Question 1
Ques. 4) In 2010, Jack's Art Gallery sold 200 original works of art for $1,240,520. The gallery acquired the works sold for $530,000. Each painting was framed using predesigned framing kits in the gallery's own workshop. The firm bought 100 kits in January for $50,000, 100 kits in March for $60,000.,100 kits in May for $40,000 and 100 kits in August for $30,000. Other costs of operation, including salaries, supplies, rent, etc., totaled $200,000. The company depreciated its assets by $120,000 and paid interest on loans totaling $55,000. Assuming no other costs and that Jack's Art Gallery used FIFO in its inventory management, the firm's EBITDA for 2010 was? Ques. 5) Jake Smith opened his Balinese coffee shop business in downtown Boise on January 1st 2010. On December 31st, 2010, he sat down with his accountant to figure out how his business had done in its first year and heaved a sigh of relief when his accountant reported that his EBT came to $20,000. Revenues, at $1,050,000 looked good. His expenses were as follows: Salaries and benefits paid to employees $210,000 Jake's own salary $100,000 Supplies (coffee, tea, milk, pastries, etc.) $620,000 Cost of Restaurant grade coffee machine $30,000 Miscellaneous operating costs $44,000 Interest on loan $12,000 How much did Jake's accountant allocate for depreciation and amortization? Ques. 6) Timber firewood company reported the following numbers in its 2010 income statement: EBIT $520,000 Depreciation $35,000 Interest expenses $24,000 General expenses $110,000 If it's marginal tax rate was 30%, what were Timber's cash flows from operating activities for 2010? Ques. 7) For the year ending June 30, 2008, the Austin Corporation has current assets of $ 275,000 and total assets of $ 900,000. It also has current liabilities of $ 150,000, equity of $ 200,000, and retained earnings of $ 100,000. The marginal tax rate for the firm is 30%. How much long-term debt does the firm have? Ques. 8) The Johnson and Baker Company increased investments in foreign securities by $ 120,000, funded fixed asset acquisitions by $ 1,500,000, and sold $ 90,000 of long-term debt. Also, the firm had a net inflow of $ 300,000 from the sale of assets. What is the net cash used in investing activities? Ques. 11) Owners Equity consists of all the following except: a. Additional paid in capital. b. Par value stock c. Debentures outstanding d. Retained earnings Ques. 12) On the statement of cash flows an increase in accounts receivables is considered: a. A cash inflow b. A use of cash c. A source of cash d. None of the above Ques. 13) Which of the following best describes how corporations are taxed on dividend income? a. Like individuals, corporations are taxed on all dividends received. b. Seventy percent of dividend income received by corporations is tax exempt. c. Varying amounts of dividend income received by corporations are tax-exempt, depending on the percent of the paying corporation that the receiving corporation owns. d. In order to avoid triple taxation of earnings, dividend income received by one corporation from another in which it owns stock is 100% tax-exempt. Ques. 14) Kleaner Kars has a return on assets of 6.75 percent, a total asset turnover rate of 1.3, and an equity multiplier of 1.6. Using the Dupont Identity, what is the return on equity? Ques. 15) Jefferson and Sons has total assets of $807,200, total equity of $509,500, total sales of $945,300, and net income of $25,600. What is the profit margin? Ques. 16) A firm has a debt-to-equity ratio of 0.5. What is the firm?s equity multiplier? Ques. 17) Knox Corp. plans to sell 1,000 units in 2011 at an average sale price of $40 each. Cost of goods sold will be 40% of the sale price. Depreciation expense will be $2,500, interest expense $1,500, and other expenses will be $3,000. Wessel's tax rate is 35%. What will Knox Corp.'s net income be for 2011? Ques. 18) What is the return on stockholders' equity for a firm with a net profit margin of 4.9 percent, sales of $350,000, an equity multiplier of 1.6, and total assets of $215,000? Ques. 19) Assume a firm has an average inventory of $50,000, sales of $250,000, gross profit of $100,000, and net income of $25,000. The preferred formulation for an inventory turnover results in an inventory turnover of: a. 1 time b. 3 times c. 4 times d. 5.5 times Ques. 20) The higher the rate of interest: a. the smaller the future value of an amount invested to-day b. the smaller the present value of a future sum of money c. the larger