Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work Tom does. If he works 40 hours each week, the company's EBIT will be $615,000 per year; if he works a 50 hour week, the company's EBIT will be $755,000 per year. The company is currently worth $3.85 million. The company needs a cash infusion of $1.95 million, and it can issue equity or issue debt with an interest rate of 7 percent. Assume there are no corporate taxes.
What are the cash flows to Tom under each scenario?

Answers

Answer 1

Answer:

Please see answer as attached.

Explanation:

a. What are the cash flows to Tom under each scenario.

•Cash flow under scenario 1.

40 hour week cash flow $478,500

50 hour week Cash flow $618,500

Total ownership percentage 66.38%

•Scenario 2.

40 week cash flow $408,237

50 week cash flow $501,169

Please find attached detailed computation of the above solution.

Tom Scott Is The Owner, President, And Primary Salesperson For Scott Manufacturing. Because Of This,

Related Questions

Trade Mart has recently had lackluster sales. The rate of inventory turnover has​ dropped, and the merchandise is gathering dust. At the same​ time, competition has forced ​'s suppliers to lower the prices that will pay when it replaces its inventory. It is now December​ 31, ​, and the net realizable value of ​'s ending inventory is below what the company actually paid for the​ goods, which was . Before any adjustments at the end of the​ period, the Cost of Goods Sold account has a balance of . Read the requirementsLOADING.... Requirement a. What accounting action should take in this​ situation? should apply the ▼ average-cost method first in, first out method last in, first out method lower-of-cost-or-market rule to account for inventories. The net realizable value of ending inventory is ▼ equal to less than more than ​'s actual​ cost, so must write the inventory ▼ down up to net realizable value.

Answers

Answer:

the numbers are missing, so i looked for a similar question to fill in the blanks:

Trade Mart has recently had lackluster sales. The rate of inventory turnover has? dropped, and the merchandise is gathering dust. At the same time, competition has forced Trade Mart's suppliers to lower the prices that Trade Mart will pay when it replaces its inventory. It is now December 31, 2016, and the current replacement cost Trade Mart's ending inventory is $75,000 below what Trade Mart actually paid for the goods, which was $200,000.

Before any adjustments at the end of the? period, the Cost of Goods Sold account has a balance of $$820,000.

a. What accounting action should take in this​ situation?

lower-of-cost-or-market rule to account for inventories.

the adjustment entry should be:

Dr Cost of goods sold 75,000

    Cr Inventory 75,000

b. The net realizable value of ending inventory is?

equal to actual cost, so must write down inventory to match net realizable value

Ending inventory = $200,000 - $75,000 = $125,000

Casino Inc. expects to pay a dividend of $6 per share at the end of year 1 (Div1) and these dividends are expected to grow at a constant rate of 6 percent per year forever. If the required rate of return on the stock is 20 percent, what is the current value of the stock today?

Answers

Answer:

The current value of the stock today is $42.90

Explanation:

P1 = $6 / 0.20 - 0.06

P1 = $6 / 0.14

P1 = $42.8571

P1 = $42.90

Regency Inn leased a rental office in the lobby of its hotel to Americar, a car rental agency. Wagner rented a car from Americar, and while walking through the hotel parking lot to reach her rental car, she was robbed and raped. Wagner sued Regency Inn for damages, alleging that they maintained a public nuisance. A clause in the lease held that Americar was responsible to indemnify Regency Inn for any damages suffered due to the operation of the car rental agency. At the time of the assault on Wagner, Americar was a holdover tenant.
Can Regency Inn claim indemnification under these conditions? Wagner v. Regency Inn Corp., 463 N.W.2d 450 (1990).

Answers

Answer:

The court ruled against both Americar and Regency Inn, and then Regency Inn won its case against Americar. The nuisance case itself is pretty unpleasant, so it's not worth referring to it.

