Answer:
Is the same as a corporation.
Explanation:
The partnership is a firm in which there are two or more partners comes in a contract to share the profit and losses to their profit and losses sharing ratio
A limited partnership is a partnership firm in which the partners have limited liability to their investment but the general partner has unlimited liability
It is just like a corporation who contains limited partners with the limited liability
Howard Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet.
Data on direct department costs, number of employees, and space occupied are as follows:
S1
S2
P1
P2
Direct dept. costs
$7,500
$11,000
$27,500
$30,000
Number of employees
10
5
20
25
Space occupied (sq. ft.)
1,000
500
1,500
2,500
If Howard used the reciprocal method, the algebraic equation expressing the total costs allocated from S1 is
Select one:
a. S1 = $7,500 + 0.10S2.
b. S1 = $7,500 + 0.20S2.
c. S1 = $10,000 + 0.20S2.
d. S1 = $10,000 + 0.10S2.
Answer: S1 = $ 7500 + 0.20 S2
Explanation:
From the question, Howard Company has two support departments which are (S1 and S2) and two producing departments which are (P1 and P2). The department S1 costs are allocated on the basis of number of employees, and the department S2 costs are allocated on basis of space occupied expressed in square feet.
The algebraic equation expressing the total costs allocated from S1 is calculated as follow:
S1 Direct Cost = $ 7500
The cost of S2 will be allocated to S1 based on the space occupied and the total space that is occupied is:
= 1000 + 1500 + 2500
= 5000 sq ft
Space occupied by S1 = 1000
S2’s cost allocated to S1 will be:
= (1000 / 5000) of S2 cost
= 0.20 S2
Therefore the correct option is:
S1 = $ 7500 + 0.20 S2
Several studies indicate that the use of collaborative research agreement (between several firms, research centers, suppliers, competitors, universities, etc.) is increasing around the world. What are some reasons collaborative research is becoming more prevalent?
Answer & Explanation: Collaborative research refers to a research or study done by different independent bodies. Take for instance a scientist intends to undertake a study, he sorts the collaboration of a university.
Several benefits exist in collaborative research some of which includes;
1). It creates opportunity for an individual to develop as a scholarly author. This is because in working together the work gets more attention and recognition.
2). It makes the work to be done reduced. Considering the fact that people will handle different aspects of the research, the work per person will be less.
3). There will be variety of techniques. Having people work on same research enhances the research as different techniques are bound to be used to achieve result.
4). It gives room for more creativity. Because of the increased number of people working on the same tasks, diverse ideas will be brought forward, there will be knowledge sharing and this in turn will improve the creativity.
completion. Item8 Part 5 of 5 10 points Return to questionItem 8Item 8 Part 5 of 5 10 points Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,542,000 $ 3,772,000 $ 2,074,600 Estimated costs to complete as of year-end 5,658,000 1,886,000 0 Billings during the year 2,020,000 4,294,000 3,686,000 Cash collections during the year 1,810,000 3,800,000 4,390,000 Westgate recognizes revenue over time according to percentage of completion. 5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)
Answer and Explanation:
The computation of amount of revenue and gross profit (loss) to be recognized in each of the three years is shown below:-
Sales revenue for the present period for 2021 = $31,00,000.00
Sales revenue for the present period for 2022 = $46,00,000.00
Sales revenue for the present period for 2023 = $23,00,000.00
Gross Profit for year 2021 = $5,58,000.00
Gross profit for year 2022 = $8,28,000.00
Gross profit for year 2023 = $2,25,400.00
To reach the sales revenue we simply deduct the Sales revenue recognized in previous period from Sales revenue recognized till date for 3 years on the other hand to compute the gross profit we simply deduct the Cost incurred during the year from Sales revenue for the present period for 3 years.
For clarification we attached the spreadsheet to reach the sales revenue and gross profit for 3 years.
