Answer:
B. False
Explanation:
The equal total payments pattern for installment notes is when the regular payments on an installment note are always for the same amount. However, the amounts of interest and principal change over the life of the note because at the begining, most of the payment amount goes toward the interest and as you make payments your principal starts to decrease making the amount that goes toward the interest to decrease and the money that goes towards the principal to increase. According to that, the statement is false.
Below is a list of activities for Jayhawk Corporation. Required: Select from the activities of Jayhawk Corporation whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders' equity. The first item is provided as an example.
Transaction Assets = Liabilities+ Stockholders' Equity
1. Issue common stock in exchange for cash. Increase= No effect+ Increase
2. Purchase business supplies on account. = +
3. Pay for legal services for the current month. = +
4. Provide services to customers on account. = +
5. Pay employee salaries for the current month. = +
6. Provide services to customers for cash. = +
7. Pay for advertising for the current month. = +
8. Repay loan from the bank. = +
9. Pay dividends to stockholders. = +
10. Receive cash from customers in (4) above. = +
11. Pay for supplies purchased in (2) above. = +
Answer:
Jayhawk Corporation
Transaction Assets = Liabilities Stockholders' Equity
1. Issue common stock in exchange for cash. Increase= No effect + Increase
2. Purchase business supplies on account. Increase = Increase + No effect
3. Pay for legal services for the current month. Decrease = No effect + Decrease
4. Provide services to customers on account. Increase = No effect + Increase
5. Pay employee salaries for the current month. Decrease = No effect + Decrease
6. Provide services to customers for cash. Increase = No effect + Increase
7. Pay for advertising for the current month. Decrease = No effect + Decrease
8. Repay loan from the bank. Decrease = Decrease + No effect
9. Pay dividends to stockholders. Decrease = No effect + Decrease
10. Receive cash from customers in (4) above. Increase + Decrease = No effect + No effect
11. Pay for supplies purchased in (2) above. Decrease = Decrease + No effect
Explanation:
The accounting equation states that Assets are equal to Liabilities Plus Equity. This equation remains true for every business transaction, which affects two accounts on either side of the equation. This keeps the equation in equilibrium or balance with each given transaction. It is from this equation that the double entry system of accounting was developed and is based.
The impact whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders' equity is explained below:
1. Issue common stock in exchange for cash. Increase= No effect + Increase
2. Purchase business supplies on account. Increase = Increase + No effect
3. Pay for legal services for the current month. Decrease = No effect + Decrease
4. Provide services to customers on account. Increase = No effect + Increase
5. Pay employee salaries for the current month. Decrease = No effect + Decrease
6. Provide services to customers for cash. Increase = No effect + Increase
7. Pay for advertising for the current month. Decrease = No effect + Decrease
8. Repay loan from the bank. Decrease = Decrease + No effect
9. Pay dividends to stockholders. Decrease = No effect + Decrease
10. Receive cash from customers in (4) above. Increase + Decrease = No effect + No effect
11. Pay for supplies purchased in (2) above. Decrease = Decrease + No effect
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Rodriguez Company pays $310,000 for real estate plus $16,430 in closing costs. The real estate consists of land appraised at $215,000; land improvements appraised at $86,000; and a building appraised at $129,000.Required:1. Allocate the total cost among the three purchased assets.2. Prepare the journal entry to record the purchase.
Answer:
Required 1.
Land = $163,215
Land improvements = $65,286
Buildings = $97,929
Required 2.
Land $163,215 (debit)
Land improvements $65,286 (credit)
Buildings $97,929 (credit)
Cash $310,000 (credit)
Explanation:
Allocation of the purchase cost must be made on the bases appraisal value.
Total Appraisal Value = $215,000 + $86,000 + $129,000
= $430,000
Land = $215,000 / $430,000 × $326,430
= $163,215
Land improvements = $86,000 / $430,000 × $326,430
= $65,286
Buildings = $129,000 / $430,000 × $326,430
= $97,929
Explain the provisions of section 302 of the Sarbanes-Oxley Act including obligations of officers; nature and scope of assertions; accounting requirements; and legal liability of officers.