The fundamentals for the ruling against Americar were that they themselves had drafted the lease agreement and that the clause included in the lease agreement by which they agreed to indemnify Regency Inn was valid. The original lease term had already expired, but Americar continued to lease the offices on a monthly basis. Since they never left the place, the clauses in the original agreement were still valid even though the lease changed to a monthly basis. I.e. if you sign a lease contract and after the original contract is over, you continue to lease the same place, then the clauses from the original contract still apply.

The clause stated that Americar was liable for damages that took place on the leased premises or in their proximity, i.e. the area near their offices. The parking lot was considered to be in the proximity of Americar's offices.

What type of competition stems from new products, new processes, new markets, and new forms of business organization

Answers

Answer: Creative destruction

Explanation:

Creative destruction, just like the name suggest is used to refer to the creation of new products and processes. Or an innovative mechanism by which new production units are produced. this are used to replace outdated or obsolete ones. This usually results in the production of new products, process, and markets.


If a specific economy has extra capital resources available,
be able to produce top-quality goods and services.
continually look to expand and invest.
be able to produce more goods and services needed and wanted by society.
have additional labor available to focus on production.
this

Answers

Answer: A

Be able to produce top-quality goods and services

If a specific economy has extra capital resources available, be able to produce more goods and services needed and wanted by society.

What is an economy?

An economy is a region where products and services are produced, distributed, traded, and consumed. It is generally understood to be a social domain that places an emphasis on the behaviors, discourses, and tangible manifestations connected to the creation, utilization, and management of finite resources.

One's culture, values, education, technological advancement, history, social organization, political structure, legal system, and natural resources are all major determinants of an economy's processes.

These elements determine the parameters and conditions under which an economy operates in addition to providing background and content. In other words, the economic realm is a social domain made up of connected human behaviors and exchanges that cannot exist independently.

Individuals, companies, organizations, or governments all qualify as economic actors. When two persons or organizations agree on the value or price of the good or service being exchanged, which is typically stated in a particular currency, an economic transaction takes place.

Learn more about economy, here

https://brainly.com/question/2421251

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Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000 and qualified business income of $10,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $3,550 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may only claim the child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.)
Comprehensive Problem 4-55 Parts-c through f
a. What would their taxable income be if their itemized deductions totaled $28,000 instead of $16,500?
b. What would their taxable income be if they had $0 itemized deductions and $6,000 of for AGI deductions?
c. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income?

Answers

Answer:

a. Taxable income = $80,000

b. Taxable income = $77,600

c. Taxable income = $80,600

Explanation:

Taxable income refers to the amount of income that is used to determine the amount of tax that will be paid to the government by an individual or firm in given year. The taxable income is arrived at after all the relevant addition and allowable deductions have been made.

The requirements are therefore answered as follows:

a. What would their taxable income be if their itemized deductions totaled $28,000 instead of $16,500?

Note: See part a of the attached excel file see the effect on taxable income.

The itemized deductions total of $28,000 instead of $16,500 makes the taxable income to be $80,000.

In the attached excel file, the following calculations is used:

Qualified business income deduction = Qualified business income * Parentage of deduction allowed = $10,000 * 20% = $2,000

b. What would their taxable income be if they had $0 itemized deductions and $6,000 of for AGI deductions?

Note: See part b of the attached excel file for the calculations of the taxable income.

This makes the taxable income to be equal to $77,600.

c. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income?

Note: See part c of the attached excel file for the calculations of the taxable income.

The loss of loss of $5,000 on the sale of some of their investment assets incurred by the Jacksons is capital loss.

For tax purposes, capital loss of can be deducted as a loss on tax return by tax payers with a maximum of $3,000 to be deducted per year.

Therefore, the Jacksons will deduct $3,000 as a capital loss from their tax return, and the effect of this is to reduce the taxable income by $3,000.

This makes the taxable income to be equal to $80,600.

Type the correct answer in the box. Spell all words correcty.
George has to present the goals of information management to his team member. What is a goal of Information management?
The goal of Information management is to identify information requirements for various what levels

Answers

Answer and Explanation:

The information management refers to manage the information in effecetive and efficient manner. It could be in terms of storing, organizing, developing, using, distributing the information so that it became useful for the organization

Here, the goal of information management is to identify the requirement of the information for various management levels so that it can be used in appropriate manner.