In 2010, the MoreForLess Company had revenues of $2,000,000 while costs were $1,500,000. In 2011, MoreForLess will be introducing a new product line that will generate $200,000 in sales revenues and $160,000 in costs. Assuming no changes are expected for the other products, the differential operating profit for 2011 is
Answer:
Differential profit Profit = $40,000
Explanation:
The differential operating profit is the difference between the operating profit before the introduction of the product and after the introduction of the new product
Profit = Revenue - costs
Profit before the introduction of the new product
= 2,000,000 - 1,500,000 = 500,000
Profit after the introduction of the new product
New revenue = (2,000,000 + 200,000) = 2,200,000
Cumulative cost = 1,500,000 + 160,000 = 1,660,000
Profit = 2,200,000 - 1,660,000 = 540000
Differential profit Profit = 540,000 - 500,000= $40,000
Cash Flow Ratios Tracy Company reports the following amounts in its annual financial statements:_________.
Cash flow from operating activities $90,000 Capital expenditures $31,000*
Cash flow from investing activities (70,000) Average current assets 80,000
Cash flow from financing activities (10,000) Average current liabilities 60,000
Net income 44,000 Total assets 180,000
* This amount is a cash outflow.
a. Compute Tracy's free cash flow.
b. Compute Tracy's operating-cash-flow-to-current-liabilities ratio.
c. Compute Tracy's operating-cash-flow-to-capital-expenditures ratio.
Answer: a. $59,000. b. 1.5x. c. 2.9x
Explanation:
a) Tracy's Free cash flow will be calculated as:
= Cashflow from operating activities - Capital expenditures
= $90000 - $31000
=$59000
b) Tracy's operating cash flow to current liabilities ratio will be:
Operating cashflow ÷ Current liabilities
= $90000 ÷ $60000
= 1.5x
c) Tracy's operating cashflow to capital expenditures ratio will be:
= Operating cashflow ÷ capital expenditure
= $90000 ÷ $31000
= 2.90x
James is the landlord of an apartment containing 22 houses which are to be maintained by him and Lily is one of the tenants. In which of the following cases would the tenant be liable for an injury occurring on the leased premises?A) James was negligent in repairing the broken step on which Lily tripped and broke her ankle.B) Lily's nephew cut his finger with the knife that was negligently kept in Lily's kitchen.C) A little child at the apartment almost choked himself by consuming the paint that was chipping off the common wall between Lily's apartment and her neighbor's.D) The entire apartment caught fire and the fire extinguisher could not be used since it was installed only in Lily's rented house and she was out shopping.E) Lily's visitor got into the common lift in the apartment that suddenly crashed leading to severe injuries to Lily's visi
Answer: B) Lily's nephew cut his finger with the knife that was negligently kept in Lily's kitchen.
Explanation:
James as the landlord will be responsible for the structural or other defects of the house so long as it is the house that is the problem.
Activities that go on inside a tenants house that are caused by the actions of the tenants will not be a liability on the path of the landlord.
If an elevator is damaged or there weren't enough fire extinguishers or there was a broken step or poor quality paint was used, these are all defects related to the house itself and as such will result in negligence on the part of the landlord.
A child getting injured by a knife that Lily as a tenant left, in her apartment will.be the fault of Lily and the negligence can only be on her because it was due to actions by her as a tenant in her leased property.
An inexperienced accountant for Ayayai Corp. showed the following in the income statement: income before income taxes $250,000 and unrealized gain on available-for-sale securities (before taxes) $85,000. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 25% tax rate. Prepare a correct statement of comprehensive income.
Answer:
Ayayai Corp.
Statement of Comprehensive Income
For the Year Ended xxx, 202x
Net income $187,500
Other comprehensive income:
Unrealized gain on AFS securities $85,000
Comprehensive income $272,500
Explanation:
In order to prepare a statement of comprehensive income we first need to determine net income after taxes = $250,000 x (1 - 25%) = $187,500
Unrealized gains or losses are not taxed until they are actually realized (either make profit or lose money).
gThe fact that flotation costs can be significant is justification for: maintaining a low dividend policy and rarely issuing extra dividends. a firm to issue larger dividends than their closest competitors. maintaining a high dividend policy. maintaining a constant dividend policy even when profits decline significantly. a firm to maintain a constant dividend policy even if they frequently have to issue new shares of stock to do so.
Answer:
Maintaining a low dividend policy and rarely issuing extra dividends.
Explanation:
This cost is said to be accumulated or generated by a company when dealing new security systems or organisation into the company. This happens in a registered or legal form of absorption of the said body. And this is been applied or shown in percentages during summation or analysis.
