Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of $967,000. Without new projects, both firms will continue to generate earnings of $967,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of 13%.
A. What is the current PE ratio for each company?
B. Pacific Energy Company has a new project that will generate additional earnings of $117,000 each year in perpetuity. Calculate the new PE ratio of the company.
C. Atlantic Energy has a new project that will increase earnings by $217,000 in perpetuity. Calculate the new PE ratio of the firm.

Answers

Answer 1

Answer and Explanation:

The computation is shown below:

a. Current PE ratio is

For Pacific energy company

= Price ÷ Earnings

= ($967,000 ÷ 0.13) ÷ ($967,000)

= 7.69 times

For U.S Bluechips

= Price ÷ Earnings

= ($967,000 ÷ 0.13) ÷ ($967,000)

= 7.69 times

b. The new PE ratio is

= Price ÷ Earnings

= (($967,000 + $117,000) ÷ 0.13) ÷ ($967,000)

= 8.62 times

c. The new PE ratio is

= Price ÷ Earnings

= (($967,000 + $217,000) ÷ 0.13) ÷ ($967,000)

= 9.42 times


Related Questions

In its income statement for the year ended December 31, 2017, Darren Company reported the
following condensed data.
Salaries and wages expense $465,000 Loss on disposal of plant assets $83,500
Cost of goods sold 987,000 Sales revenue 2,210,000
Interest expense 71,000 Income tax expense 25,000
Interest revenue 65,000 Sales discounts 160,000
Depreciation expense 310,000 Utilities expense 110,000
Instructions
(a) Prepare a multi-step income statement.
(b) Calculate the profit margin and gross profit rate.
(c ) In 2016, Darren had a profit margin of 5%. Is the decline in 2017 a cause for concern?
(Ignore income tax effects.)
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a) DARREN COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales
Sales revenue $2,210,000
Less: Sales discounts $160,000
Net Sales $2,050,000
Cost of goods sold $987,000
Gross profit $1,063,000
Operating expenses
Salaries and wages expense $465,000
Depreciation expense $310,000
Utilities expense $110,000
Total operating expenses $885,000
Income from operations $178,000
Other revenues and gains
Interest revenue $65,000
Other expenses and losses
Loss on disposal of plant assets 83,500
Interest expense 71,000 154,500
Income before income taxes 88,500
Income tax expense 25,000 28%
Net income $63,500
(b) Profit margin
Net income $63,500
Net Sales 2,050,000
3.10%
Gross profit rate
Gross profit $1,063,000
Net sales $2,050,000
51.9%
After you have completed E5-8 , consider the following additional question.
1. Assume that cost of goods changed to $1,015,000 and that the income tax rate is 28%.
What impact does this change have on the multi-step income statement and the
profitability ratios?

Answers

Answer:

Part a

Darren Company

Multi-step income statement

Sales

Sales revenue                                                                $2,210,000

Less: Sales discounts                                                     ($160,000)

Net Sales                                                                       $2,050,000

Cost of goods sold                                                         ($987,000)

Gross profit                                                                     $1,063,000

Operating expenses

Salaries and wages expense                 $465,000

Depreciation expense                             $310,000

Utilities expense                                       $110,000

Total operating expenses                                            ($885,000)

Income from operations                                                 $178,000

Other revenues and gains

Interest revenue                                     ($65,000)

Other expenses and losses

Loss on disposal of plant assets            $83,500

Interest expense                                      $71,000         ($89,500)

Income before income taxes                                          $88,500

Income tax expense 25,000 28%                                 ($25,000)

Net income                                                                       $63,500

Part b

Darren Company

Profit margin = 3.10 % and gross profit rate = 51.85 %

Part c

Change in profit margin : The Profit Margin has fallen from 5% to 3.10 % in 2017 by 2.10% . The cause of this decline is a concern and must be investigated. The Profit margin rate measure the success with respect of earnings on sales thus more investigations must be done on what caused the earnings to decline in 2017.

Part 1

Cost of Goods Sold has increased by $28,000 ($1,015,000 -$987,000). Income tax rate has not changed.

a. Impact of the change on multi-step income statement

The items of Gross Profit and Income from Operations will decline by $28,000.

b. Impact of the change on profitability ratios

The Profit ratios will decline. Profit margin will be 1.73 %. Gross Profit margin will be 50.49 %

Explanation:

Multiple Step Income Statement shows separately the Operating Income and the Net Income. Operating Income being Income derived from Primary Activities of the Company whilst the Net Income includes the Secondary Activities of the Company such as Income taxes or Sale of assets.