Answer:

The answer is: management

Question 6 of 10
Which economic tool would most likely be used as part of a contractionary
monetary policy?
A. Lowering interest on reserves
B. Reducing the discount rate
C. Raising the reserve requirement
D. Buying treasury securities

Answers

Answer:

C. Raising the reserve requirement

Explanation:

Contractionary monetary policy refers to the Fed's action of reducing money supply in the economy. Reducing the money supply slows down the economy, thereby countering expansion and inflationary pressures. Raising the reserve requirement is one tool that the Fed uses as a contractionary monetary policy.

Reserve requirements refer to the percentage of customer deposits that the Fed requires commercial banks to maintain at all times. An increase in reserve requirement decreases the money available for banks to lend out. Reduced lending means a decrease in the money supply, which results in a decline in the inflation rate.

B.Reducing the discount rate

Re-Tire produces bagged mulch made from recycled tires. Production involves shredding tires and packaging the pieces for sale in the bagging department. All direct materials enter in the first process. The following describes production operations for October.

Direct materials used $226,000
Direct labor used 30% in Shredding; 70% in Bagging. $112,000
Predetermined overhead rate (based on direct labor) 165 %
Transferred to Bagging $206,500
Transferred to finished goods $583,000

The company's revenue for the month totaled $470,000 from credit sales, and its cost of goods sold for the month is $240,000.

Required:
Prepare summary journal entries dated October 31 to record its October production activities for:

a. Direct materials usage
b. Direct labor incurred
c. Overhead applied
d. Goods transfer from Shredding to Bagging.
e. Goods transfer from Bagging to finished goods.
f. Credit sales
g. Cost of goods sold.

Answers

Answer:

a.

Work In Process : Direct Materials $226,000 (debit)

Raw Materials $226,000 (credit)

Direct Materials used in production

b.

Work In Process : Shredding $33,600 (debit)

Work In Process : Bagging $78,400 (debit)

Salaries Payable $112,000 (credit)

Direct labor incurred during production

c.

Work In Process : Shredding $55,440 (debit)

Work In Process : $129,360 Bagging

Overheads $184,800 (credit)

Overheads applied to production cost

d.

Work In Process : Bagging $206,500 (debit)

Work In Process : Shredding $206,500 (credit)

Manufacturing costs transferred from Shredding to Bagging

e.

Work In Process : Shredding $583,000 (debit)

Finished Goods $583,000 (credit)

Manufacturing Costs  transfer from Bagging to finished goods

f.

Account Receivable $470,000 (debit)

Sales Revenue $470,000 (credit)

Credit Sales during the month

g.

Cost of Goods Sold $240,000 (debit)

Finished Goods $240,000 (credit)

Cost of Goods Sold during the month

Explanation:

See the Journal entries and their narrations prepared above

Dom has $90,000 that he wishes to invest now in order to use the accumulation for purchasing a retirement annuity in five years. After consulting with his financial advisor, he has been offered four types of fixed-income investments, labeled as investments A, B, C, and D.
Investments A and B are available at the beginning of each of the next five years (call them years 1–5). Each dollar invested in A at the beginning of a year returns $1.20 (a profit of $0.20) two years later, in time for immediate reinvestment. Each dollar invested in B at the beginning of a year returns $1.36 three years later.
Investments C and D will each be available just once in the future. Each dollar invested in C at the beginning of year 2 returns $1.66 at the end of year 5. Each dollar invested in D at the beginning of year 5 returns $1.12 at the end of year 5.
Your uncle is obligated to make a balloon payment on an existing loan in the amount of $24,000 at the end of year 3. He wants to make that payment out of the investment account.
1) Devise an investment plan for your uncle that maximizes the value of the investment account at the end of five years. How much money will be available for the annuity in five years?
2) Show the network diagram corresponding to the solution in (1). That is, label each of the arcs in the solution and verify that the flows are consistent with the given information.