Many factors affect flotation which ranges from the type of issued securities, their size, and risks associated with the transaction. It is generally lower than those for issuing common shares. It is shown as the issuance of common shares typically ranges from 2% to 8%.
Presented below is information related to Waterway Inc.’s inventory, assuming Waterway uses lower-of-LIFO cost-or-market. (per unit) Skis Boots Parkas Historical cost $262.20 $146.28 $73.14 Selling price 292.56 200.10 101.78 Cost to distribute 26.22 11.04 3.45 Current replacement cost 280.14 144.90 70.38 Normal profit margin 44.16 40.02 29.33 Determine the following: (a) The two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-of-cost-or-market computation for skis. (Round answers to 2 decimal places, e.g. 52.75.)Ceiling Limit
Floor Limit
(b) the cost amount that should be used in the lower-of-cost-or-market comparison of boots.
The cost amount
Answer:
A. Skis
Ceiling $266.34
Floor $222.18
B.Cost Amount $146.28
C.The market amount $70.38
Explanation:
A. Computation of Waterway Inc two limits to market value that should be used in the lower-of-cost-or-market computation for skis
A. Skis
Ceiling
Selling price 292.56
less:cost to distribute -26.22
Ceiling 266.34
Floor
NRV 266.34
less:normal profit margin -44.16
Floor 222.18
B. Computation of the cost amount that should be used in the lower-of-cost-or-market comparison of boots.
Boots
Ceiling
Selling price 200.10
less:cost to distribute -11.04
Ceiling 189.06
Floor
NRV 189.06
less:normal profit margin -40.02
Floor 149.04
Cost Replacement ceiling Floor MV LCM
146.28 144.90 189.06 149.04 149.04 146.28
Therefore the cost amount that should be used in the lower-of-cost-or-market comparison of boots will be 146.28
C.Calucation for the market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.
Parkas
Ceiling
Selling price 101.78
less:cost to distribute -3.45
Ceiling 98.33
Floor
NRV 98.33
less:normal profit margin -29.33
Floor 69
Cost Replacement ceiling Floor MV LCM
73.14 70.38 99.33 69 70.38 70.38
The market amount $70.38
Certain balance sheet accounts of a foreign subsidiary of the Rose Co. had been stated in U.S. dollars as follows: Stated at Current Rates Historical Rates Accounts receivable—current $ 280,000 $ 308,000 Accounts receivable—long term 140,000 154,000 Prepaid insurance 70,000 77,000 Goodwill 112,000 119,000 Totals $ 602,000 $ 658,000 If the subsidiary's local currency is its functional currency, what total amount should be included in Tulip's balance sheet in U.S. dollars? $658,000. $609,000. $616,000. $602,000.
Answer:
$602,000
Explanation:
Since the foreign currency is the functional currency in this case, what is required to be done is the translation of the balance sheet accounts, not a remeasurement of the accounts.
The guiding principle is that when the financial statement of subsidiary is prepared using functional currency, assets and liabilities should be translated using the current rates.
Since $602,000 is the total using the current in the question, the total amount that should be included in Tulip's balance sheet in U.S. dollars is therefore $602,000.
True or False : A population refers to the entirety of a group.
Answer:
It is True.
Explanation:
A population may refer to an entire group of people, objects, events, hospital visits, or measurements.
ABC Company keeps their accounting records on the cash basis. During the year, ABC received $260,000 from clients, and ABC paid $85,000 to cover operating expenses. Account balances as of the dates given are as follow:
January 1 December 31
Accounts Receivable $24,000 $52,000
Accrued Liabilities $56,000 $40,000
Unearned Service Revenue $35,000 $65,000
Prepaid Expenses $26,000 $28,000
In addition, depreciation expense for the current year is $16,000.
Accrual basis net income is:
a. $181,000
b. $145,000
c. $201,000
d. $165,000
Answer:
a. $181,000
Explanation:
The Income Statement consists of Revenue and Expenses recorded on Accrual Basis. The Accrual Basis of Accounting states that Revenue and Expenses must be recorded as and when they Occur or Incur not when cash is paid or received.