Other Workings :

Profit margin = Net Income / Net Sales x 100

                     =  $63,500 / $2,050,000 x 100

                     =  3.10 %

Gross Profit rate = Gross Profit / Net Sales x 100

                           = $1,063,000 / $2,050,000 x 100

                           =51.85 %

The Total Revenue and Net Earnings are shown individually on the Several Stage Financial Statements. Operating income comes from the company's main activities, whereas net earnings come from the industry's support functions, such as taxable income and divestments.

The income statement has been attached below.

Part. B.

Darren Company

Profit margin = 3.10 % and gross profit rate = 51.85 %

Part. C.

Profitability has dropped by 2.10 percent from 5 percent to 3.10 percent in the year 2017. The basis for this drop is a point of anxiety that needs to be questioned.

Because the gross margin rate evaluates achievement in terms of income on selling, more analysis into what prompted the profitability to drop in 2017 is required.  

Part 1

Cost of Goods Sold has boost up by $28,000 ($1,015,000 -$987,000).

The income tax rate has not changed.

a. Impact of the change on the multi-step income statement

The items of Gross Profit and Income from Operations will reduce by $28,000.

b. Impact of the change on profitability ratios

The Profit ratios will decline.

The profit margin will be 1.73 %.

The Gross Profit margin will be 50.49 %

Working Notes:

Profit margin = [tex]\frac{ \text{Net Income}}{ \text{Net Sales}} \times 100[/tex]  

                    =  [tex]\frac{ \$63,500}{ \$2,050,000}\times 100[/tex]  

                    =  3.10 %

Gross Profit rate = [tex]\frac{\text{Gross Profit}}{\text{Net Sales}} \times 100[/tex]  

                          = [tex]\frac{ \$1,063,000 }{ \$2,050,000}\times 100[/tex]  

                          =51.85 %

To know more about the calculation of the income statement and the profits, refer to the link below:

https://brainly.com/question/16501306

Stoneside Inc. has provided you with the following information for its Manufacturing Overhead account at the end of the period. Actual manufacturing overhead costs incurred total $31,910. The company applied manufacturing overhead cost in the amount of $28,900. What is the overapplied or underapplied manufacturing overhead

Answers

Answer:

Under applied overhead of $3,010

Explanation:

Actual manufacturing overhead

$31,910

Less:

Applied manufacturing overhead

($28,900)

Under applied overhead

$3,010

The difference between actual overhead incurred and the overhead applied is under applied or over applied manufacturing overhead.

With regards to the above, it is under applied manufacturing overhead because applied overhead is less than actual overhead.

Wings Co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours, and had the following manufacturing overhead:
Overhead Cost Pool - Budgeted O/H $ - Budgeted Level for Cost Driver - O/H Cost Driver
Materials Handling $160,000 3,200 lbs. Material Weight
Machine Setup 13,200 390 S/U�s # of S/Us
Machine Repair 1,380 30,000 Mach. Hrs Machine Hrs.
Inspections 10,560 160 Inspections # of Inspections
Requirements for Job #971 which included 4 Units of Production:
D/L Hours = 20 Hours
D/Mat�ls = 130 lbs.
Machine S/U = 30 Set-ups
Machine Hrs. = 15,000 Machine Hours
Inspections = 15 Inspections.
Using ABC, the materials handling overhead cost assigned to Job #971 is:______.
a. $2,300.
b. $990.
c. $6,500.
d. $690.
e. $1,020.

Answers

Answer:

c. $6,500.

Explanation:

The computation of the material cost assigned to Job 971 is as follows:

= Budgeted Overhead × Material Weight for Job 971 ÷ Total Weight

= $160,000 × 130 ÷ 3200

=$6,500

Hence, the  material cost assigned to Job 971 is $6,500

Therefore the correct option is c.

Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Set up a schedule of interest expense and discount amortization under the straight-line method

Answers

Answer:

Devon Harris Company

Schedule of Interest Expense and Discount Amortization under the straight-line method:

Time    Cash Interest      Interest Expense  Amortization  Carrying Amount

0             N/A                         N/A                     N/A               $1,855,816

1           $200,000                $228,836.80     $28,836.80   $1,884,652.60

2          $200,000                $228,836.80     $28,836.80   $1,913,489.40

3          $200,000                $228,836.80     $28,836.80   $1,942,326.20

4          $200,000                $228,836.80     $28,836.80   $1,971,163.00

5          $200,000                $228,836.80     $28,837.00   $2,000,000

Explanation:

a) Data and Calculations:

10% Bonds' maturity value = $2,000,000

Bonds sales value = $1,855,816

Total discount = $144,184

Annual Interest = $200,000 ($2,000,000 * 10%)

Maturity period = 5 years (January 1, 2020 to January 1, 2025)

Annual amortization of discount = $28,836.80 ($144,184/5)

Total interest cost with amortized discount each year = $228,836.80

b) Under the straight line method, the premium or discount on the bond is amortized in equal amounts over the life of the bond, as demonstrated above.