Answers

Answer:

First of all, you must invest enough money in B in order to pay your debt.

present value = future value / expected return

present value = $24,000 / $1.36 = $17,647.06

you have $90,000 - $17,647.06 = $72,352.94 to invest in A.

at the end of year 2, you will have:

future value = present value x expected return = $72,352.94 x $1.20 = $86,823.53

then you should invest that money ($86,823.53) in invested D and at the end of year 4 you will have:

future value = $86,823.53 x $1.66 = $144,127.06

finally, you should invest $144,127.06 in investment E and at the end of ear 5 you will have:

future value = $144,127.06 x $1.12 = $161,422.31

2) it is really hard to draw a diagram without drawing tools, but i will try

              ⇒ invest $17,647.06  in B      ⇒ year 3, collect $24,000

                                                                  from B and pay off debt

today

$90,000  

              ⇒ invest $72,352.94     ⇒ year 2, invest         ⇒ year 4, invest

                  in A                                  $86,823.53  in D        $144,127.06  in E

continues ...  ⇒ year 5, collect $161,422.31  from E

Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,700 hours.



1 Variable costs:
2 Indirect factory wages $40,020.00
3 Power and light 20,880.00
4 Indirect materials 17,400.00
5 Total variable cost $78,300.00

6 Fixed costs:
7 Supervisory salaries $19,800.00
8 Depreciation of plant and equipment 35,700.00
9 Insurance and property taxes 18,450.00
10 Total fixed cost 73,950.00
11 Total factory overhead cost $152,250.00

During May, the department operated at 9,080 hours, and the factory overhead costs incurred were indirect factory wages, $42,268; power and light, $22,064; indirect materials, $18,700; supervisory salaries, $19,800; depreciation of plant and equipment, $35,700; and insurance and property taxes, $18,450.

Required:
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 hours.

Answers

Answer:

Tiger Equipment Inc.

Factory Overhead Cost Variance Report    

1 Variable costs:                                             Actual         Flexible   Variance

2 Indirect factory wages                         $42,268.00     $41,768    500.00 U

3 Power and light                                      22,064.00       21,792    272.00 U

4 Indirect materials                                    18,700.00        18,160    540.00 U

5 Total variable cost                               $83,032.00    $81,720   1,312.00 U

6 Fixed costs:

7 Supervisory salaries                            $19,800.00     $19,800     $0  None

8 Depreciation of plant and equipment 35,700.00       35,700     $0  None

9 Insurance and property taxes              18,450.00       18,450      $0  None

10 Total fixed cost                                    73,950.00      73,950     $0  None

11 Total factory overhead cost            $156,982.00  $155,670  $1,312 U

Explanation:

Welding Department's

Factory Overhead Cost Budget

For the month of May:

1 Variable costs:

2 Indirect factory wages                        $40,020.00

3 Power and light                                     20,880.00

4 Indirect materials                                   17,400.00

5 Total variable cost                              $78,300.00

6 Fixed costs:

7 Supervisory salaries                            $19,800.00

8 Depreciation of plant and equipment 35,700.00

9 Insurance and property taxes              18,450.00

10 Total fixed cost                                   73,950.00

11 Total factory overhead cost           $152,250.00

b) Flexing the variable cost:

1 Variable costs:                                                            Flexible

2 Indirect factory wages         $40,020/8,700 * 9,080 = $41,768

3 Power and light                     20,880 /8,700 * 9,080 =  $21,792

4 Indirect materials                    17,400/8,700 * 9,080 =  $18,160

5 Total variable cost                $78,300/8,700 * 9,080 = $81,720

g you are eligible for a 30 year fixed rate home mortgage with 3.6% interest rate what is the maximum loan you can get

Answers

Answer:

the maximum loan is $379,417

Explanation:

The computation of the maximum loan is shown below:

As we know that

Maximum Loan = Present Value of all monthly Payments

=  $1,725 × PVAF(0.3%,360 months)