Calculation of Net Income will thus be as follows :
Revenue Received $260,000
Unearned Revenue($65,000-$35,000) $30,000
Total Revenue $290,000
Less Expenses :
Expenses ($85,000+$26,000-$28,000) $83,000
Depreciation $16,000
Net Income $181,000
A stock sells for $50. The next dividend will be $5 per share. If the rate of return earned on reinvested funds is a constant 15% and the company reinvests a constant 20% of earnings in the firm, what must be the discount rate
Answer:
The answer is 13%
Explanation:
Solution
Recall that:
A stock sells for =$50
The next dividend is = $5 per share
The rate of return = 15%
Company reinvests a constant of =20%
What is the rate of discount = ?
Now
The first step is to calculate the rate of growth which is shown below:
g = equity return * retention rate
g = 15% * 0.2 = 3%
Thus,
The Gordon growth model is stated below:
Stock price = dividend in following year/ (discount - g)
So,
50 = 5/ (discount - g)
The discount - g = 5/50
Discount - g = 10%
The discount = 10 + 3 = 13%
Therefore the discount rate =13%
On the grant date, January 1st, 2015, the stock was quoted on the stock exchange at $63 per share. The fair value of the options on the grant date was estimated at $15 per option. The amounts of compensation expense ABC should recognize with respect to the options during 2015, 2016, and 2017 are:
Answer:
2015 $31,500
2016 $31,500
2017 $31,500
Explanation:
Number of Options in total × Fair Value of the Stock per option
Where
Number of Options in total = 63
Fair Value of the Stock per option =15
Hence:
(63*100) ×$15
=$6,300 ×$15
= $ 94,500
Compensation expense will be:
2015, 2016, and 2017 will give us 3 years
= $94,500/3
= $31,500 for 2015, 2016, and 2017
Fair value of the options is said to be evaluated on grant date and expenditure is been recognised in 3 years because the employee will be working for 3 years which is from year 2015 to 2017
Larry Company makes and sells 2 models of dishwashers, Model ABC and Model XYZ. For every 2 Model ABC sold, 3 Model XYZ are sold. The following information is also provided: Model ABC Model XYZ Sales per unit $ 490 $ 730 Variable Cost per unit $250 $300 CM per unit $ 240 $ 430 What is the weighted average contribution margin?
Answer:
$354
Explanation:
The computation of the weighted average contribution margin is shown below:
= (Contribution margin per unit for Model ABC × Sales mix for model ABC) + (Contribution margin per unit for Model XYZ × Sales mix for model XYZ) ÷ (Sales mix for model ABC + Sales mix for model XYZ)
= ($240 × 2 models + $430 × 3 models) ÷ (2 models + 3 models)
= ($480 + $1,290) ÷ (5 models)
= $354
We simply applied the above formula
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 11 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $13.75 per share 12 years from today and will increase the dividend by 5.5 percent per year thereafter. If the required return on this stock is 13.5 percent, what is the current share price
Answer:
$42.69
Explanation:
From the question above Metallica Bearings Inc. is expected to pay a dividend of $13.75 pet share for a period of 12 years
The dividend will increase by 5.5 percent per year
= 5.5/100
= 0.055
The required rate of return is 13.5 percent
= 13.5/100
= 0.135
The first step is to calculate the price at 11 years
Price at 11 years= 13.75/ 0.135-0.055
= 13.75/0.08
= $171.87
The next step in to find the current price by applying the following formular
Current share price= Future value/ (1+r)^n
= $171.875/ (1+0.135)^11
= $171.87/ 1.135^11
= $171.87/ 4.026
= $42.69
Current share price= $42.69
Hence the current share price is $42.69
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts.
Cash $13,840
Accounts receivable 12,000
Office supplies 2530
Land 45,840
Office equipment 17,200
Accounts payable 7810
Common Stock 83,220
Cash dividends $1280
Consulting revenue 12,000
Rent expense 2770
Salaries expense 6120
Telephone expense 820
Miscellaneous expenses 630
Required:
Prepare an October income statement for the business.
a. The ownerâs initial investment consists of $37,380 cash and $45,840 in land in exchange for its common stock.
b. The companyâs $17,200 equipment purchase is paid in cash.
c. The accounts payable balance of $7,810 consists of the $2,530 office supplies purchase and $5,280 in employee salaries yet to be paid.
d. The companyâs rent, telephone, and miscellaneous expenses are paid in cash.
e. No cash has been collected on the $12,000 consulting fees earned.
Required:
Prepare a statement of cash flows for Ernst Consulting.
