Question 1
1) When the cash proceeds from a bond issued with detachable stock warrants exceed the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to A. additional paid-in capital from stock warrants. B. premium on bonds payable. C. retained earnings. D. a liability account. 2) A corporation issues bonds with detachable warrants. The amount to be recorded as paid-in capital is preferably A. zero. B. based on the relative market values of the two securities involved. C. calculated by the excess of the proceeds over the face amount of the bonds. D. equal to the market value of the warrants. 3) The conversion of preferred stock into common stock requires that any excess of the par value of the common shares issued over the carrying amount of the preferred being converted should be A. reflected currently in income, but NOT as an extraordinary item. B. treated as a direct reduction of retained earnings. C. reflected currently in income as an extraordinary item. D. treated as a prior period adjustment. 4) Which of the following represents the total number of shares that a corporation may issue under the terms of its charter? A. authorized shares B. outstanding shares C. issued shares D. unissued shares 5) The accounting problem in a lump sum issuance is the allocation of proceeds between the classes of securities. An acceptable method of allocation is the A. pro forma method. B. either the proportional method or the incremental method. C. proportional method. D. incremental method. 6) Stockholders' equity is generally classified into two major categories: A. contributed capital and appropriated capital. B. earned capital and contributed capital. C. appropriated capital and retained earnings. D. retained earnings and unappropriated capital. 7) How should a "gain" from the sale of treasury stock be reflected when using the cost method of recording treasury stock transactions? A. As paid-in capital from treasury stock transactions. B. As ordinary earnings shown on the income statement. C. As an extraordinary item shown on the income statement. D. As an increase in the amount shown for common stock. 8) When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited? A. Paid-in capital in excess of par for the purchase price. B. Treasury stock for the par value and paid-in capital in excess of par for the excess of the purchase price over the par value. C. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value. D. Treasury stock for the purchase price. 9) ?Gains" on sales of treasury stock (using the cost method) should be credited to A. capital stock. B. paid-in capital from treasury stock. C. other income. D. retained earnings. 10) Antidilutive securities A. are those whose inclusion in earnings per share computations would cause basic earnings per share to exceed diluted earnings per share. B. should be included in the computation of diluted earnings per share but NOT basic earnings per share. C. should be ignored in all earnings per share calculations. D. include stock options and warrants whose exercise price is less than the average market price of common stock. 11) In the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price, the computation would A. fairly present the maximum potential dilution of diluted earnings per share on a prospective basis. B. fairly present diluted earnings per share on a prospective basis. C. be antidilutive. D. reflect the excess of the number of shares assumed issued over the number of shares assumed reacquired as the potential dilution of earnings per share. 12) What effect will the acquisition of treasury stock have on stockholders' equity and earnings per share, respectively? A. Increase and no effect B. Decrease and no effect C. Increase and decrease D. Decrease and increase 13) A corporation declared a dividend, a portion of which was liquidating. How would this distribution affect each of the following? Additional Paid-in Capital | Retained Earnings A. Decrease | Decrease B. Decrease | No effect C. No effect | No effect D. No effect | Decrease 14) On May 1, 2007, Kent Corp. declared and issued a 10% common stock dividend. Prior to this dividend, Kent had 100,000 shares of $1 par value common stock issued and outstanding. The fair value of Kent 's common stock was $20 per share on May 1, 2007. As a result of this stock dividend, Kent's total stockholders' equity A. decreased by $200,000. B. increased by $200,000. C. did NOT change. D. decreased by $10,000. 15) Palmer Corp. owned 20,000 shares of Dixon Corp. purchased in 2003 for $240,000. On December 15, 2006, Palmer declared a property dividend of all of its Dixon Corp. shares on the basis of one share of Dixon for every 10 shares of Palmer common stock held by its stockholders. The property dividend was distributed on January 15, 2007. On the declaration date, the aggregate market price of the Dixon shares held by Palmer was $400,000. The entry to record the declaration of the dividend would include a debit to Retained Earnings of A. $160,000. B. $0. C. $400,000. D. $240,000.