Answer:
"Section 302 of the Sarbanes-Oxley Act states that the CEO and CFO are directly responsible for the accuracy, documentation and submission of all financial reports as well as the internal control structure to the SEC," according to sarbanes-oxley-101.com. So, Section 302 is essentially about the responsibilities of principal officers of the company, especially the principal executive and financial officers.
1. Obligations of officers: To certify each annual and quarterly report. To ensure that the issued financial statements and other financial information are not misleading. To ensure that the information is fairly presented.
2. Nature and Scope of Assertions:
a) That the information presented are fairly presented with no misleading statements
b) That the internal controls are in place and operating effectively
c) To asset that they are aware of all material information relating to the issuing company
d) That they have evaluated internal controls, their effectiveness, and changes in controls.
3. Accounting requirements:
a) Ensure effective internal accounting controls
b) Disclose all material financial information to auditors and audit committee
c) File periodic reports to SEC in compliance with section 13(a) and 15(d) of the SEC Act of 1934.
4. Legal liability of officers: This is covered in Section 906 of the Sarbanes-Oxley Act. The section prescribes that officers are liable for "penalties upward of $5 million in fines and 20 years in prison" for any violation of the Act.
Explanation:
The Sarbanes-Oxley Act of 2002 is a federal law which was made in response to the accounting scandals following the collapse of Worldcom and Enron. The purpose of the Act was to safeguard shareholders, employees, and the public from accounting errors and fraudulent financial practices by listed companies. According to sarbanes-oxley-101.com, the Act requires "all financial reports to include an Internal Controls Report," to prove the accuracy and adequacy of controls for ensuring that financial information is not misleading.
A stock has an expected return of 12.6 percent, the risk-free rate is 7 percent, and the market risk premium is 10 percent. What must the beta of this stock be
Answer:
0.56
Explanation:
In this question we used the Capital Asset Pricing Model formula i.e shown below:
As we know that
Expected rate of return = Risk free rate of return + Beta × market risk premium
12.6% = 7% + Beta × 10%
12.6% - 7% = Beta × 10%
5.6% = Beta × 10%
So, the beta is
= 5.6% ÷ 10%
= 0.56
Hence, the beta of the stock is 0.56
Dudley is a manager at the SuperCuts franchise. He has had to fire two employees because they were treating walk-in customers with disdain and thus turning away business. Once those employees were gone, he trained new employees on how to greet customers. Business has been improving and he has realized how important personnel are for a retail business. What role do the personnel play at his SuperCuts franchise?
Answer:
they are the interface between the brand and the customer
Explanation:
Based on the information provided within the question it can be said that the personnel in SuperCuts are the interface between the brand and the customer. The personnel are the ones that interact on a daily basis with the shoppers and provide all the information that they need regarding the SuperCut's brand in order to generate sales.
You are developing the project charter for a new project. Which of the following
is NOT part of the enterprise environmental factors?
✓
A) Lessons learned from previous projects
B) The work authorization system
C) Government and industry standards that affect your project
D) Knowledge of which departments in your company typically work on projects
Answer: A) Lessons learned from previous projects
Explanation:
Enterprise Environmental Factors (EEF) refers to all environmental factors that have a say in whether a project is successful or not. They include both internal factors such as company infrastructure, knowledge and capability (departments with the knowledge on project design and implementation) and internal project authorization systems as well as external factors such as Government standards and market conditions.
Lessons learned from previous projects, while important, are not included in this list and are not Enterprise Environmental Factors.
Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A has an IRR of 11%, while Project B's IRR is 14%. When the WACC is 8%, the projects have the same NPV. Given this information, which of the following statements is CORRECT?a. If the WACC is 9%, Project A's NPV will be higher than Project B's. b. If the WACC is greater than 14%, Project A's IRR will exceed Project B's. c. If the WACC is 13%, Project A's NPV will be higher than Project B's. d. If the WACC is 9%, Project B's NPV will be higher than Project A's. e. If the WACC is 6%, Project B's NPV will be higher than Project A's.
Answer:
d. If the WACC is 9%, Project B's NPV will be higher than Project A's.
