging Summary Accounts Receivable Aging Summary Vendor Aging Report
Answer:
Accounts Payable Aging Summary
Explanation:
The account payable aging summary refers to the summary of the past due bills and the bills which are due shortly. It shows the amount which we have to pay in the prescribed time limit i.e 30 days 45 days etc
Therefore the reports which is needed to track the past due bills and that are due shortly we called as the account payable aging summary
Hence, the first option is correct
Harvey quit his job at State University, where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The explicit costs of Harvey's firm in the first year were
Answer:
The explicit costs of Harvey's firm in the first year were $605,000
Explanation:
According to the given data we have the following:
In the first year, the firm sold 11,000 units of software
$55 goes for the costs of production, packaging, marketing, employee wages and benefits
Therefore, in order to calculate explicit costs of Harvey's firm in the first year we would have to make the following calculation:
explicit costs of Harvey's firm= units of software sold*costs of production, packaging, marketing, employee wages and benefits
explicit costs of Harvey's firm=11,000*$55
explicit costs of Harvey's firm=$605,000
The explicit costs of Harvey's firm in the first year were $605,000
Regarding income taxes, which do you think is more important (and why)-- the average tax rate that a firm pays for the marginal tax rate the firm is paying?
Answer:
average tax rate
Explanation:
Based on these two tax rates I would say that the more important of the two is average tax rate. This is because the average tax rate is the total taxes you have paid divided by your total income. This therefore will always be less than the marginal tax rate because the this tax rate is divided by tax brackets which since the average tax rate is specific it will never reach the limit of the tax bracket making it less than the marginal tax rate.
Pharoah Company sublet a portion of its warehouse for five years at an annual rental of $71700, beginning on May 1, 2017. The tenant, Sheri Charter, paid one year's rent in advance, which Pharoah recorded as a credit to Unearned Rent Revenue. Pharoah reports on a calendar-year basis. The adjustment on December 31, 2017 for Pharoah should be
Answer:
Adjusting entries
Dr Unearned rent revenue $47,800
Cr Rent revenue $47,800 to record accrued rent revenue.
Explanation:
Contract value for one year $71,700
One month of rent $71,700/12 = $5,975
We will need to get how many month that has passed from May to December i.e 8 months
Value of 8 month of rent = 8 × $5,975
= $47,800 i.e earned portion of the contract.
Balance unearned rent revenue at year end= $71,700 - $47,800
= $23,900
Which of the following statements regarding a firm’s optimal capital structure is true? The optimal capital structure maximizes the firm’s earnings per share (EPS). The optimal capital structure maximizes the firm’s cost of equity. The optimal capital structure maximizes the firm’s cost of debt. The optimal capital structure maximizes the firm’s stock price.
Answer: The optimal capital structure maximizes the firm’s stock price.
Explanation:
The Capital Structure of a company refers to the proportion of debt vs equity that it chooses to use to fund its Assets and operations.
The goal of management is to use the capital structure to fund the company in such a way that the market value of a company increases.
The Market value is reflected by the firm's stock price so the optimal capital structure is meant to maximize the firm’s stock price.
The sales budget for Perrier Inc. is forecasted as follows:
Month Sales Revenue
May $130,000
June 150,000
July 200,000
August 130,000
To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales: 60 percent in the month of sale. 20 percent in the month following sale. 15 percent in the second month following sale.
5 percent uncollectible.
60 percent in the month of sale.
20 percent in the month following sale.
15 percent in the second month following sale.
The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $22,000, of which $7,000 represents uncollected March sales and $15,000 represents uncollected April sales. Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.
Answer:
budgeted cash collections
May June July
sales revenue 130,000 150,000 200,000
cash sales (60% x 0.98) 76,440 88,200 117,600
accounts receivable (March) 5,250
accounts receivable (April) 7,500 5,625
accounts receivable (May) 26,000 19,500
accounts receivable (June) 30,000
total cash collections 219,190 269,825 367,100
I used net accounts receivables, that means I already discounted the 5% of collectibles.
Twist Corp. has a current accounts receivable balance of $457,615. Credit sales for the year just ended were $2,940,600.a. What is the company's receivables turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
Answer and Explanation:
The computations are as follows
a. For company receivable turnover
As we know it is
= Credit Sales ÷ current account receivable balance
= $2,940,600 ÷ $457,615
= 6.43 times
b.
Now
company's days' sales in receivables is
= 365 ÷ Receivables turnover ratio
= 365 ÷ 6.43
= 56.77 days
c. Therefore the average collection period is the same as days sales in receivable i.e 56.77 days
In the United States banking policies and procedures are set by the:
-president
-senate
-House of representatives
-federal reserve
Answer:
Federal Reserve.
Explanation:
Federal Reserve is a large central bank in Washington, D.C. that was founded in 1913. It lends money to other, smaller banks.
Carpenters, Inc., a manufacturing company, acquired equipment on January 1, 2017 for $ 520 comma 000. Estimated useful life of the equipment was seven years and the estimated residual value was $ 20 comma 000. On January 1, 2020, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straightminusline method of depreciation. Calculate depreciation expense for 2020. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
Annual depreciation= $47,618
Explanation:
Giving the following information:
Purchasing price= $520,000
Useful life= 7 years
Residual value= $20,000
New useful life= 9 years
First, we need to determine the annual depreciation and accumulated depreciation before January 2020.
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (520,000 - 20,000)/7= 71,429
Accumulate depreciation= 71,429*3= $214,287
New annual depreciation:
Book value= 520,000 - 214,287= 305,713
Annual depreciation= (305,713 - 20,000) / 6
Annual depreciation= $47,618