Based on the information given, it should be noted that the Cash Interest, Discount amortized and Interest Expenses will be  $20,000, $28836.80, and $228836.80 respectively.

Interest expense

From the information given, the following can be calculated:

Discount on issue = $2000000 - $1855816 = $144184

Discount to be amortized on each interest date = $144184 / 5 = $28836.80

Cash interest annual = $2000000 * 10% = $200000

Therefore, the Cash Interest, Discount amortized and Interest Expenses from 2020 to 2025 will be  $20,000, $28836.80, and $228836.80 respectively.

Learn more about interest on:

https://brainly.com/question/25545513

In 2019, Martin had two employers during the year. Both employers withheld Social Security tax from his wages in the amounts of $4,314.05 and $4,274.75. What amount can Martin claim as a credit against his income tax when he files his income tax return

Answers

Answer:

$1241.80

Explanation:

From the given information:

the social security taxes withheld by both employers are $4314.05 and $4274.75 respectively.

Let's recall that the maximum amount the IRS can also withhold from wages is $7347.00.

Therefore;

the required amount that can be claimed as a credit is:

= $4,314.05 +  $4,274.75 - $7347.00

= $1241.80

Answer:

$349

Explanation:

1) 4,314.05 + 4,274.75 = 8,588.80

2) Social security withheld max: 132,900 * 6.2% = 8,239.80

3) 8,588.80 - 8,239.80 = 349

Consider the following yields to maturity on various one-year zero-coupon securities: Security: Treasury AAA Corporate BBB Corporate B Corporate Yield (%): 4.6 4.8 5.6 6.2 The price (expressed as a percentage of the face value) of a one-year, zero-coupon, corporate bond with a BBB rating is closest to:

Answers

Answer:

94.70%

Explanation:

The computation of the price expressed as a percentage of the face value is given below:

= Price ÷ Face value × 100

= (Face value ÷ (1 + YTM)) ÷ Face value × 100

= ($1,000 ÷ (1 + 5.6%)) ÷ ($1,000) × 100

= $946.97 ÷ $1,000 × 100

= 94.70%

Hence, the price expressed as a percentage of the face value is 94.70%

Here we assume the face value be $1,000

A company uses a perpetual inventory system. The company began its fiscal year with inventory of $998,000. Purchases of merchandise on account during the year totaled $3,124,089. Merchandise costing $3,456,980 was sold on account for $6,909,879. Prepare the journal entries to record these transactions.

Answers

Answer:

Date  Account Titles and Explanation              Debit            Credit

          Inventory                                                 $3,124,089

                Account payable                                                    $3,124,089

          (To record purchase of merchandise inventory)

            Account receivables                             $6,909,879

                  Sales revenues                                                    $6,909,879

           (To record sales on account)

            Cost of goods sold                                $3,456,980

                  Inventory                                                               $3,456,980

             (To record the cost of sales)

Batch Co. employs knowledge workers and is finding that its employees are retiring closer to age 75 than to age 65. As a result, they recently amended their defined benefit pension plan such that benefits will begin at age 72, with certain exceptions for those employees demonstrating an earlier need, instead of at age 60. Batch Co. has been able to measure the actuarial present value of this amendment, which is the change in the projected benefit obligation (PBO) that results from the change. How will this affect pension expense in current and future periods?

Answers

Answer:

It will decrease prior service cost and, as prior service cost is amortized, will decrease pension expense.

Explanation:

In the given if there is any change in the projected benefit obligation so the pension expense would impact in the present and future period by reducing the service cost that incurred before also the service cost that incurred before would be amortized that ultimately reduce the pension expense

Therefore the first option is correct

A review of Parson Corporation's accounting records found that at a volume of 90,000 units, the variable and fixed cost per unit amounted to $8 and $4, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 85,000 units

Answers

Answer:

Total cost= $1,040,000

Explanation:

For 90,000 units:

Unitary variable cost= $8

Unitary fixed cost= $4

First, we need to calculate the total fixed cost:

Total fixed cost= 4*90,000= $360,000

Now, we can determine the total cost for 85,000 units:

Total cost= 85,000*8 + 360,000

Total cost= $1,040,000

An investor is in the 33 percent tax bracket and pays long-term capital gains taxes of 15 percent. What are the taxes owed (or saved in the case of losses) in the current tax year for each of the following situations?
a) Net short-term capital gains of $3,000; net long-term capital gains of $4,000
b) Net short-term capital gains of $3,000; net long-term capital losses of $4,000
c) Net short-term capital losses of $3,000; net long-term capital gains of $4,000
d) Net short-term capital gains of $3,000; net long-term capital losses of $2,000
e) Net short-term capital losses of $4,000; net long-term capital gains of $3,000
f) Net short-term capital losses of $1,000; net long-term capital losses of $1,500
g) Net short-term capital losses of $3,000; net long-term capital losses of $2,000