the present value of a future sum of money d. all of the above Ques. 21) Holding all other variables constant, an increase in the interest rate will cause ________ to decrease. a. Future values b. Annuity payments c. Present values d. Growth rates Ques. 22) You have just calculated the present value of the expected cash flows of a potential investment. Management thinks your figures are too low. Which of the following actions would increase the present value of your cash flows? a. assume a longer stream of cash flows of the same amount b. decrease the discount rate c. increase the discount rate d. a and b Ques. 23) Ed Sloan wants to withdraw $25,000 (including principal) from an investment fund at the end of each year for five years. How should he compute his required initial investment at the beginning of the first year if the fund earns 10% compounded annually? a. $25,000 times the future value of a 5-year, 10% ordinary annuity of 1. b. $25,000 divided by the future value of a 5-year, 10% ordinary annuity of 1. c. $25,000 times the present value of a 5-year, 10% ordinary annuity of 1. d. $25,000 divided by the present value of a 5-year,10% ordinary annuity of 1. Ques. 24) What amount will be in a bank account three years from now if $5,000 is invested each year for four years with the first investment to be made today? a. ($5,000 x 1.260) + ($5,000 x 1.166) + ($5,000 x 1.080) + $5,000 b. $5,000 x 1.360 x 4 c. ($5,000 x 1.080) + ($5,000 x 1.166) +($5,000 x 1.260) + d. ($5,000 x 1.360) e. $5,000 x 1.080 x 4 Ques. 25) On January 1, 2004, Carly Company decided to begin accumulating a fund for asset replacement five years later. The company plans to make five annual deposits of $30,000 at 9% each January 1 beginning in 2004. What will be the balance in the fund, within $10, on January 1, 2009 ( one year after the last deposit)? The following 9% Interest factors may be used. Present Value of Ordinary Annuity Future Value of Ordinary Annuity 4 periods 3.2397 4.5731 5 periods 3.8897 5.9847 6 periods 4.4859 7.5233 a. $195,699 b. $179,541 c. $163,500 d. $150,000 Ques. 26) Your uncle promises to give you $550 per quarter for the next five years starting today. How much is his promise worth right now if the interest rate is 8% compounded quarterly? a. $9,173.14 b. $13,363.57 c. $13,630.84 d. $8,993.27 Ques. 27) Your bank account pays a 6% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT? a. The periodic rate of interest is 1.5% and the effective rate of interest is 3%. b. The periodic rate of interest is 6% and the effective rate of interest is greater than 6%. c. The periodic rate of interest is 1.5% and the effective rate of interest is greater than 6%. d. The periodic rate of interest is 3% and the effective rate of interest is 6%. e. The periodic rate of interest is 6% and the effective rate of interest is also 6%. Ques. 28) Suppose an ExxonMobil Corporation bond will pay $4,500 ten years from now. If the going interest rate on safe 10-year bonds is 4.25%, how much is the bond worth today? Ques. 29) You want to go to Europe 5 years from now, and you can save $3,100 per year, beginning one year from today. You plan to deposit the funds in a mutual fund that you think will return 8.5% per year. Under these conditions, how much would you have just after you make the 5th deposit, 5 years from now? Ques. 30) A portfolio with a level of systematic risk the same as that of the market has a beta that is: a. equal to zero b. equal to one c. less than the beta of the risk-free asset d. less than zero Ques. 31) The expected return on KarolCo. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of KarolCo is 2.3, then what is the risk premium on the market assuming CAPM is true? a. 2.5% b. 5.0% c. 7.5% d. 10.0% Ques. 32) Using the above information, what is the rate of return on the market? a. 2.5% b. 5.0% c. 7.5% d. 10.0% Ques. 33) The expected return for Stock Z is 30 percent. If we know the following information about Stock Z: Return Probability Poor 0.2 0.25 Lukewarm ? 0.5 Dynamite! 