= $1,725 × [1- (1+0.003)^-360] ÷ 0.003

= $1,725 × 219.9517

=  $379,417

hence, the maximum loan is $379,417

Here the interest rate is divided by 12 and the months should be multiplied by 12 as this is the case of monthly basis

Answer:

money

Explanation:

You are considering four hotels that differ from each other with respect to their price and customer reviews:

Answers

Answer: H4

Explanation:

Looking at the reviews given per price, a conclusion can be made that the higher the price of staying in the hotel, the higher the ratings given which would imply that the hotels charging higher, have better amenities.

This does not hold for H4 however as they are charging more than H1 but still getting the same reviews as them.

This could either mean that H1 is efficient enough to be getting the same rating for the same price as H4 or that H4 is inefficient such that they are not utilizing their amenities enough to get a higher rating than H1 who they should be better than.

Either scenario point to inefficiency on H4's part.

Brett, the manager at Warson’s Diner, plans to promote Keisha, one of the waitresses, to the position of an assistant manager. However, the owner, being racially biased, prevents him from doing so. Later, when Brett wants to promote one of the delivery boys to waiter, the owner again vetoes his recommendation on the grounds that his customers would feel uncomfortable having a black man deliver their food. Brett, extremely frustrated, offers Keisha and the delivery boy their promotions as he finds them deserving. Subsequently, Brett gets fired. Which of the following holds true in this scenario?

a. Brett has a cause of action against Warson’s Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
b. Brett has a cause of action against Warson’s Diner based on the bona fide occupational qualification defense.
c. Brett is liable for racial discrimination because as a manager he failed to change the company’s policy regarding promotion of African-Americans.
d. Brett is liable because he failed to follow the instructions provided by his employer.

Answers

Answer:

a)Brett has a cause of action against Warson's Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.

Explanation:

From the question, we are informed about Brett, the manager at Warson’s Diner, who plans to promote Keisha, one of the waitresses, to the position of an assistant manager. We are also told that the owner, being racially biased, prevents him from doing so and in the end , Brett gets fired

What holds true in this scenario described above is that Brett has a cause of action against Warson's Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.

Title VII of the Civil Rights Act of 1964. Is a law, of Act of 1964 that oversee any form of discrimination against employee of an organization and shield them from been discriminated because of race they belong to, their sex , their National origin an so on . The law doesn't only forbid discrimination that is intentional, but all actions that speak discrimination wether intentional or not.

Assume a par value of $1,000. Caspian Sea plans to issue a 9.00 year, semi-annual pay bond that has a coupon rate of 8.04%. If the yield to maturity for the bond is 7.79%, what will the price of the bond be

Answers

Answer:

$1,015.96

Explanation:

The Price of the Bond (PV) can be calculated as follows :

Fv = $1,000

Pmt = ($1,000 × 8.04%) ÷ 2 = $40.20

n = 9 × 2 = 18

p/yr = 2

i = 7.79%

pv = ?

Using a financial calculator to input the values as shown above, the Price of the Bond (PV) is $1,015.96

Del Gato Clinic's cash account shows a $11,589 debit balance and its bank statement shows $10,555 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $1,829. The June 30 bank statement lists a $16 bank service charge. Check No. 919, listed with the canceled checks, was correctly drawn for $467 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $476. The June 30 cash receipts of $2,856 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.
Prepare its bank reconciliation using the above information.
DEL GATO CLINIC
Bank Reconciliation
June 30
Book balance
Add: Bank statement balance
Add:
Deduct: Deduct:
Adjusted bank balance Adjusted book balance

Answers

Answer:

Bank Reconciliation

Bank Statement Balance                                    10,555

Add: June 30 Deposit                                          2,856

                                                                              13,411

Less: Outstanding Checks                                 (1,829)

Adjusted bank balance                                     $11,582

Bank Reconciliation

Book Balance                                                            11,589

Add: Error in Check 919 (479 - 467)                                 9

                                                                                   11,598

Less: Bank service charge                                        (    16)