Answers

Answer:

The taxes owed (or saved in the case of losses) in the current tax year for each of the following situations) are:

     Taxes owed     Taxes saved

a.       $1,590              $0

b.       $0                     $1,000

c.       $150                 $0

d.      $0                     $1,000

e.      $0                     $1,000

f.       $0                   $2,500

g.      $0                  $5,000

Explanation:

a) Data:

Investor's tax bracket = 33% (same as the short-term capital gains taxes)

Long-term capital gains taxes = 15%

b) Events and Calculations:

a) Net short-term capital gains of $3,000; net long-term capital gains of $4,000

Short-term tax = $990 ($3,000*33%)

Long-term tax = $600 ($4,000*15%)

Total taxes =    $1,590

b) Net short-term capital gains of $3,000; net long-term capital losses of $4,000

Long-term capital losses = $4,000

Short-term capital gains =   (3,000)

Savings =                             $1,000

c) Net short-term capital losses of $3,000; net long-term capital gains of $4,000

Long-term capital gains = $4,000

Short-term capital losses  (3,000)

Long-term capital gains taxes = $150 ($1,000 * 15%)

d) Net short-term capital gains of $3,000; net long-term capital losses of $2,000

Short-term capital gains = $3,000

Long-term capital losses   (2,000)

Savings =                            $1,000

e) Net short-term capital losses of $4,000; net long-term capital gains of $3,000

Short-term capital losses = $4,000

Long-term capital gains       (3,000)

Savings                                $1,000

f) Net short-term capital losses of $1,000; net long-term capital losses of $1,500

Short-term capital losses = $1,000

Long-term capital losses      1,500

Savings =                            $2,500

g) Net short-term capital losses of $3,000; net long-term capital losses of $2,000

Short-term capital losses = $3,000

Long-term capital losses      2,000

Savings =                            $5,000

[The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 43,000 $ 52,000 Work in process 10,200 21,300 Finished goods 63,000 35,600 Activities and information for May Raw materials purchases (paid with cash) 210,000 Factory payroll (paid with cash) 345,000 Factory overhead Indirect materials 15,000 Indirect labor 80,000 Other overhead costs 120,000 Sales (received in cash) 1,400,000 Predetermined overhead rate based on direct labor cost 70 % Raw materials purchases for cash. Direct materials usage. Indirect materials usage. Prepare journal entries for the above transactions for the month of May.

Answers

Answer:

Journals have been prepared below !

Explanation:

For each of the following citations, identify the type of authority (statutory, administrative, or judicial) and explain the citation.

a. Reg. Sec. 1.111-1(b)
b. IRC Sec. 469(c)(7)(B)(i)
c. Rev. Rul. 82-204, 1982-2 C.B. 192
d. Amdahl Corp., 108 TC 507 (1997)
e. PLR 9727004
f. Hills v. Comm., 50 AFTR2d 82-6070 (11th Cir., 1982)

Answers

Answer:

Explanation:

Administrative

Statutory

Administrative

Judicial

Administrative

Judicial

Universal Manufacturing uses a weighted-average process-costing system. All materials are introduced at the start of manufacturing, and conversion costs are incurred evenly throughout the process. The company's beginning and ending work-in-process inventories totaled 10,000 units and 15,000 units, respectively, with the latter units being 2/3 complete at the end of the period. Universal started 30,000 units into production and completed 25,000 units. Manufacturing costs follow.
Beginning work in process: Materials, $60,000; conversion cost, $150,000
Current costs: Materials, $180,000; conversion cost, $480,000
Universal's equivalent-unit cost for conversion cost is:____.
a. $4.50.
b. $6.00.
c. $8.00.
d. $9.60.
e. some other amount.

Answers

Answer: b. $6.00

Explanation:

Equivalent Cost Per Unit = Total Material Cost/Materials Equivalent Units

Materials Equivalent Units

= Opening inventory + Units completed + Ending inventory

= 10,000 + 25,000 + 5,000

= 40,000 units

Equivalent cost per unit = (Beginning WIP Materials + Current costs) / Materials EUP

= (60,000 + 180,000) / 40,000

= $6.00

Note: Ending materials inventory = Units started - Units completed

Jones signs a three-year contract to construct a new office building for Smith. The contract price is $3 million and estimated cost $2 million. For year one, Jones recognizes $1 million of revenue and $800,000 of cost. During year 2, Jones incurs $1.2 million in cost and estimates that during year 3 an additional $1.1 million will be necessary to complete the project. Actual costs incurred during the third year were $1.2 million. For year 3, Jones should recognize a loss of:____.
a. $100,000.
b. $0.
c. $300,000.
d. $200,000.