0.4 0.25 What return will stock Z produce in the Lukewarm state of the world? A) 20% B) 30% C) 40% D) It is impossible to determine. Ques. 34) The risks that diversification cannot eliminate are: a. Interest rate risk. b. risk due to a recession. c. inflation risk. d. systematic risk. e. all of the above Ques. 35) Kevin purchased a stock a year ago that pays a dividend. He has earned a 50%. The stock was purchased for $16 and is now worth $21. What is the amount of dividends received during the year? Ques. 36) John is investing in the S&P 500. His expected return on the S&P 500 is 10% with a standard deviation of 4%. If John is investing $200,000, then what is the dollar range of returns that John can have with 90 percent confidence at the end of the year? Ques. 37) Microsoft?s beta is 1. The risk free rate of return is 2%. If the expected return on the market is 12 percent, then the expected return on Microsoft is: Ques. 38) What is the relationship between present value and future value interest factors? A. The present value and future value factors are equal to each other. B. The present value factor is the exponent of the future value factor. C. The future value factor is the exponent of the present value factor. D. The factors are reciprocals of each other. E. There is no relationship between these two factors. Ques. 39) An investment that costs $50,000 will return $15,000 operating cash flows per year for five years. Determine the net present value of the investment if the required rate of return is 14 percent. Should the investment be undertaken? ( Your answer might be slightly different due to rounding. Select the best answer from those available.) A. Yes, the profit is $25,000. B. No, the accounting return is less than 14%. C. No, the net present value is negative at $11,045. D. Yes, the net present value is positive at $1,496.50. Ques. 40) What is the net present value of a project with the following cash flows if the required rate of return is 15 percent? Year Cash Flow 0 -$42,398 1 13,407 2 21,219 3 17,800 A. -$1,574.41 B. -$1,208.19 C. -$842.12 D. -$2,991.34 E. $1,311.16,Thank you!
Question 2
I have attached my last two cases so you can see where I left off. This will help you understand the question THE EXCELLENT CONSULTING GROUP COMMUNICATION FROM ART: I reviewed your report regarding Organizational Diagnosis and thought you did a nice job. I presented your recommendation to HP and Palm and had several discussions with them. They finally decided they want to use the Nadler-Tushman Congruence Model to analyze the overall congruence in the company - they like the Input and Output analysis that this model provides. First, the execs are interested in the Inputs, including the Strategy. They are interested in getting an objective opinion of what their critical inputs are and how they align with their strategy. So I suggest that you brush up more on the Congruence model, particularly for this assignment on inputs. For the analysis, I suggest that you start with strategy, since you have already done some work on this aspect in your first report. Review Palm's strategy and then determine which one of Porter's competitive strategies fits with this strategy. Then review the company's inputs and determine one or two specific critical inputs from each input category: environment, resources, and history. Ultimately, I want you to determine how aligned the critical inputs are with the strategy. Is there high congruence (alignment), some congruence, or little to no congruence? I expect you to support your claim with a good, logical argument using the information you have collected. Case Expectations: In order to make this case, you first need to review the strategy and then classify it as one of Porter's competitive strategies. Then identify the Key Input factors in the first three categories. Explain why these are the critical input factors. Then determine how congruent the three input factors are with the strategy. First discuss the organization's strategy and classify it according to Porter's three generic competitive strategies. Then identify the most critical inputs in each of the first three categories and justify WHY they are critical. Also explain what effect the inputs from one category have on inputs from the other categories. How well does the strategy fit with the environmental, resource and historical inputs you identified? Make a Case for your propostion as to how the Key Inputs support (are congruent with) the Strategy. Specifically make a claim: "The inputs at Palm, Inc., consisting of Organizational Environment factors, Internal Resource factors, and Historical Tradition factors are, [highly, partially, or minimally] congruent with the company?s strategy." Support your analysis with objective evidence. Sources of information for the entire project may include interviews, organizational documents and reports, articles in newspapers and trade publications. Be sure to cite your sources and provide a list of references.,Here is the first case that I done that applies to this case. Please let me know ASAP if you will be able to help so I can make other plans. Thanks,4 pages