Answer and Explanation:
The Preparation of statement of cash flows for Ernst Consulting is shown below:-
Ernst Consulting
Cash Flows from Operating Activities
Particulars Amount
Paid cash to employees ($840)
Paid cash for rent ($2,770)
Paid cash for telephone expense ($820)
Paid cash for miscellaneous expenses ($630)
Net cash used in Operating Activities ($5,060 )
Cash Flows from Investing Activities
Paid cash for purchase of equipment ($17,200)
Net cash used in Investing Activities ($17,200 )
Cash Flows from Financing Activities
Cash invested by owner $37,380
Cash dividends ($1,280)
Net cash flows provided by Financing Activities $36,100
Net increase ( decrease) in cash $13,840
Cash balance, October 1 0
Cash balance, October 31 $13,840
Therefore we have considered cash inflow presented in positive amount
while cash outflow in negative amount.
Mary offered to sell Mike several pieces of rare Chinese art at a very good price because they were duplicates in her own collection. Mike could not accept the offer at that time, but he did give Mary $500 in return for her promise to keep her offer open for three (3) weeks. Mike returned with the agreed-upon balance two weeks later to find that Mary already had sold the pieces she had offered to sell to him. Mary explained that she had been able to get a better price from another buyer. She offered to return Mike's $500 and insisted that this was all she was obligated to do. Is Mary right?
Answer: She is not.
Explanation:
It would seem as though that Mary got into a type of contract known as an Option Contract or more precisely, a Call Option Contract simply called a Call.
In this type on contract, a seller gives a buyer the right to buy a good or service at a certain price within a set period.
Mary agreed to sell the rare Chinese Art for a certain amount which Mike could not pay but she promised to give him 3 weeks to take it within which he can pay and collect the item.
Mike returned in 2 weeks which was within the range of time allowed and so she should have kept the offer open for the time she said she would.
She is wrong to believe that all she owes him is his down payment. She broke a contract.
In a situation of neither input nor output fixed, the proper economic criterion is to _________________. A. Maximize the output B. Minimize the inputs C. Minimize (inputs - outputs) D. Maximize (outputs - inputs)
Answer:
D. Maximize (outputs - inputs)
Explanation:
The input is the raw material, labor, the efforts that is used in making the product while the output is the product or the result arising from the input
The profit arises when output and the input varies from each other
i.e
Profit = Output - input
In the case where there is neither an input nor output fixed, so we have to maximize the profit i.e (output - input) but the condition is that they are different from each other
Hence, the correct option is D.
Break-Even Sales Currently, the unit selling price of a product is $280, the unit variable cost is $230, and the total fixed costs are $560,000. A proposal is being evaluated to increase the unit selling price to $310. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
Answer:
a.
Break even in units sales = 11200 units
b.
Break even in units sales = 7000 units
Explanation:
Break even sales in units is the number of units needed to be sold in order for the company to reach a point where it covers all of its total cost with its total revenue and break evens. It is a point of no profit and no loss and the total revenue is equal to the total costs.
The formula to calculate break even in units is,
Break even in units = Fixed cost / Contribution margin per unit
Where, contribution margin per unit = Selling price per unit - Variable cost per unit
a.
Break even in units = 560000 / (280 - 230)
Break even in units = 11200 units
b.