Answers

Answer:

$100,000

Explanation:

Jones incurs $1.2 million in cost and estimates that during year 3 an additional $1.1 million will be necessary to complete the project

additional costs for year 3 over the estimated costs represent an additional loss}

The balance in the equipment account is $3,150,000, and the balance in the accumulated depreciation—equipment account is $2,075,000. a. What is the book value of the equipment? $fill in the blank 1 b. Does the balance in the accumulated depreciation account mean that the equipment's loss of value is $2,075,000? , because depreciation is an allocation of the of the equipment to the periods benefiting from its use.

Answers

Answer:

A. $1,075,000

B. No

Explanation:

A. Calculation for the book value of the equipment

Using this formula

Book value of the equipment=Equipment account -Accumulated depreciation—equipment account

Let plug in the formula

Book value of the equipment= $3,150,000-$2,075,000

Book value of the equipment=$1,075,000

Therefore the book value of the equipment will be $1,075,000

(b) NO the balance in the accumulated depreciation account does NOT mean that the equipment's loss of value is the amount of $2,075,000.

How do state and federal courts differ in the United States?

Answers

Answer:The primary distinction is that state and local courts are authorized to hear cases involving the laws and citizens of their state or city, while federal courts decide lawsuits between citizens of different states, cases against the United States, and cases involving specific federal laws.

Explanation:

For the year, Jensen's has depreciation of $2,058, dividends paid of $125, interest expense of $382, an addition to retained earnings of $3,408, and an increase in common stock of $2,500. The total tax rate is 21 percent. What is the operating cash flow

Answers

Answer:

$5,973

Explanation:

The computation of operating cash flow is seen below;

Net income = $125 + $3,408 = $3533

Net income $3,533 - Interest expense $382 - Depreciation $2,058 = EBIT $1,093

Tax = 21% × $1,093 = $229.53

Operating cash flow = $1,093 + $2,058 + $2,700 - $229.53 = $5,973

Describe the role of communication in effective leadership. Discuss your own administration style and how it may influence your successful completion of your program of study. Use headings to support the organization of your content. (1,000 words, two scholarly sources, APA format) Discuss in your owns words

Answers

Answer:

Knowledge and ideas of leader are shared with the team through effective communication.

Explanation:

A good leader possesses many qualities among which effective communication is an essential quality which a leader must have. Leader should be able to express his ideas and inspire others through his leadership skills. Leader should communicate with its team in a routine language and should not use jargons. The team should be involved in decision making and ideas should be gathered through brainstorming.

The time management skill of knowing your limits means: A. Knowing how long it will take you to accomplish a task. B. Knowing how to accomplish a lot of objectives so you do not have to cut back C. Knowing how to do everything so you never need to say no. D. All of the above

Answers

Answer:

A. Knowing how long it will take you to accomplish a task

Explanation:

Knowing your limits refers to understanding one potential and abilities. It is recognizing one's strengths and weaknesses.  The time management skill of knowing your limits refers to the ability to accurately estimates how long it will take one to accomplish a specific task. It implies that an individual is fully aware of their true potential, what they can achieve, and how long it will take them to achieve it.

Answer:

The answer is A

Explanation:

Application of career management model

Summary of Preferred work

1. Components of PWE

2. Tasks and activities more interesting to you

3. Significant talents you want to express at work

4. Importance of independence at work

5. Importance of job security

6. Relationship between work and other parts of life

7. Physical work setting

Answers

I H A T E T H I S F E E L I N G

The following accounts are taken from the ledger of Crane Company at December 31, 2017. Notes Payable $19,600 Cash $5,900 Common Stock 24,500 Supplies 4,900 Equipment 74,500 Rent Expense 2,000 Dividends 7,800 Salaries and Wages Payable 2,900 Salaries and Wages Expense 37,200 Accounts Payable 8,800 Service Revenue 84,300 Accounts Receivable 7,800
Prepare a trial balance.
CRANE COMPANY
Trial Balance
For the Month Ended December 31, 2017For the Year Ended December 31, 2017December 31, 2017
Debit Credit
$ $
$ $

Answers

Answer:

DEBIT SIDE $140,100

CREDIT SIDE $140,100

Explanation:

Preparation of a trial balance.