Adjusted book balance                                            11,582

Mirr, Inc. was incorporated on January 1, year 1, with proceeds from the issuance of $750,000 in stock and borrowed funds of $110,000. During the first year of operations, revenues from sales and consulting amounted to $82,000, and operating costs and expenses totaled $64,000. On December 15, Mirr declared a $3,000 cash dividend, payable to stockholders on January 15, year 2. No additional activities affected owners' equity in year 1. Mirr's liabilities increased to $120,000 by December 31, year 1. On Mirr's December 31, year 1 balance sheet, total assets should be reported at:_______

Answers

Answer:

$885,000

Explanation:

Calculation for the total assets should be reported

Using this formula

TOTAL ASSETS =Total of liabilities + Total stockholders' equity

Initial equity $750,000

Income $18,000

($82,000-$64,000)

Dividends ($3,000)

12/31 Total stockholders' equity $765,000

Add Liabilities of $120,000

Total ASSETS $885,000

Therefore On Mirr's December 31, year 1 balance sheet, total assets should be reported at $885,000

Statz Company had sales of $1,900,000 and related cost of goods sold of $1,100,000 for its first year of operations ending December 31, 20Y1. Statz provides customers a refund for any returned or damaged merchandise. At the end of 20Y1, Statz Company estimates that customers will request refunds for 1.7% of sales and estimates that merchandise costing $12,000 will be returned. Assume that on February 3, 20Y2, Buck Co. returned merchandise with an invoice amount of $5,300 for a cash refund. The returned merchandise originally cost Statz Company $3,200.

Required:
a. Journalize the adjusting entries on December 31 to record the expected customer returns.
b. Journalize the entries to record the returned merchandise and cash refund to Buck Co. on February 3.

Answers

Answer:

pasensya na di ko alam ang sagot

Question 3
20 pts
Solve the problem
A normal distribution has a limited range and can be skewed in either direction.
True
0 False
Next >

Answers

The answer is false....
The answer is false

Major improvements in computer information technology in the 1990s fueled an increase in investment demand in the United States (a large open economy). Graphically illustrate the effect of an increase of U.S. investment using the Large Open Economy Model. Clearly label the axes and curves in each of your graphs in the model. Clearly indicate the direction of any shifts in the curves.

Answers

Answer and Explanation:

Please find attached

Suppose the following data were taken from the 2017 and 2016 financial statements of American Eagle Outfitters. (All numbers, including share data, are in thousands.)
2017 2016
Current assets $ 890,400 $999,600
Total assets 1,950,000 1,878,000
Current liabilities 424,000 357,000
Total liabilities 573,300 552,132
Net income 166,830 337,600
Net cash provided by operating activities 300,000 452,600
Capital expenditures 271,000 246,500
Dividends paid on common stock 85,000 76,500
Weighted-average shares outstanding 201,000 211,000
a. Calculate the current ratio for each year. (Round answers to 2 decimal places, e.g. 15.25.)
2017 2016
Current ratio
b. Calculate earnings per share for each year. (Round answers to 2 decimal places, e.g. 15.25.)
2017 2016
Earnings per share $
c. Calculate the debt to assets ratio for each year. (Round answers to 1 decimal place, e.g. 29.5%)
2017 2016
Debt to assets ratio
d. Calculate the free cash flow for each year. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).)
2017 2016
Free cash flow

Answers

Answer:

Please see below

Explanation:

a. Current ratio

= Total current asset / Total current liabilities

2017

Current asset. 890,400

Current liabilities 424,000

Current ratio = 890,400/424,000

= 2.1

2016 Current ratio

Current asset. 999,600

Current liabilities 357,000

Current ratio = 999,600/357,000

= 2.8

b. Earnings per share

= (Net income - Preference dividend) / Weighted average number of shares outstanding