Anticipated Break even in units = 560000 / (310 - 230)
Anticipated Break even in units = 7000 units
The following questions are based on this problem and accompanying Excel windows. Jack's distillery blends scotches for local bars and saloons. One of his customers has requested a special blend of scotch targeted as a bar scotch. The customer wants the blend to involve two scotch products, call them A and B. Product A is a higher quality scotch while product B is a cheaper brand. The customer wants to make the claim the blend is closer to high quality than the alternative. The customer wants 50 1500 ml bottles of the blend. Each bottle must contain at least 48% of Product A and at least 500 ml of B. The customer also specified that the blend have an alcohol content of at least 85%. Product A contains 95% alcohol while product B contains 78%. The blend is sold for $12.50 per bottle. Product A costs $7 per liter and product B costs $3 per liter. The company wants to determine the blend that will meet the customer's requirements and maximize profit
Answer:
The blend should be made with 720 ml of Product A and 780 ml of Product B
Explanation:
We create excel solve to get the cheapest blend with the requirement givens by the customer:
A B C D E F
1 ml type $ alcohol $mix alcohol mix
2 720 Product A 7 0.95 5.04 0.456
3 780 Product B 3 0.78 2.34 0.4056
4 Total 7.38 0.8616
5 Sales Price 12.50
6 Gross Profit 5.12
Constrains:
A2 = integer
A2 > 1500 x 48/100
A3 > 500
F4 > 0.85
Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 490 $ 2.49 Apr. 20 Purchase 410 2.72 Dunbar sold 600 units of inventory during the month. Ending inventory assuming FIFO would be
Answer:
$816
Explanation:
Calculation for Dunbar Incorporated Ending inventory
Formula for Ending inventory units using FIFO method:
Ending inventory units = Beginning balance + Purchase -sales
Leg plug in the formula
490+410 - 600
= 300units
Calculation for Ending inventory
Ending inventory = 300*2.72
= $816
Therefore the Ending inventory assuming FIFO method is use would be $816
6. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. Funds spent by city governments to renovate their buildings The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government The costs of air and water pollution The variety of goods available to consumers When a U.S. company purchases and imports automotive parts from Canada to use to build cars within the United States, this purchase increases the component of GDP while also net exports by the same amount. Therefore, the purchase of automotive parts from Canada causes in US GDP.
Answer:
The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
The costs of air and water pollution
The variety of goods available to consumers
It increases investment spending by businesses
Decreasing net export
No change
Explanation:
Gross domestic product is the sum of the goods and services produced in an economy within a given period which is usually a year.
Gross domestic product calculated using the expenditure approach = Consumption spending + Investment spending + net export + government spending
Items not included in the calculation of GDP:
1. Intermediate goods
2. Externalities e.g. pollution
3. Measures of welfare available to individuals
4. Transactions not reported to the government.
Funds spent by city governments to renovate their buildings are included in GDP as part of investment spending.
Purchase of automative parts would be included in GDP as part of investment spending. So investment spending would rise. Also, it would be recorded as an import and import is a negative function of GDP and thus net export would decrease . As a result, the increase in investment spending would be offset by the decrease in net export and there would be no change in GDP
I hope my answer helps you
Hurricane Industries had a net income of $141,150 and paid 35 percent of this amount to shareholders in dividends. During the year, the company sold $87,750 in new common stock. What was the company's cash flow to stockholders?
Answer:
$38,347
Explanation:
Calculation for Hurricane Industries cash flow to stockholders
Formula for Cash flow to stockholders:
Cash flow to stockholders = Dividends paid - Net new equity raised
Let plug in the formula
Where:
Dividends paid =$141,150
Net new equity raised=$87,750
Hence:
Dividends = $141,150 * .35= $49,403
New net equity = $87,750
Cash flow to stockholders = $87,750-$49,403
= $38,347
Therefore the company's cash flow to stockholders will be $38,347
Valuable Incorporated's stock currently sells for $45 per share. The firm has 20 million share of common outstanding. The firm's total debt equals $600 million and its common equity equals $400 million. What is the firm's market value added
Answer:
The firm's market value added is $500,000,000
Explanation:
According to the given data we have the following:
Stock market price per share= $ 45
No of shares= 20,000,000
Therefore, Market value of equity = MPS * no of shares
$45*20,000,000= $ 900,000,000
Invested capital or common equity = $400,000,000
Therefore, in order to calculate the firm's market value added we would have to make the following calculation:
Market value added = Market value of stock - invested capital
Market value added =$900,000,000 -$400,000,000
Market value added =$500,000,000
The firm's market value added is $500,000,000
On November 1, Bahama National Bank lends $3.8 million and accepts a six-month, 6% note receivable. Interest is due at maturity. Record the acceptance of the note and the appropriate adjustment for interest revenue at December 31, the end of the reporting period. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)
Answer and Explanation:
The journal entries are shown below:
a. Note receivable Dr $3,800,000
To Cash $3,800,000
(Being the acceptance of the note is recorded)
For recording this we debited the note receivable as it increased the assets and credited the cash as it decreased the liabilities
b. Interest receivable Dr $38,000
To Interest revenue $38,000
(Being the interest revenue is recorded)
For recording this we debited the interest receivable as it increased the assets and credited the interest revenue as it increased the revenue
The computation is shown below:
= $3,800,000 × 6% × 2 months ÷ 12 months
= $38,000
,
An inexperienced accountant for Grouper Corp. showed the following in the income statement: income before income taxes $448,000 and unrealized gain on available-for-sale securities (before taxes) $89,000. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 29% tax rate. Prepare a correct statement of comprehensive income.