CRANE COMPANY Trial Balance For the Month Ended December 31, 2017

DEBIT SIDE

Equipment $74,500

Accounts receivable $7,800

Cash $5,900

Supplies $4,900

Dividends $7,800

Salaries and Wages Expense $37,200

Rent Expense $2,000

TOTAL DEBIT SIDE $140,100

CREDIT SIDE

Common stock $24,500

Notes payable $19,600

Salaries and wages payable $2,900

Accounts payable $8,800

Service Revenue $84,300

TOTAL CREDIT SIDE $140,100

Therefore Prepare a trial balance CRANE COMPANY Trial Balance will have both. DEBIT and CREDIT BALANCE of $140,100

What are Apple’s dollar amounts for assets, liabilities, and equity at September 29, 2018? Confirm that the accounting equation holds in this case. Assets = Liabilities + Equity Answer Answer Answer Round to one decimal place (i.e. 34.5%) What percent of Apple’s assets is financed from creditor financing sources?

Answers

Answer:

70.7%

Explanation:

Note: The full question is attached as picture below

Percent of Apple's assets is financed from creditor financing sources = Liabilities / Assets

Percent of Apple's assets is financed from creditor financing sources = $258,578 / $365,725

Percent of Apple's assets is financed from creditor financing sources = 0.70702851

Percent of Apple's assets is financed from creditor financing sources = 70.7%

choosing a computer that costs_____ instead of one that cost ____
means that youll have less money available for other purchases
a 1700 1900
b 1700 1800
c 1800 1700
d 1800 1900

Answers

The correct answer is C, no doubt
1800 1700 because the first number is bigger so it only makes scense

Use the following items to prepare a balance sheet and a cash flow statement. Determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. Balance Sheet and Cash Flows Rent for the month$1,240 Monthly take-home salary$3,420 Cash in checking account 700 Savings account balance 2,110 Spending for food 820 Balance of educational loan 2,930 Current value of automobile 8,590 Telephone bill paid for month 69 Credit card balance 236 Loan payment 177 Auto insurance 239 Household possessions 3,680 Stereo equipment 3,240 Payment for electricity 110 Lunches/parking at work 271 Donations 169 Home computer 1,870 Value of stock investment 1,750 Clothing purchase 148 Restaurant spending 177

Answers

Answer:

1. Balance Sheet:

Assets:

Cash in checking account       $700

Savings account balance         2,110

Current value of automobile 8,590

Home computer                      1,870

Value of stock investment     1,750

Household possessions       3,680

Stereo equipment                 3,240   $21,940

Liabilities:

Balance of educational loan 2,930

Credit card balance                 236    $3,166

Net Worth                                          $18,774

2. Cash Flows:

Cash Inflows:

Monthly take-home salary $3,420

Outflows:

Rent for the month            $1,240

Spending for food                  820

Telephone bill paid for month 69

Auto insurance                       239

Payment for electricity             110

Lunches/parking at work        271

Donations                                169

Clothing purchase                  148

Restaurant spending              177

Loan payment                         177

Total cash outflows         $3,420

Explanation:

Monthly take-home salary $3,420

Rent for the month $1,240

Spending for food 820

Telephone bill paid for month 69

Auto insurance 239

Payment for electricity 110

Lunches/parking at work 271

Donations 169

Clothing purchase 148

Restaurant spending 177

Loan payment 177

Assets:

Cash in checking account 700

Savings account balance 2,110

Current value of automobile 8,590

Home computer 1,870

Value of stock investment 1,750

Household possessions 3,680

Stereo equipment 3,240

Liabilities:

Balance of educational loan 2,930

Credit card balance 236

Ashley Corporation uses a process-cost accounting system. The company adds direct materials and direct labor at the start of its production process; overhead cost is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?

a. Materials, 100%; labor, 100%; overhead cost, 40%.
b. Materials, 100%; labor, 100%; overhead cost, 100%.
c. Materials, 100%; labor 40%; overhead cost, 40%.
d. Materials, 40%; labor, 40%; overhead cost, 60%.
e. Materials, 40%; labor, 40%; overhead cost, 100%.

Answers

Answer:

a. Materials, 100%; labor, 100%; overhead cost, 40%

Explanation:

Since Materials and Labor are added at the start of its production process, they will always be 100 % complete at the the end of the period as this mark is already passed. Overheads will be complete up to the extent of the work done in work in process that is 40%.

Select the correct answer.

The restaurant manager rarely offers instructions. He expects employees to make decisions without input. He is nice and cares about them, but

they often don't have what they need at the restaurant or don't have enough people working. He is an example of a:

OA Authoritarian leader

OB. Free rein leader

OC, Democratic leader

OD. Narcissistic leader

Answers

Answer:

B.

Explanation:

Free rein leadership, also known as the Laissez-Faire style, is a type of leadership in which the manager or leader allows their employees to make decisions. In this form of leadership, the manager gives his/her employees objectives and does not provide any guidance on how to achieve those objectives.

In the given case, this restaurant manager exhibits the quality of free-rein leadership. He has set his employees off the noose to allow them to make decisions on their own.