Explanation:
The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment
While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage
Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR
Therefore option d is correct
The difference between actual hours times the actual pay rate and actual hours times the standard pay rate is the labor _________________ variance.
Answer:
"Labor price variance " is the correct choice.
Explanation:
The variation throughout the labor rate represents the distance between real as well as anticipated labor costs. These were measured by taking the difference, based upon the number of additional hourly wages, between some of the real labor amount charged as well as the minimum amount.Absolute variation in the labor rate is equivalent to absolute variation in the price of the commodity.6. ABC Company announced today that it will begin paying annual dividends next year. The first dividend will be $0.10 a share. The following dividends will be $0.20, $0.30, $0.40, and $0.50 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 2.0 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.0 percent
Answer:
The amount willing to pay to buy one share is $6.92.
Explanation:
The announcement by company to pay annual dividend = $0.10
2nd year divident amount = $0.20
3rd year divident amount = $0.30
4th year divident amount = $0.40
5th-year divident amount = $0.50
The increase in dividend = 2 percent.
The desired rate of return = 8%
Value after year 5 = (D5 × Growth rate) / (Required rate-Growth rate)
=(0.5 × 1.02) / (0.08-0.02)
=8.5
Therefore, the current value = Future dividend and value × Present value of discounting factor(rate%,time period)
=0.1/1.08 + 0.2/1.08^2 + 0.3/1.08^3 + 0.4/1.08^4 + 0.5/1.08^5 + 8.5/1.08^5
=$6.92.
7. A fast-food chain plans to expand by opening several new restaurants. The chain operates two types of
restaurants, drive-through and full-service. A drive-through restaurant costs RM 100.000 to construct,
requires 5 employees, and has an expected annual revenue of RM 200.000. A full service restaurant
costs RM 150.000 to construct, requires 15 employees, and has an expected annual revenue of RM
500,000. The chain has RM 2,400,000 in capital available for expansion. Labor contracts require that
they hire no more than 210 employees, and licensing restrictions require that they open no more than
20 new restaurants.
(a) How many restaurants of each type should the chain open in order to maximize the expected
revenue? [1 point)
≤
Explanation:
Drive through Full Service
Annual revenue 200,000 500,000
Cost 100,000 150,000
Income 100,000 350,000
Employee 5 15
Income / employee 20,000 23,333.33
Using simultaneous equation ,
Let X represent the drive through service ,and Y represent the full service restaurant
Budget = 100,000x + 150,000y ≤ 2,400,000 (equation 1)
Employer = 5x + 15y ≤ 210 (equation 2)
(Divide equation 1 by 10 ,000)
10x+ 15y ≤ 240 (equation 3)
Using elimination method, multiply equation 2 by -2
10x +15y ≤240
-10x - 30y ≤-420
-15y ≤ -180
y≤ -180/-15
y = 12
substitute y = 12 in equation 3
10x + 15y≤240
10x +180 ≤240
10x≤240-180
10x≤60
x≤6
12 1,800,000 180
6 600,000 30
6 drive through services and 12 full services should be opened.
6 Drive through 12 full service 20
Cost 600,000 1,800,000 2,400,000
Employees 30 180
Net income 600,000 4,200,000
Consider the following hypothetical data for an open economy (in millions):
Assets owned inside the U.S. by U.S. citizens = $140, 000140,000
Assets owned outside the U.S. by U.S. citizens = $23,35723,357
Assets owned outside the U.S. by foreign citizens = $110,000110,000
Assets owned inside the U.S. by foreign citizens = $22,78622,786
The value of the International Investment Position (IIP) of the U.S. is__________ $ nothing million.
Answer: $571 million
Explanation:
International Investment Position (IIP) is an Economic measure that is calculated to see the assets owned by the citizens of a country outside the country versus the assets owned by foreigners in the country in question. It is informally referred to as a nation's Balance Sheet with other countries.