2017

Net income. 166,830

Weighted Average number of shares outstanding 201,000

Earnings per share = $166,830/201,000

= $0.83

2016 Earnings per share

Net income $337,600

Weighted Average number of shares outstanding 211,000

Earnings per share = $337,600/211,000

= $1.6

c. Debt to asset ratio

= Total liabilities / Total assets

2017

Total liabilities 573,300

Total assets 1,950,000

= 573,300/1,950,000

= 0.29

2016 Debt to asset ratio

Total liabilities 552,132

Total assets 1,878,000

Debt to asset ratio = 552,132/1,878,000

= 0.29

d. Free cash flow

2017

Cash flow from operating activities 300,000

Less: capital expenditure (271,000)

Free cash flow 29,000

2016 free Cash flow from operating activities

Free cash flow 452,600

Less: capital expenditure (246,500)

Free cash flow. 206,100

All of the following are threats to a sustainable, long-term competitive advantage EXCEPT ________. Group of answer choices

Answers

Answer:

The answer is "market stability".

Explanation:

Instability, emerging innovations as well as an evolving industry also will function and eradicate the advantages so, the corporation does and put its competitiveness as the advantage at risk.

"Market stability" is the only choice, which is not a hazard to a fixed edge. So, well as circumstances wouldn't change, its edge will appear to become the right response.

Farley Inc. has perpetual preferred stock outstanding that sells for $50 a share and pays a dividend of $5.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

Answers

Answer:

10%

Explanation:

The Required Rate of return is the minimum acceptable return on investment sought by individuals or companies considering an investment opportunity.

Dividend = $5

Market price = $50

Required rate of return = Dividend / Market price

Required rate of return = 5/50*100

Required rate of return = 10%

If the college strictly enforces the rent ceiling of ​$250 a​ month, the​ on-campus housing market is​

Answers

Answer: B. inefficient; the rent ceiling has no effect on the number of rooms rented

Explanation:

If the college strictly enforces the rent ceiling of ​$250 a​ month, the​ on-campus housing market is​ inefficient because the rent ceiling has no effect on the number of rooms rented.

An efficient market will see equilibrium supply meting equilibrium demand and this is not the case in this market because the supply seems to stay the same regardless of the demand.

This market is inefficient because supply does not react to the rent paid and is always the same. This is why a rent ceiling of $250 had no effect on the market in terms of supply. Efficient markets should see both supply and demand reacting to price so that a mutually beneficial equilibrium can be reached.

leased the asset on a 2-year lease, the payment would be $110 at the begin- ning of each year. If RC borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should RC lease or buy the equipment?

Answers

Answer:

you should purchase the asset using a bank loan

Explanation:

in order to compare both options, we need to determine the present value of each alternative:

present value of lease costs:

cash flow year 0 = $110

cash flow year 1 = $110

PV = $110 + $110/1.1 = $110 + $100 = $210

present value of purchasing the equipment:

cash flow year 0 = $0

cash flow year 1 = $115.24

cash flow year 2 = $115.24

PV = $200

if you consider the tax shield of leasing = ($220 - $200) x tax rate = $20 x 40% = $8

the tax shield of interest expense = ($230.48 - $200) x tax rate = $30.48 x 40% = $12.19

It doesn't matter how you analyze this, buying is a better and cheaper option. The problem with leasing is that you need to make an immediate payment, while if you borrow money, then the first payment is made in the future. The time value of money is different.

Consider each of the transactions below. All of the expenditures were made in cash.

a. The Edison Company spent $16,000 during the year for experimental purposes in connection with the development of a new product.
b. In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,500.
c. In March, the Cleanway Laundromat bought equipment. Cleanway paid $10,000 down and signed a noninterest-bearing note requiring the payment of $20,000 in nine months. The cash price for this equipment was $27,000.
d. On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $32,000.
e. The Mayer Company, plaintiff, paid $16,000 in legal fees in November, in connection with a successful infringement suit on its patent.
f. The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $11,200. The old equipment had an original cost of $9,400 and a book value of $4,200 at the time of the trade. Johnson also paid cash of $8,800 as part of the trade. The exchange has commercial substance.