So, option B is the correct answer.

Answer:

b, free rein leader

Better Corp. completed the following transactions during Year 2:

a. Purchased land for $10,500 cash.
b. Acquired $36,000 cash from the issue of common stock.
c. Received $75,000 cash for providing services to customers.
d. Paid cash operating expenses of $40,900.
e. Borrowed $21,000 cash from the bank.
f. Paid a $10,500 cash dividend to the stockholders.
g. Determined that the market value of the land purchased in event 1 is $46,000.

Required:
a. Record the transactions In the approprlate general ledger accounts. Record the amounts of revenue, expense, and dividends In the Retalned Earnings column. Provide the appropriate titles for these accounts In the last column of the table.
b. As of December 31, 2018, determine the total amount of assets, lablities, and stockholders' equity and present this Information In the form of an accounting equation.
c. What is the amount of total assets, liabilities, and stockholders' equity as of January 1, 2019?

Answers

Answer:

Better Corp.

a. Journal Entries:

a. Debit Land $10,500

Credit Cash $10,500

To record the purchase of land.

b. Debit Cash $36,000

Credit Common Stock $36,000

To record the issuance of stock for cash.

c. Debit Cash $75,000

Credit Service Revenue $75,000

To record the receipt of cash for services provided.

d. Debit Operating expenses $40,900

Credit Cash $40,900

To record the payment of operating expenses.

e. Debit Cash $21,000

Credit Bank Loan $21,000

To record the borrowing of cash from the bank.

f. Debit Dividends $10,500

Credit Cash $10,500

To record the payment of cash dividend to stockholders.

g. N/A

a2. a. Assets (Land +$10,500 + Cash- $10,500) = Liabilities + Equity

b. Assets (Cash + $36,000) = Liabilities + Equity (Common Stock + $36,000)

c. Assets (Cash $36,000 + 75,000) = Liabilities + Equity (Common Stock $36,000 + Retained Earnings + $75,000) Service Revenue

d. Assets (Cash 111,000 - $40,900) = Liabilities + Equity (Common Stock $36,000 + Retained Earnings $75,000 = $40,900) Operating Expense

e. Assets (Cash $70,100 + $21,000) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $34,100)

f. Assets (Cash $91,100 - $10,500) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $34,100 - $10,500) Dividends

g. Assets (Cash $80,600) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $23,600)

b. Total amount of assets, liabilities, and stockholders' equity as of December 31, 2018:

Total assets $80,600  = Liabilities $21,000 + Equity (Common Stock $36,000 + Retained Earnings $23,600)

c. The amount of total assets, liabilities, and stockholders' equity as of January 1, 2019:

Assets = $80,600

Liabilities = $21,000

Equity = $59,600

Explanation:

The accounting equation is Assets = Liabilities + Equity.  It is the basis of the double-entry system of accounting.  With this equation, every transaction is always recorded twice.

On March 2nd, a fire destroyed the entire inventory stored in a warehouse for the Madison, Inc. The following information is available from the records of the company's periodic inventory system: Beginning inventory 1/01/2020 $989,000 Purchases through 3/02/2020 $784,329 Sales through 3/02/2020 $1,345,789 Gross Profit Ratio 33% Estimate the cost of the inventory destroyed by the fire using the Gross Profit Method.

Answers

Answer:

Madison, Inc.

The cost of the inventory destroyed by the fire using the Gross Profit Method is:

$871,650

Explanation:

a) Data and Calculations:

Beginning inventory 1/01/2020 = $989,000

Purchases through 3/02/2020 = $784,329

Sales through 3/02/2020 = $1,345,789

Gross Profit Ratio 33%

Gross profit = $444,110 ($1,345,789 * 33%)

Cost of goods sold = $901,679 ($1,345,789 - $444,110)

Cost of goods available for sale = $1,773,329 ($989,000 + $784,329)

Estimate of the cost of the inventory destroyed by the fire = cost of goods available for sale minus the cost of goods sold

= $871,650 ($1,773,329 - $901,679)

b) The estimate of the cost of the inventory destroyed by the fire is equal to the cost of the ending inventory.  It is obtained by subtracting the cost of goods sold from the cost of goods available for sale for the period.  The gross profit margin is the difference between the Sales Revenue and the Cost of goods sold.  When expressed as a percentage of Sales Revenue, the resulting figure is called the gross profit margin ratio.