It is calculated by;
Value of the International Investment Position of the US = Assets owned outside the US by the US citizens - Assets owned inside the US for the foreign citizens
= 23,357 - 22,786
= $571 million
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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Suppose you invested $100 in the Ishares High Yield Fund (HYG) a month ago. It paid a dividend of $2 today and then you sold it for $101. What was your dividend yield and capital gains on the investment
Answer:
Dividend yield= 2%
Capital gain = 1$
Explanation:
Capital gain is the difference between the cost of the shares when it was purchased and the price now
Capital gains = Price of the share now - cost of the shares
Capital gain = 101- 100 = 1
Capital gain = 1$
Dividend yield is the dividend earned as a proportion of the price of the share
Dividend yield = Dividend/ price × 100 =
Dividend = 2, Price = 101
Dividend yield = 2/101× 100 = 1.98
Dividend yield= 2%
Consumers have become more selective and better informed about their purchases. This macro-environmental force strongly impacts this industry.
a. True
b. False
Answer:
a. True
Explanation:
The macro-enviromental forces that impact an industry are: demographic, economic, political, ecological, socio-cultural, and technological.
In this case, we can see the socio-cultural macro-enviromental force at play, and perhaps also the demographic macro-enviromental force.
If consumers have become more selective and better informed about their purchases, it is most likely because they have change their culture or social status. Such a change in consumer behaviour can have great impact on an industry: it can boost some goods, while make other decline or disappear.
Such a change can also respond to demographic shift: for example, as consumers age, they tend to become more selective, so a good that used to be favored by a young population, might not be so anymore when that young population grows older.
A company purchased a commercial dishwasher by paying cash of $5,300. The dishwasher's fair value on the date of the purchase was $5,700. The company incurred $320 in transportation costs, $210 installation fees, and paid a $230 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher
Answer:
$5,830
Explanation:
Relevant data provided
Cash paid = $5,300
Transportation cost = $320
Installation fees = $210
The computation of the amount that will record the dishwasher is shown below:-
Total cost = Cash paid + Transportation cost + Installation fees
= $5,300 + $320 + $210
= $5,830
Therefore for computing the total cost we simply applied the above formula and ignore all other values as they are not relevant.
A paint manufacturing company produces three paint bases of differing quality. Due to throughput limitations (measured in gallons) at their facility, they are unable to meet total demand for their products. In determining which of their products they should produce, what should they consider?
a. The gross profit per unit for each product
b. The operating margin per unit for each product
c. The contribution margin per gallon of throughput for each product
d. None of the above
Answer:
c. The contribution margin per gallon of throughput for each product
Explanation:
contribution margin per gallon = Revenue per gallon - variable cost per gallon.
Contribution margin would enable the company to know the amount each product earns in excess after variable cost has been subtracted from revenue.
the product with the highest contribution margin should be considered.
Garcia Company has 10,400 units of its product that were produced last year at a total cost of $156,000. The units were damaged in a rainstorm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $3 each or it can repair the units at a total cost of $18,400 and then sell them for $7 each. Calculate the incremental net income if the units are repaired
Answer:
$23,200
Explanation:
Alternative 1 Alternative 2 Incremental
no repairs repair units revenue
sales revenue $31,200 $0 ($31,200)
repair costs $0 -$18,400 ($18,400)
revenue from $0 $72,800 $72,800
selling repaired units
total $23,200
Incremental revenues refer to the extra or additional revenues generated by a business activity or transaction. In this case, repairing and then selling the damaged units would increase income by $23,200.
In the classical model of decision making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the _______ decision. intuitive creative heuristic subjective optimum
Answer:
Optimum
Explanation:
The Classical approach to decision making is specific on making decisions to achieve required outcome. Under this approach, decisions are rationl and geared towards one stable and sustainable goal. The most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is the Optimum. The decision maker always makes decisions based on what is the best interests of that organization.
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00
3 Net income 600,000.00 550,000.00
4 Total $4,304,000.00 $3,814,000.00
5 Dividends:
6 On preferred stock $10,000.00 $10,000.00
7 On common stock 100,000.00 100,000.00
8 Total dividends $110,000.00 $110,000.00
9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Sales $10,850,000.00 $10,000,000.00
3 Cost of goods sold 6,000,000.00 5,450,000.00
4 Gross profit $4,850,000.00 $4,550,000.00
5 Selling expenses $2,170,000.00 $2,000,000.00
6 Administrative expenses 1,627,500.00 1,500,000.00
7 Total operating expenses $3,797,500.00 $3,500,000.00
8 Income from operations $1,052,500.00 $1,050,000.00
9 Other revenue 99,500.00 20,000.00
10 $1,152,000.00 $1,070,000.00
11 Other expense (interest) 132,000.00 120,000.00
12 Income before income tax $1,020,000.00 $950,000.00
13 Income tax expense 420,000.00 400,000.00
14 Net income $600,000.00 $550,000.00
Marshall Inc.