Question 3
""TAX FORM/RETURN PREPARATION PROBLEM C:11-63 Bottle-Up, Inc., was organized on January 8, 2000, and made its S election on January 24, 2000. The necessary consents to the election were filed in a timely manner. Its federal tax identification number is 38-1507869. Its address is 1234 Hill Street, Gainesville, FL 32607. Bottle-Up uses the calendar year as its tax year, the accrual method of accounting, and the first-in, first-out (FIFO) inventory method. Bottle-Up manufactures ornamental glass bottles. It made no changes to its inventory costing methods this year. It uses the specific identification method for bad debts for book and tax purposes. Herman Hiebert (S.S. No. 123-45-6789) and Melvin Jones (S.S. No. 100-67-2000) own 500 shares each. Both individuals materially participate in Bottle-Up?s single activity. Herman Hiebert is the tax matters person. Financial statements for Bottle-Up for the current year are shown in Tables C:11-2 through C:11-4. Assume that Bottle-Up?s business qualifies as a U.S. production activity and that its qualified production activities income is $90,000. The S corporation uses the small business simplified overall method for reporting these activities (see discussion for Line 12d of Schedules K and K-1 in the Form 1120S instructions). Prepare a current year S corporation tax return for Bottle-Up, showing yourself as the paid preparer. _ TABLE C:11-2 Bottle-Up, Inc. Income Statement for the Year Ended December 31 of the Current Year (Problem C:11-63) Sales $2,500,000 Returns and allowances (15,000 ) Net sales $2,485,000 Beginning inventory $ 102,000 Purchases 900,000 Labor 200,000 Supplies 80,000 Utilities 100,000 Other manufacturing costs 188,000 a Goods available for sale $1,570,000 Ending inventory (96,000 ) 1,474,000 b Gross profit $1,011,000 Salaries c $ 451,020 Utilities expense 54,000 Depreciation (MACRS depreciation is $36,311) 11,782 Automobile and truck expense 26,000 Office supplies expense 9,602 Advertising expense 105,000 Bad debts expense 620 Rent expense 30,000 Interest expense d 1,500 Meals and entertainment expense 21,000 Selling expenses 100,000 Repairs and maintenance expense 38,000 Accounting and legal expense 4,500 Charitable contributions e 9,000 Insurance expense f 24,500 Hourly employees? fringe benefits 11,000 Payroll taxes 36,980 Other taxes 2,500 Penalties (fines for overweight trucks) 1,000 (938,004) Operating profit $ 72,996 Other income and losses: Long-term gain on sale of capital assets $ 48,666g Sec. 1231 loss (1,100) h Interest on U.S. Treasury bills 1,200 Interest on State of Florida bonds 600 Dividends from domestic corporations 11,600 Investment expenses (600) 60,366 Net income 133,362 a Total MACRS depreciation is $74,311. Assume that $38,000 of depreciation has been allocated to cost of sales for both book and tax purposes so that the book and tax inventory and cost of sales amounts are the same. The AMT depreciation adjustment on personal property is $9,000. b The cost of goods sold amount reflects the Uniform Capitalization Rules of Sec. 263A. The appropriate restatements have been made in prior years. c Officer salaries of $120,000 are included in the total. All are employer?s W-2 wages. d Investment interest expense is $500. All other interest expense is trade- or business-related. None of the interest expense relates to the production of tax-exempt income. e The corporation made all contributions in cash to qualifying charities. f Includes $3,000 of premiums paid for policies on lives of corporate officers. Bottle-Up is the beneficiary for both policies. g The corporation acquired the capital assets on March 3, 2007 for $100,000 and sold them on September 15, 2009, for $148,666. h The corporation acquired the Sec. 1231 property on June 5, 2008 for $10,000 and sold it on December 21, 2009, for $8,900. _ TABLE C:11-3 Bottle-Up, Inc. Balance Sheet for January 1 and December 31 of the Current Year (Problem C:11-63) January 1 December 31 Assets: Cash $ 15,000 $116,948 Accounts receivable 41,500 45,180 Inventories 102,000 96,000 Stocks 103,000 74,000 Treasury bills 15,000 16,000 State of Florida bonds 10,000 10,000 Building and equipment 374,600 375,000 Minus: Accumulated depreciation (160,484) (173,100) Land 160,000 190,000 Total $660,616 $750,028 Liabilities and equities: Accounts payable $ 36,000 $ 10,000 Accrued salaries payable 12,000 6,000 Payroll taxes payable 3,416 7,106 Sales taxes payable 5,200 6,560 Due to Mr. Hiebert 10,000 5,000 Mortgage and notes payable (current maturities) 44,000 52,000 Long-term debt 210,000 260,000 Capital stock 10,000 10,000 Retained earnings 330,000 393,362 Total $660,616 $750,028 _ TABLE C:11-4 Bottle-Up, Inc. Statement of Change in Retained Earnings, for the Current Year Ended December 31 (Problem C:11-63) Balance, January 1 $330,000a Plus: Net income $133,362 Minus: Dividends (70,000 ) 63,362 Balance, December 31 $393,362 a The January 1 accumulated adjustments account balance is $274,300." I have attached my work for review