Cost of Goods Sold Section, Multiple-Step Income Statement
Based on the information that follows, prepare the cost of goods sold section of a multiple-step income statement.
Merchandise Inventory, January 1, 20-- $37,000
Estimated Returns Inventory, January 1, 20-- 1,000
Purchases 102,000
Purchases Returns and Allowances 4,200
Purchases Discounts 2,040
Freight-In 800
Merchandise Inventory, December 31, 20-- 30,500
Estimated Returns Inventory, December 31, 20-- 1,500
Income Statement
For Year Ended December 31, 20--
Cost of goods sold:
$
$
$
$

$


$
$
Cost of goods sold $

Answers

Answer and Explanation:

The preparation of the cost of goods sold section of a multiple-step income statement is presented below:

Cost of goods section

Multiple-income statement

Opening inventory         $37,000

Estimated return inventory $1,000

Purchase $102,000

Less purchase returns -$4,200

Less: Purchase discount -$2,040

Add: Freight in $800

Less: closing inventory -$30,500

Less: estimated return inventory -$1,500

Cost of goods sold $102,560

9. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. A supplier has offered to manufacture and deliver 87,000 Alphas to Cane for a price of $108 per unit. What is the financial advantage (disadvantage) of buying 87,000 units from the supplier instead of making those units?

Answers

Answer: Financial disadvantage of -$‭863,000‬

Explanation:

If they made the 87 thousand units themselves, they would incur a cost of:

= 87,000 * (Direct labor + Direct materials + Variable manufacturing overhead) +  Traceable fixed manufacturing overhead

= 87,000 * (23 + 24 + 22) + (23 * 110,000)

= 87,000 * 69 + ‭2,530,000‬

= $‭‭‭8,533,000‬

Traceable fixed costs are based on the total capacity of 110,000 units being produced and so will not change.

If they buy from the supplier, the cost would be:

= 108 * 87,000

= $‭9,396,000‬

Financial advantage (disadvantage) = ‭‭8,533,000‬‬ - ‭9,396,000‬

= -$‭863,000‬

Other Questions
Suppose two projects have the same expected business value. Project A has a very high estimated business value along with a high probability of failure. Project B has a much lower estimated business value along with a low probability of failure. If you could do only one of the projects, which one would you choose and under what conditions Write the percent as a mixed number in simplest form.168% Which diagram best shows the effect an important document had on early american ideas about government? ( PLS HELP ) Magna Carta -> No government should be led by a kingCommon sense-> Rebellion against the government is never acceptableEnglish Bill of Rights-> Citizens have freedoms that the government cannot take awayMayflower Compact -> Government power should be split between branches. Escoge la opcin correcta para completar la oracin.Los turistas que se alojan en una capital del Caribe, lo hacen en1.) miami 2.) varadero3.) la habana 4.) luquillo Is Marxism useful for understanding society in the present time? A bird was sitting 12 feet from the base of an oak tree and flew 20 feet to reach the top of the tree. How tall is the tree? Let LaTeX: x = \text{-}\frac {11} 8x = - 11 8 and LaTeX: y = \text{-}\frac {11} 4y = - 11 4.Which expression has a negative value?Group of answer choicesLaTeX: x + yx + yLaTeX: x - yx yLaTeX: x \cdot yx yLaTeX: \frac x y The electromagnetic spectrum has waves of varying levels of energy. Whichwave has the least energy? How to build democracy? Find the value of X kind of simple I just need help Which expression is equivalent to x228x+196? Price of oil decreased from 70 to 50. The percentage of decrease is ________. * Emily wants to cover her kitchen floor with ceramic tile. The diagram below shows the layout of her kitchen.What is the area of her kitchen floor, in square feet, that will be covered with ceramic tile?411 ft2381 ft2255 ft2567 ft2 According to the label, what is the estimated cost of running this air conditioner for 3,000hours if electrical energy costs 10 cents per kilowatt-hour?a.$40b.$198c.$238d.$300 A 2.5 L container holds a sample of hydrogen gas at 291 K and 180 kPa.If the pressure increases to 350 kPa and the volume remains constant, what will the new temperature be?Round your answer to one decimal place. Key Categories: more libraries and thousands of functionsSelect one:a. Powerb. Practicalityc. Possibilityd. Price what is 40001mil I'm stuck on it Read the claim.Which statement is the strongest counterclaim to theclaim?Claim. The suffragette-defaced penny is the mosthistorically significant object because it represents thetrue beginnings of women's fight for the vote.O The campaign for women's suffrage had actuallybegun with the Great Reform Act of 1832, longbefore the defaced penny was created.O Many other tactics, such as letter bombings andhunger strikes, were taking place at the same timethat the defaced penny was being circulated.O The extremely slow process of redefining the Britishpolitical nation began in the 1820s and took manydecades to fully unfold.O The defaced penny was not created until 1903, so itcould not possibly represent the true beginnings ofwomen's suffrage Help me out! Answer? Anyone?? Plz HELP!! 10+10 I NEED THIS JOHN HAD 5%Of toys ANd GOllOrd Had !%