Comparative Balance Sheet December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Assets
3 Current assets:
4 Cash $1,050,000.00 $950,000.00
5 Marketable securities 301,000.00 420,000.00
6 Accounts receivable (net) 585,000.00 500,000.00
7 Inventories 420,000.00 380,000.00
8 Prepaid expenses 108,000.00 20,000.00
9 Total current assets $2,464,000.00 $2,270,000.00
10 Long-term investments 800,000.00 800,000.00
11 Property, plant, and equipment (net) 5,760,000.00 5,184,000.00
12 Total assets $9,024,000.00 $8,254,000.00
13 Liabilities
14 Current liabilities $880,000.00 $800,000.00
15 Long-term liabilities:
16 Mortgage note payable, 6% $200,000.00 $0.00
17 Bonds payable, 4% 3,000,000.00 3,000,000.00
18 Total long-term liabilities $3,200,000.00 $3,000,000.00
19 Total liabilities $4,080,000.00 $3,800,000.00
20 Stockholders' Equity
21 Preferred 4% stock, $5 par $250,000.00 $250,000.00
22 Common stock, $5 par 500,000.00 500,000.00
23 Retained earnings 4,194,000.00 3,704,000.00
24 Total stockholders' equity $4,944,000.00 $4,454,000.00
25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00
Determine the following measures for 20Y2 round to one decimal place, including percentages, except for pre-share amounts):
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders' equity
14. Return on common stockholders' equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield
Answer:
Marshall Inc.
Ratios:
1. Working Capital = Current assets - Current liabilities
= $2,464,000 - 880,000 = $1,584,000
2. Current ratio = Current Assets/Current Liabilities
= $2,464,000/880,000 = 2.8 : 1
3. Quick ratio = (Current Assets - Inventory)/Current Liabilities
= ($2,464,000 - 420,000)/880,000
= $2,044,000/880,000 = 2.3 : 1
4. Accounts receivable turnover = Average Accounts Receivable / Net Sales
= $542,500/10,850,000 = 0.05 times
Average receivables = ($585,000 + 500,000)/2 = $542,500
5. Number of days' sales in receivables = Days in the year/Accounts receivable turnover
= 365/0.05 = 7,300 days
6. Inventory turnover = Cost of goods sold / Average Inventory
= $6,000,000/400,000 = 15 times
Average Inventory = (Beginning inventory + Ending inventory) / 2
= ($420,000 + 380,000)/2 = $400,000
7. Number of days' sales in inventory = Number of days in a year divided by Inventory turnover ratio = 365 /15 = 24.3 days
8. Ratio of fixed assets to long-term liabilities = Fixed Assets/Long-term Liabilities = $5,760,000/3,200,000 = 1.8 : 1
9. Ratio of liabilities to stockholders' equity = Total Liabilities/Stockholders' equity = $4,080,000 / $4,944,000 = 0.83 or 80%
10. Times interest earned = Earnings before Interest and Taxes / Interest Expense = $1,152,000/132,000 = 8.7 times
11. Asset turnover = Sales Revenue / Average Total Assets
= $6,000,000/$8,639,000 = 0.7 or 70%
Average Total Assets = Beginning total assets + Ending total assets, all divided by 2
= ($9,024,000 + 8,254,000)/2 = $8,639,000
12. Return on total assets = EBIT/Average Total Assets
= $1,152,000/$8,639,000 = 13%
13. Return on stockholders' equity = Earnings after tax/Shareholders' equity = $600,000/$4,944,000 x 100 = 12%
14. Return on common stockholders' equity = EAT/Common Shareholders' Equity = $600,000 - 10,000/($4,944,000 - 250,000) x 100
= 12.6%
15. Earnings per share (EPS) on common stock = Net Income divided by the number of outstanding common shares = $600,000/100,000 = $6 per share.
