Question 1
PART 1 - There are a number of interesting differences between Sunbeam's 1997 and 1996 balance sheets (e.g., receivables increased by $82 million, inventories increased by $94 million, and pre-paid expenses decreased by $23 million, while long-term productive assets and liabilities remained relatively unchanged), and between its 1997 and 1996 income statements (e.g., during 1997 the company engaged in a number of "buy and hold" transactions, gross margin increased dramatically and SG&A declined). a. (maximum 7 points out of 13) - Adjust Sunbeam's 1997 Earning before interest and taxes for one-time events and apparent (e.g., doubtful accounts, depreciation expense, and etc.) changes in accounting policy. You may want to compute some comparative ratios to facilitate your analysis. Be sure to provide the details of and clearly label any computations. b. (maximum 4 points out of 13) - Utilizing your adjusted numbers from 1)a. (above) re-compute Sunbeam?s operating cash flows for 1997 (i.e., compute a new cash flows amount based on your adjustments to the original data). Clearly label the components of your computations. c. (maximum 2 points out of 13) - Summarize your findings in 1)a. and 1)b. (above), paying particular attention to any evidence of fraud (be careful not to let 20-20 hindsight ? i.e., information that you are aware of, but is not included in this case ? influence your conclusions). PART 2 ? (7 Points) You read in your text about the factors that Michael Porter identifies as influencing and directing competitive strategy. Required: a) (maximum 4 out of 7 points) identify each of those specific factors b) (maximum 3 out of 7 points) provide specific examples of accounting information that might be useful for assessing each factor. Be sure to explain (briefly) how each example might be used Please see attached document,Please see attached file to answer the questions I sent out earlier. I have made a deposit of $20.00. Thanks.,Has the assignment been accepted?
Question 2
The Article Critique assignment for this course is to investigate professional journals and locate four articles pertaining to Behavior in Organizations. You should locate one article for each of the following topics: 1. Group Dynamics 2. The use of power in an organization 3. Organizational culture 4. Job satisfaction You are to critique each of the four articles according to the instructions below: The format will be according to APA style (typed double-spaced) and in three parts. ? Part 1 of the critique is the identification of the article. What is important here is that you provide the reader with enough information about your article so he/she will be able to locate the article. ? Part 2 is a summary of the article. List the main points that the author has tried to establish, i.e., 1, 2, 3 or first, second, third. There normally will be 3 to 5 main points. ? Part 3 is your critique. You are to provide your reaction (insightful, critical, and logical) to the points that the author tried to make, or an overall critique of the entire article. A simple statement of agreement or disagreement is not sufficient. While you may make such a statement by way of introduction to your reaction, you must clearly and logically state the reasons for the post that you have taken. Length: There is no absolute minimum or maximum to the length of the article you read or the length of the paper you prepare, but the journal articles selected for critique should be professional in nature. Your resulting critique should be approximately 2-3 pages in length for each article (total project length will be approximately 8-10 pages). Compile all of your critiques in one document and include a properly formatted title and reference page.
Question 3
Adapted from Fundamentals of Futures and Options Markets, 8th ed., John C. Hull. Derivagem software (version 2.01) a lot, which is an Excel file included in the textbook CD-rom. If you don't have the CD-rom or have the older version 2.00, then you can download Derivagem (version 2.01) from http://www-2.rotman.utoronto.ca/~hull/software/ Chapter 11 To answer Q1 ? Q6, please provide graphs showing the relationship between the position profit (Y?axis) and the stock price at expiration (X?axis). Suppose the price of a non?dividend?paying stock is currently $50, its volatility is 25%, and the risk?free rate for all maturities is 4% per annum. All the options below expire in 4 months (=4/12 years). The option prices are not given here but you can use Derivagem to find the option prices. Choose ?Black?Scholes ? European? for Option Type in D17 cell. We will learn how to use Derivagem this week. You must include all the Derivagem outputs (6 total) in your Excel file by copying or taking a screenshot. Q1: A bull spread using European call options with strike prices of $45 and $50. (The call price for K=$45 option should be $6.38. If not, double check the parameters you used in Derivagem. See the attached screenshot of derivagem.) Q2: A bear spread using European put options with strike prices of $45 and $50. Q3: A butterfly spread using European call options with strike prices of $45, $50 and $55. Q4: A butterfly spread using European put options with strike prices of $45, $50 and $55. (Hint: The total profit graph should be identical to Q3.) Q5: A straddle using options with a strike price of $50. Q6: A strangle using options with strike prices of $50 and $55. Attached are templates that have been provided Q7 Use put?call parity to show that the cost of a butter?y spread created from European puts is identical to the cost of a butter?y spread created from European calls. Q8 A call with a strike price of $60 costs $6. A put with the same strike price and expiration date costs $4. Construct a table that shows the pro?t from a straddle. For what range of stock prices would the straddle lead to a loss?