Question 4
An analysis of the income statement and the balance sheet accounts of Headrick, Inc., at December 31, 2009, provides the following information. Income Statement Items: Gain on sale of Marketable Securities $ 42,000 Loss on Sales of Plant Assets 33,000 Analysis of balance sheet accounts: Marketable Securities Account: Debit Entries $ 75,000 Credit Entries 90,000 Notes Receivable Account: Debit Entries 210,000 Credit Entries 162,000 Plant and Equipment Accounts: Debit entries to plant asset accounts 196,000 Credit entries to plant asset accounts 120,000 Debit entries to accumulated depreciation accounts 75,000 Additional Info: 1. Except as noted in 4 below, payments and proceeds relating to investing transactions were made in cash. 2. The marketable securities are not cash equivalents 3. All notes receivable relate to cash loans made to borrowers, not to receivables from customers. 4. Purchases of new equipment during the year ($196,000) were financed by paying $60,000 in cash and issuing a long-term note payable for $136,000. 5. Debits to the accumulated depreciation accounts are made whenever depreciable plant assets are retired. Thus the book value of plant assets retired during the year was $45,000 ($120,000-$75,000) Instructions: a. Prepare the investing activities section of a statement of cash flows. Show supporting computations for the amounts of (1) proceeds from sales of marketable securities and (2) proceeds from sales of plant assets. Place brackets around numbers representing cash outflows. b. Prepare the supporting schedule that should accompany the statement of cash flows in order to disclose the noncash aspects of the company?s investing and financing activities. c. Assume that Headrick?s management expects approximately the same amount of cash to be used for investing activities next year. In general terms, explain how the company might generate cash for this purpose.
Question 5
I tried sending this earlier~hopefully it works this time. I have attached the appendix that I am supposed to fill out. Thank you for your help. I have been pressed for time this week. Tony Masasi started his own consulting firm, Masasi Company, Inc., on June 1, 2008. The trial balance at June 30 is shown on page 129. Prepare adjusting entries, post to ledger accounts, and prepare adjusted trial balance. (SO 5, 6, 7) www. wi ley.com/college/weygan dt MASASI COMPANY, INC. Trial Balance June 30, 2008 Account Number Debit Credit 101 Cash $ 7,150 112 Accounts Receivable 6,000 126 Supplies 2,000 130 Prepaid Insurance 3,000 157 Office Equipment 15,000 201 Accounts Payable $ 4,500 209 Unearned Service Revenue 4,000 311 Common Stock 21,750 400 Service Revenue 7,900 726 Salaries Expense 4,000 729 Rent Expense 1,000 $38,150 $38,150 In addition to those accounts listed on the trial balance, the chart of accounts for Masasi Company, Inc. also contains the following accounts and account numbers:No. 158 Accumulated Depreciation? Office Equipment, No. 212 Salaries Payable,No. 244 Utilities Payable,No. 631 Supplies Expense, No. 711 Depreciation Expense,No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. Supplies on hand at June 30 are $600. 2. A utility bill for $150 has not been recorded and will not be paid until next month. 3. The insurance policy is for a year. 4. $2,500 of unearned service revenue has been earned at the end of the month. 5. Salaries of $2,000 are accrued at June 30. 6. The office equipment has a 5-year life with no salvage value. It is being depreciated at $250 per month for 60 months. 7. Invoices representing $1,000 of services performed during the month have not been recorded as of June 30. Instructions (a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal. (b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. (c) Prepare an adjusted trial balance at June 30, 2008.