16. Price-earnings ratio = Market price of shares/EPS = $82.80/$6 = 13.8
17. Dividends per share of common stock = Dividends/Common Stock shares = $100,000/100,000 shares = $1
18. Dividend yield = Dividend per share / Market price per share = $1/$82.80 = 1.2%
Explanation:
1. Working Capital is the difference between current assets and current liabilities.
2. Current ratio is a liquidity ratio of current assets over current liabilities.
3. Quick ratio is the current ratio modified with the subtraction of inventory.
4. Accounts receivable turnover is an accounting measure that shows how quickly customers pay for the credit sales.
5. Number of days' sales in receivables measures the number of days it takes a company to collect its credit sales. It is a function of the number of days in a year divided by the accounts receivable turnover ratio.
6. Inventory turnover is a ratio showing how many times a company has sold and replaced its inventory during a given period.
7. Number of days' sales in inventory is the result of dividing the days in the period by the inventory turnover formula. It shows the number of days inventory is held before being sold.
8. Ratio of fixed assets to long-term liabilities shows how much of long-term liabilities is represented in fixed assets.
9. Ratio of liabilities to stockholders' equity is a financial leverage ratio that shows the relationship between liabilities and stockholders' equity.
10. Times interest earned (TIE) ratio measures the ability of a company to settle its debt obligations based on its current income. To calculate the TIE number, take the Earnings before interest and taxes (EBIT) and divide by the total interest expense.
11. Asset turnover is a ratio of sales over average assets, which shows company's efficiency in using assets to generate sales.
12. Return on total assets measures the percentage of earnings before interest and taxes over the average total assets. It can be obtained by multiplying profit margin with total asset turnover.
13. Return on stockholders' equity is a financial ratio that is calculated by dividing a company's earnings after taxes (EAT) by the total shareholders' equity, and then multiplying the result by 100.
14. Return on common stockholders' equity measures the ratio of earnings after taxes less Preferred Stock Dividend over the common shareholders' equity.
15. Earnings per share on common stock is the ratio of earnings divided by the number of outstanding common stock shares. It measures the earnings per share that the company has generated for the common stockholders.
16. Price-earnings ratio is a ratio of the market price of shares over the earnings per share. It is used to determine if a company's share is overvalued or undervalued.
17. Dividends per share of common stock is the dividend paid divided by the number of outstanding common stock.
18. Dividend yield is the ratio of the dividend per share over the market price per share.
Tropetech Inc. has an expected net operating profit after taxes, EBIT(1 – T), of $2,400 million in the coming year. In addition, the firm is expected to have net capital expenditures of $360 million, and net operating working capital (NOWC) is expected to increase by $45 million. How much free cash flow (FCF) is Tropetech Inc. expected to generate over the next year?
Answer:
FCF = $1,995 million
Explanation:
DATA
EBIT(1-T) = $2,400 million
Net Capital Expenditure = $360 million
Net operating working capital (NOWC) = $45 million
Free cash flow (FCF) expected to generate over next year can be calculated as
FCF = EBIT(1-T) - Capital Expenditure - Net operating working capital (NOWC)
FCF = $2,400 million - $360 million - $45million
FCF = $1,995 million
On December 31, 2018, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. Wintergreen received $139,875 when it issued the bonds (or $150,000 × .9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2019.Complete the necessary journal entry for June 30, 2019 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer: Please see explanation column
Explanation:
Journal entry for June 30
Date Amount Debit Credit
June 30 Bond Interest expense $5,756
Discount on Bonds Payable $506
Cash $5,250
Calculation:
Cash = 150,000 x 7%x 6/12 = $5,250
10-year bonds pay interest semiannually indicates 20 interest periods
Straight line Amortization of the discount =$10,125/20 = $506
Bond interest expense= Interest + amortization on discount
Interest = $150,000 x 7% x 6/12 = $5,250 + 506= $5,756.