Question 4
PART I ? MULTIPLE CHOICE (36 points) Instructions: Designate the best answer for each of the following questions. ____ 1. When a customer returns merchandise purchased on credit, the a. customer should credit Accounts Payable. b. seller should credit Sales Returns and Allowances. c. customer should credit Accounts Receivable. d. none of the above. ____ 2. Credit terms of 2/10, n/30 mean that a. a 10% cash discount may be taken if payment is made immediately; a 2% discount if paid within 30 days. b. a 2% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due at the end of the month. c. an additional amount equal to 2% of the invoice price must be paid if payment is not received within 10 days; the account is overdue after 30 days. d. a 2% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due within 30 days. ____ 3. A periodic inventory system a. allows for the determination of cost of goods sold after each sale. b. traditionally has been used with low unit-value items. c. requires that detailed inventory records be kept. d. requires the use of a cost of goods sold account. ____ 4. In accordance with the revenue recognition principle, sales revenues are recorded when a. earned, which typically occurs when the goods are transferred from the seller to the buyer. b. cash is received from the customer for items already delivered. c. an order is received from a customer with delivery of the product expected to take place within the next 30 days. d. the accountant determines which period's income statement "needs" more revenue. ____ 5. Expenses that relate to such activities as personnel management, accounting, and store security generally should appear in a multiple-step income statement in the a. Cost of Goods Sold section. b. Administrative Expenses section. c. Nonoperating section. d. Selling Expenses section. ____ 6. Which of the following accounts should appear in the Nonoperating section of a multiple-step income statement? a. Freight-out b. Sales Discounts c. Sales Returns and Allowances d. Interest Expense ____ 7. Freight terms of FOB shipping point mean that the a. buyer must bear the freight costs. b. seller must debit freight out. c. goods are placed free on board at the buyer's place of business. d. seller must bear the freight costs. ____ 8. With regard to accounting for a merchandising company versus a service enterprise, which of the following is false? a. Additional accounts and entries are typically required for a merchandising company. b. Both retail and wholesale enterprises generally use accounting techniques of a merchandising company. c. The process of measuring net income is conceptually different. d. There are just as many steps as in the accounting cycle for a merchandising company. ____ 9. With regard to the accounts used to record freight costs, a. Freight-out is added to Cost of Goods Sold. b. Freight-out's normal balance is a debit. c. Freight-out is recorded when freight terms are FOB shipping point. d. Freight-out is a contra account to Sales. ____ 10. The Sales Returns and Allowances account a. normally has a credit balance. b. should not be closed at the end of the period. c. is a contra account to Accounts Receivable. d. is used by a merchandising company, but not a service enterprise. ____ 11. A debit to Sales Returns and Allowances is evidence of a a. sale on account. b. return of goods originally purchased on account. c. return of goods originally sold on account. d. purchase of goods on account. ____ 12. Which of the following accounts is not included in the computation of net sales? a. Sales Discounts b. Sales c. Sales Returns and Allowances d. Freight Out ____ 13. Given the following information, compute the amount of cash finally remitted by the customer. Oct. 22?Sale on credit, terms of 2/10, n/30?$3,000 Oct. 27?Allowance granted due to some items being damaged?$300 Oct. 31?Payment in full received from customer?