MONTY CORP.Partial Statement of Comprehensive IncomeSelect a comprehensive income itemDividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseOther Comprehensive IncomeUnrealized Holding Gain on Available-for-Sale SecuritiesIncome Before Income TaxesComprehensive Income$Enter a dollar amountSelect a comprehensive income itemDividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseOther Comprehensive IncomeUnrealized Holding Gain on Available-for-Sale SecuritiesIncome Before Income TaxesComprehensive IncomeEnter a dollar amount
Select a summarizing line for the first partDividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseOther Comprehensive IncomeUnrealized Holding Gain on Available-for-Sale SecuritiesIncome Before Income TaxesComprehensive IncomeEnter a total of the two previous amountsSelect an opening section nameDividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseOther Comprehensive IncomeUnrealized Holding Gain on Available-for-Sale SecuritiesIncome Before Income TaxesComprehensive IncomeSelect a comprehensive income itemDividends Expenses Net Income / (Loss) Retained Earnings Revenue Total Expenses Total Revenues Income Tax Expense Other Comprehensive Income Unrealized Holding Gain on Available-for-Sale Securities Income Before Income Taxes Comprehensive Income Enter a dollar amountSelect a closing name for this statementDividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseOther Comprehensive IncomeUnrealized Holding Gain on Available-for-Sale SecuritiesIncome Before Income TaxesComprehensive Income$Enter a total amount for this statement
Answer: The answer is provided below
Explanation:
The explanation has been attached.
It should be noted that:
Income tax expense = $448,000 × 29%
= $448,000 × 29/100
= $448,000 × 0.29
= $129,920
Other comprehensive income will be the unrealized holding gain on the security which will be:
= $89,000 × (100% - 29%)
= $89,000 × 71%
= $89,000 × 0.71
= $63,190
Further explanation has been attached.
Which of the following statements is correct?a. The cost of new equity (re) could possibly be lower than the cost of retained earnings (rs) if the market risk premium, risk-free rate, and the company's beta all decline by a sufficiently large amount.b. The component cost of preferred stock is expressed as rp(1 - T), because preferred stock dividends are treated as fixed charges, similar to the treatment of interest on debt.c. Its cost of retained earnings is the rate of return shareholders require on a firm's common stock.d. We should use historical measures of the component costs from prior financing when estimating a company's WACC for capital budgeting purposes.
Answer:
c. Its cost of retained earnings is the rate of return shareholders require on a firm's common stock.
Explanation:
The formula to compute the cost of retained earning is as follows
Cost of retained earning = (Expected annual dividend ÷ Price of the stock) + growth rate
It is the rate of return that equates with the cost of equity plus it also earns on the investment done in the company i.e equity
In a mathematical expression,
Cost of retained earnings = Cost of equity
hence, the correct option is c.
Why is research ethics important?
Answer:
Research ethics are important for the following reasons:
1.They promote the aims of research, such as expanding knowledge.
2.They support the values required for collaborative work
3. They support important social and moral values,
Analyzing Accounts Receivable Changes The comparative balance sheets of Sloan Company reveal that accounts receivable (before deducting allowances) increased by $15,000 in 2013. During the same time period, the allowance for uncollectible accounts increased by $2,100. If sales revenue was $120,000 in 2013 and bad debts expense was 2.5% of sales, how much cash was collected from customers during the year?
Answer:
Cash was collected from customers during the year was $ 104,100
Explanation:
Sales revenue = $120,000
Bad debt expense = 2.5% of sales
Therefore, Bad debt expense = $120,000 x 2.5% = $3,000
Thus, allowance for uncollectible accounts should have increased by $3,000. But it increased by $2,100.
Therefore, uncollectible accounts receivable of $900 ($3,000 - $2,100) were written off during that year.
Cash collected from customers = Sales revenue - Increase in accounts receivable - Uncollectible accounts written off
= $120,000 - $15,000 - $900
= $104,100