Can you explain answer below:
#28 The Canadian subsidiary of a U.S. company reported cost of goods sold of 50,000 C$, for the current year ended December 31. The beginning inventory was 15,000 C$, and the ending inventory was 10,000 C$. Spot rates for various dates are as follows:
Date beginning inventory was acquired $1.08 = 1C$
Rate at beginning of the year $1.10 = 1C$
Weighted average rate for the year $1.12 = 1C$
Date ending inventory was acquired $1.13 = 1C$
Assuming the Canadian dollar is the functional currency of the Canadian subsidiary, the translated amount of cost of goods sold that should appear in the consolidated income statement is
Answer is C. $56,000
Answer:
$56,000
Explanation:
Data:
Cost of good sold (single) = $50,000
Weighted average rate of the year = $1.12
Cost of good sold consolidated = ???????
Solution:
In order to find the translated amount of cost of goods sold that should appear in the consolidated income statement, we will multiply the cost of goods sold given for Canadian subsidiary with the weighted average rate of the year.
Calculation:
Cost of good sold (consolidated) = $50,000 x $1.12
Cost of good sold (consolidated) = $56,000
If 200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were actually used at an actual rate of $6/machine‐hour, what is the variable overhead efficiency variance?
Answer:
Variable overhead efficiency variance= $100,000 unfavorable
Explanation:
Giving the following information:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were used.
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Variable overhead efficiency variance= (200,000 - 220,000)*5
Variable overhead efficiency variance= $100,000 unfavorable
When the Variable overhead efficiency variance is = $100,000 unfavorable
What is the Efficiency variance?
Giving the following information are:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but [tex]220,000[/tex] machine‐hours were used. Now we calculate the variable overhead efficiency variance, Then we need to use the following formula are below mention. The variable overhead efficiency variance is= (Standard Quantity - Actual Quantity)*Standard rate. Then Variable overhead efficiency variance= [tex](200,000 - 220,000)*5[/tex]
Thus, Variable overhead efficiency variance= $100,000 unfavorable
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Consider the case of cell phone service. In England, there are 20 providers of cell phone service. On the other hand, in Cambodia, cell phone service is largely regulated by the government with only one firm as the sole provider of this service. Under these circumstances, it is expected that Choose one: A. England will have higher growth potential than Cambodia. B. England and Cambodia will have similar growth potential. C. England will have lower growth potential than Cambodia.
A corporation produces a single product and has the following cost structure
Number of units produced each year 7000
Variable costs per unit
Direct materials 51
Direct labor 12
Variable manufacturing overhead 2
Variable selling and administrative expense 5
Fixed costs per year
Fixed manufacturing overhead.. 441000
Fixed selling expense 112000
The absorption costing unit product cost is:______.
A) $149 per unit
B) $65 per unit
C) $63 per unit
D) $128 per unit
Answer:
D) $128 per unit
Explanation:
The computation of the unit product cost using the absorption costing is shown below:
= Direct materials per unit + direct labor per unit + Variable manufacturing overhead per unit + fixed manufacturing overhead per unit
= $51 + $12 + $2 + ($441,000 ÷ 7,000 units)
= $128
We simply added the direct material, direct labor, variable manufacturing overhead per unit, and the fixed manufacturing overhead per unit
Boatler Used Cadillac Co. requires $890,000 in financing over the next two years. The firm can borrow the funds for two years at 11 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.25 percent interest in the first year and 12.55 percent interest in the second year. Assume interest is paid in full at the end of each year.
A. Determine the lot al two-year interest cost under each plan.
Interest Cost
Long term fixed-rate plan
Short term variable-rate
B. Which plan is less costly?
1. Long term fixed-rate plan
2. Short-term variable-rate plan
Answer:
A. Total two-year interest cost under long term fixed-rate plan is $195,800; while total two-year interest cost under short term variable-rate is $176,220.