$? a. $2,646. b. $3,000. c. $2,640. d. $2,814. ____ 14. In order to minimize errors when taking a physical inventory, each inventory counter should be required to establish the authenticity of each inventory item. This is an application of the internal control principle of a. documentation procedures. b. independent internal verification. c. segregation of duties. d. establishment of responsibility. ____ 15. Which statement is false regarding the lower of cost or market (LCM) method of inventory? a. Market is defined as current replacement cost, not selling price. b. LCM is an example of the accounting concept of conservatism. c. LCM is applied to individual items listed on the inventory summary sheets. d. All of the above are true regarding LCM. ____ 16. Proponents of LIFO, as opposed to FIFO, point out that LIFO results in a. lower income taxes in a period of deflation. b. a more current cost of goods sold. c. lower net income in a period of deflation. d. higher net income in periods of inflation. ____ 17. Goods in transit should be included in the inventory of the a. buyer when the terms are FOB destination. b. buyer when the terms are FOB shipping point. c. transportation company when the terms are FOB destination. d. seller when the terms are FOB shipping point. ____ 18. The ending inventory of Larkin Company, which uses a periodic inventory system, was understated $7,000 on December 31, 2007, and overstated $3,000 on December 31, 2008. Because of these errors, 2008 net income was a. overstated $3,000. b. overstated $10,000. c. understated $4,000. d. understated $10,000. PART II ? JOURNAL ENTRIES (26 points) The ledger accounts given below, with an identification number for each, are used by Kiner Company. Instructions: Prepare appropriate entries for the month of August by placing the appropriate identification number(s) in the debit and credit columns provided and the dollar amounts pertaining to each account in the adjoining columns. 1. Cash 7. Accounts Payable 2. Accounts Receivable 8. Sales Returns and Allowances 3. Notes Receivable 9. Sales Discounts 4. Merchandise Inventory 10. Sales 5. Office Supplies 11. Cost of Goods Sold 6. Land 12. Freight-out ??????????????????????????????????????????? Account(s) Account(s) Debit Credit Entry Information Debited Credited Amount(s) Amount(s) ??????????????????????????????????????????? 0. Aug. 1 Sold merchandise for cash $300. 1 10 $300 $300 The cost of the merchandise sold was $200. 11 4 200 200 1. Aug. 2 Purchased merchandise from ABC Co. on account for $5,000; terms 2/10, n/30. 2. Aug. 4 Sold excess land for $7,000 accepting a 2-year, 12% note. The land was purchased for $7,000 last year. 3. Aug. 6 Sold merchandise to D. Riley on account for $830, terms 2/10, n/30. D. Riley will pay $30 freight costs per the shipping terms. The merchandise sold cost $600. 4. Aug. 8 Accepted a sales return of defective merchandise from D. Riley?credit granted was $280. The returned merchandise cost $200. 5. Aug. 11 Purchased merchandise from Tanner Hardware on account for $2,000; terms 1/10, n/30. 6. Aug. 12 Paid freight of $200 on the shipment from ABC Co. per the shipping terms. 7. Aug. 15 Received payment in full from D. Riley. 8. Aug. 19 Paid ABC Co. in full. 9. Aug. 20 Paid Tanner Hardware in full. 10. Aug. 27 Purchased office supplies for $250 cash. ??????????????????????????????????????????? PART III ? BASIC INVENTORY COMPUTATIONS (18 points) Vaughn Company, which uses a periodic inventory system, had a beginning inventory on May 1, of 400 units of Product A at a cost of $7 per unit. During May, the following purchases and sales were made. Purchases Sales May 6 375 units at $9 May 4 275 units 14 250 units at $10 8 300 units 21 300 units at $11 22 400 units 28 425 units at $13 24 225 units 1,350 1,200 Instructions: Compute the May 31 ending inventory and May cost of goods sold under (a) Average Cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations. (a) Average ? Ending Inventory = $_________; Cost of Goods Sold = $_________. (b) FIFO ? Ending Inventory = $_________; Cost of Goods Sold = $_________. (c) LIFO ? Ending Inventory = $_________; Cost of Goods Sold = $_________. PART IV ? CLOSING ENTRIES (10 points) Below is a partial listing of accounts in the general ledger of Denton Co. Instructions: Place an X in the appropriate column to designate whether the account should be closed at year end and, if so, whether the appropriate closing entry would require a debit or credit to the account. ??????????????????????????????????????????? Not Closed Account Closed Debit Credit ??????????????????????????????????????????? 