Required:
Prepare journal entries to record each of the above transactions.

Answers

Answer: See attachment

Explanation:

The journals entry shows the transactions that Edison Company has undertaken. The transactions are shows both the debit and credit balances.

The attachments for the question have been attached for further analysis.

Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2021. Insight Machines manufactured the equipment at a cost of $350,000 and lists a cash selling price of $437,810. Appropriate adjusting entries are made quarterly.

Related Information:

Lease term 5 years (20 quarterly periods)
Quarterly lease payments $26,250 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter
Economic life of asset 5 years
Interest rate charged by the lessor 8%

Required:
a. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.
b. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.

Answers

Answer:

a. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.

we must first determine the present value of the lease payments:

PV of lease payments = quarterly payment x annuity factor

quarterly payment = $26,250PV annuity due factor, 2%, 20 periods = 16.67846

PV of lease payment = $26,250 x 16.67846 = $437,809.56 ≈ $437,810

January 1, 2021, equipment leased from Insight Machines

Dr Right of use asset 437,810

    Cr Lease payable 437,810

January 1, 2021, first lease payment

Dr Lease payable 26,250

    Cr Cash 26,250

March 31, 2021, second lease payment

Dr Lease payable 18,019

Dr Interest expense 8,231

    Cr Cash 26,250

interest expense = ($437,810 - $26,250) x 2% = $8,231

March 31, 2021, amortization expense

Dr Amortization expense 21,891

    Cr Right of use asset 21,891

amortization expense = $437,810 / 20 = $21,891

b. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.

January 1, 2021, equipment leased to Eye Deal

Dr Lease receivable 437,810

    Cr Lease revenue 437,810

Dr Cost of goods sold 350,000

    Cr Equipment 350,000

January 1, 2021, first lease payment

Dr Cash 26,250

    Cr lease receivable 26,250

March 31, 2021, second lease payment

Dr Cash 26,250

    Cr Lease receivable 18,019

    Cr Interest revenue 8,231

If bad debt expense for the year was $40,000, what was the amount of bad debts written off during the year?

Answers

Answer:

$32,000

Explanation:

The computation of the bad debt written off during the year is shown below:

= Opening balance of the allowance account + bad debt expense - required allowance

= $30,000 + $40,000 - $38,000

= $32,000

hence, the amount of bad debts written off during the year is $32,000

We simply applied the above formula so that the correct answer could come

Presented below are four statements which you are to identify as true or false.
1. GAAP is the term used to indicate the whole body of FASB authoritative literature.
2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
3. The primary governmental body that has influence over the FASB is the SEC.
4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.

Answers

Answer:

1. GAAP is the term used to indicate the whole body of FASB authoritative literature.  TRUE.

The Financial Accounting Standards Board are the authors of the GAAP and as such GAAP is used to indicate the whole body of their literature.

2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.  FALSE.

To claim compliance with GAAP, all standards and interpretations including Disclosure requirements should be followed.

3. The primary governmental body that has influence over the FASB is the SEC.  TRUE.

The Securities and Exchange Commission (SEC) is the Government body that is meant to oversee the application of Accounting standards and as such, they have influence over the FASB.

4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard. FALSE.

Even though they have a Government mandate, the FASB must follow due process when establishing principles so that people might be able to contribute to or criticize the guidelines should they please.

Deferred tax liability $ 355,000 $ 463,000 The income statement reported tax expense for Year 2 in the amount of $580,000. Required: 1. What was the amount of income taxes payable for Year 2

Answers

Answer: $472,000

Explanation:

Deferred Tax Liability arises as a result of the different accounting methods used by Companies and by the Government for taxation.

Deferred tax liabilities are taxes that are owed to the Government due to the company using the Accrual system but as the Government uses the Cash basis, they have not yet recognised this tax.

The Tax Payable in Year 2 is;

= Reported Tax Expense -  increase in Deferred Tax liability

= 580,000 - (463,000 - 355,000)

= $472,000

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