B. Short-term variable-rate plan is less costly.
Explanation:
A. Determine the total two-year interest cost under each plan.
This can be determined for each of the plan as follows:
For Long term fixed-rate plan
Total two-year interest cost under long term fixed-rate plan = Amount required * Interest rate per year * Number of years = $890,000 * 11% * 2 = $195,800
For Short term variable-rate
First year interest cost under short term variable-rate = Amount required * First year interest rate = $890,000 * 7.25% = $64,525
Second year interest cost under short term variable-rate = Amount required * Second year interest rate = $890,000 * 12.55% = $111,695
Total two-year interest cost under short term variable-rate = First year interest cost + Second year interest cost = $64,525 + $111,695 = $176,220
Therefore, we have:
Interest Cost
Long term fixed-rate plan $195,800
Short term variable-rate $176,220
B. Which plan is less costly?
Since the total two-year interest cost under short term variable-rate of $176,220 is less than $195,8000 total two-year interest cost under long term fixed-rate plan, the Short-term variable-rate plan is therefore less costly.
Which of the following represented a business unit that shows rapid growth but poor profit margins?
a. Star.
b. Cash cow.
c. Problem child.
d. Loss leader.
e. Dog.
Answer:
Option B
Explanation:
In simple words, A cash cow refers to one of the 4 dimensions (quadrants) throughout the growth-share vector, BCG matrix describing a business, line of products, or enterprise with significant market share inside a mature field.
A cash cow is described as a reference to a company, commodity, or asset that will generate continuous investment returns throughout its lifetime until it is purchased and paying off.
The term refers to a company that is equally low-maintenance too. Modern days cash cows need minimal capital investment to have consistently sufficient cash flow that can be distributed within a company to other departments. They 're lower - risk projects, potentially high profits.
In order to find the future worth, F, from a present amount, P, 5 years from now at an interest rate of 6 % per year, compounded quarterly, what interest rate must be used in the F/P factor, (F/P,i%,n), when n is 20 quarters
Answer:
Interest rate = 1.5%
Explanation:
Given:
Future value = F
Present value = P
Number of Year (n) = 5 year × 4 quarters = 20
Interest rate = 6 % per year = 6 / 4 = 1.5% = 0.015
Computation:
Future value = Present value[tex](1+i)^n[/tex]
F/P = (1+0.015)²⁰
F/P = 1.34685501
When n = 20 quarters
F/P = (1+i)²⁰
1.34685501 = (1+i)²⁰
i = 0.015
Interest rate = 1.5%
g Ryngard Corp's sales last year were $24,000, and its total assets were $16,000. What was its total assets turnover ratio (TATO).
Answer:
1.50
Explanation:
TATO = (net sales)/(total assets)
= (24000/16000) = 1.50
The total asset turnover ratio (TATO) for Ryngard Corp was 1.50 last year.
For each situation, list the assumption, principle, or constraint that has been violated, if any.
A) East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain.
B) Hilo Company is in its fifth year of operation and has yet to issue financial statements.
C) Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000.
D) Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely debited the "Computers" account.
E) Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000.
F) Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds debited the "Computers" account.
A. Going concern assumption
B. Periodically Assumption
C. Historial Cost Principle
D. Revenue Recognition Principle
E. Economic Entity Assumption
F. No Violation
Ansewer:
E i think
Explanation:
The following situations are correctly matched with the assumption, principle:
Revenue Recognition Principle: Before the sale but at the conclusion of the production cycle, East Lake Company records revenue. It is uncertain what the product will cost and how much can be sold.Periodically Assumption: Despite being in its fifth year of operation, Hilo Company has not yet released financial results.No Violation: Gomez, Inc. is holding goods at its $100,000 original cost. The fair value of the inventory is $110,000.Going concern assumption: On its balance statement, Bly Hospital Supply Corporation only lists current assets and current liabilities. Current assets and current liabilities are the amounts that are stated for equipment and bonds payable, respectively. It's doubtful that the "Computers" account would be debited during firm liquidation.Historial Cost Principle: Bly Hospital Supply Corporation only lists current assets and current liabilities on its balance sheet. The quantities for equipment and bonds payable are indicated as current assets and current liabilities, respectively. The "Computers" account would probably not be debited during corporate dissolution.Economic Entity Assumption: Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited from the "Computers" account.What is the Going concern assumption?According to the going concern principle, any organization's operations will continue for the foreseeable future. According to the guiding principle, every choice made by a company should be made with its continued operation in mind rather than its eventual closure.
Thus, the mention above correctly matched the assumption, and principle.
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