1. Sales 2. Cost of Goods Sold 3. Accumulated Depreciation 4. Merchandise Inventory 5. Sales Returns and Allowances 6. Dividends 7. Freight-out 8. Retained Earnings 9. Interest Expense 10. Sales Discounts PART V ? INVENTORY: SHORT PROBLEMS (10 points) Instructions: Complete the requirements specified for each of the following independent situations. A. State the missing items identified by ???. 1. Net purchases + ? = Cost of goods purchased 2. Net purchases + ? + ? = Purchases 3. ? + Purchases ? Purchases discounts ? Purchases returns and allowances + Freight-in = ? B. Watts Company uses the lower of cost or market (LCM) basis for its inventory. The following information relates to its December 31, 2008 inventory. Determine the amount of the ending inventory applying LCM to individual items. December 31, 2008 Product Units Unit Cost Market A 200 $19 22 B 250 29 26 C 300 16 18 D 150 30 28 E 180 15 17
Question 5
***Please give an explanation as to how you got the answer and worked through each question/equation including the formula you would use and how you use it and/or enter it on a finance calculator. These are practice questions before a midterm and I am completely lost as to how to solve for the following questions. I really need your help. midterm and final is 50% of my grade so I have to do well and understand what I am doing. Thanks***** _____________________________________________________________ Ch. 5 2. *Present Value and Multiple Cash Flows Q. Investment X offers to pay you $4300 per year for 9 years, whereas Investment Y offers to pay you $6100 per year for 5 years. Which of these cash flow streams has the higher present value if the discount rate is 6 percent? If the discount rate is 22 percent? 3. *Future value and multiple cash flows Havana, Inc., has identified an investment project with the following cash flows. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4? What is the future value at an interest rate of 11 percent? At 24 percent? Year 1 = $910, Year 2 = $1,140, Year 3 = $1,360, Year 4 = $2,100 27. *Discounted cash flow analysis If the appropriate discount rate for the following cash flows is 8.4 percent, what is the present value of the cash flows? Year 1 = $1200, Year 2 = $1,100, Year 3 = $800, Year 4 = $600 28. *Discounted cash flow analysis If the appropriate discount rate for the following cash flows is 9.29 percent per year, what is the present value of the cash flows? Year 1 = $1,900, Year 2 = $2,300, Year 3 = $4,500, Year 4 = $5100 Ch.6 6. Bond prices App Store Co. issed 15- year bonds one year ago at a coupon rate of 6.1 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.3 percent, what is the current bond price? 7. Bond Yields Night Hawk Co. issued 15-year bonds two years ago at a coupon rate of 8.4 percent. The bonds make semiannual payments. If these bonds currently sell for 108 percent of par value, what is the YTM? 15. Bond price movements Bond X is a premium bond making annual payments. The bond pays an 8 percent coupon, has a YTM of 6 percent, and has 13 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 6 percent coupon, has a YTM of 8 percent, and also has 13 years to maturity. What are the prices of these bonds today? If the interest rates remain unchanged, what do you expect the prices of these bonds to be in one year? In three years? In eight years? In 12 years? In 13 years? What's going on here? Illustrate your answers by graphing bond prices versus time to maturity. 16. Interest Rate Risk Both Bond Bill and Bond Ted have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Bill? Of Bond Ted? If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Bill be then? Of Bond Ted? Illustrate your answers by graphing bond prices versus YTM. What does this problem tell you about the interest rate risk of longer-term bonds?