Question 2
Industry competition case: Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century. Paper, 12-15 pages. Format is standard APA, double spaced 12pt. Please include a reference page In this case study, complete the following 4 items: 1.Use the 11 step strategic model described in the text to compare both Coke and Pepsi. Incorporate the strategic issues presented in the case in the 11 steps as appropriate. 2.Analyze the case from the theoretical framework of at least two of the articles discussed in the course. Specify the articles analyzed in the paper. ** the articles are attached and labeled 1, 2, 3. You decide which two you would like to discuss. 3 .Discuss the implications of the case issues for middle managers. 4.Address at least 2 of the following questions in the case study. 1. Despite less valuable brands, PepsiCo has done very well in comparison to Coca-Cola. What strategies of Pepsi and of Coke contributed to this situation? 2. Coca-Cola has encountered union troubles in Colombia. Comment on the Frontline program available at: Coca-Cola?s union troubles in Columbia covered by Frontline http://www.pbs.org/frontlineworld/fellows/colombia0106/ 3. Coca-Cola?s problem with its bottlers: Coca-Cola trying to renegotiate its syrup contract with bottlers - is this an issue? Coca-Cola trying to renegotiate its syrup contract with bottlers (WSJ 13-Mar-2006) 4. Can Coca-Cola recover? Can Coca-Cola recover? (FT 19-Apr-2006) Visit the following websites for background information on the Cola Wars: PepsiCo annual report http://www.pepsico.com/Investors/Annual-Reports.html Coca-Cola Annual Report http://www.thecoca-colacompany.com/investors/annual_other_reports.html The Cola Wars http://en.wikipedia.org/wiki/Cola_wars Please be sure to use the links mentioned. I copied and pasted each of the links into Google and they popped right up.
Question 3
1 Part a The Robinson Company from Problem 2 had net sales of $1,200,000 in 2010 and $1,300,000 in 2011. a. Determine the receivables turnover in each year. b. Calculate the average collection period for each year. c. Based on the receivables turnover for 20 I 0, estimate the investment in receivables if net sales were $1,300,000 in 20 11. d. How much of a change in the 2011 receivables occurred? Part b Suppose the Robinson Company had a cost of goods sold of$1,000,000 in 2010 and $1,200,000 in 2011. a. Calculate the inventory turnover for each year. Comment on your findings. b. What would have been the amount of inventories in 2011 if the 2010 turnover ratio had been maintained?,1 Part a. The Robinson Company has the following current assets and current liabilities for these two years: 2010 2011 Cash and marketable securities $ 50,000 $ 50,000 Accounts receivable $300,000 $350,000 Inventories $350,000 $500,000 Total current assets $700,000 $900,000 Accounts payable $200,000 $250,000 Bank loan $0 $150,000 Accruals $150,000 $200,000 Total current liabilities $350,000 $600,000 If sales in 2010 were $1.2 million, sales in 201 t were $1.3 million, and cost of goods sold was 70 percent of sales, how long were Robinson's operating cycles and cash conversion cycles in each of these years? What caused them to change during this time? Part b. The Robinson Company from Problem 2 had net sales of $1,200,000 in 2010 and $1,300,000 in 2011. a. Determine the receivables turnover in each year. b. Calculate the average collection period for each year. c. Based on the receivables turnover for 20 I 0, estimate the investment in receivables if net sales were $1,300,000 in 20 11. d. How much of a change in the 2011 receivables occurred? Part c. Suppose the Robinson Company had a cost of goods sold of$1,000,000 in 2010 and $1,200,000 in 2011. a. Calculate the inventory turnover for each year. Comment on your findings. b. What would have been the amount of inventories in 2011 if the 2010 turnover ratio had been maintained?
Question 4
Winfrey Co.'s March 31 inventory of raw materials is $150,000. Raw materials purchases in April are $400,000, and factory payroll cost in April is $220,000. Overhead costs incurred in April are: indirect materials, $30,000; indirect labor, $14,000; factory rent, $20,000; factory utilities, $12,000; and factory equipment depreciation, $30,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $380,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 Balances on March 31 Direct materials $14,000 $18,000 Direct labor 18,000 16,000 Applied overhead 9,000 8,000 Costs during April Direct materials 100,000 170,000 80,000 Direct labor 30,000 56,000 120,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process a.Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.) b.Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory. c.Transfer of Jobs 306 and 307 to the Finished Goods Inventory. d.Cost of goods sold for Job 306. e.revenue from the sale of Job 306. f.Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) 2.Prepare journal entries for the month of April to record the above transactions a. Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.) b. Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory. c. Transfer of Jobs 306 and 307 to the Finished Goods Inventory. d. Cost of goods sold for Job 306. e. Revenue from the sale of Job 306. f. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) 2. Prepare journal entries for the month of April to record the above transactions Compute gross profit for April. Gross profit $____________ Show how to present the inventories on the April 30 balance sheet. Inventories Raw materials $__________ Goods in process (Job 308) ___________ Finished goods (Job 307) _________- Total inventories $____________
Question 5
When calculating earnings per share and PE ratios, please show your work. 1. You manufacture hunting pack systems in China for 80 dollars each, including shipping. The manufacturing costs only include variable costs. Variable costs are not calculated as a percentage of sales in this case. Sales are a function of the number of packs sold and the price per pack. Likewise, variable costs are a function of the number of packs sold and the cost to produce each pack. You sell these packs to retailers for 200 dollars each. In the current year you will sell 100,000 packs. Your fixed costs including such items as insurance, marketing, travel, shows, office supplies, warehouse rentals etc. totals 5 million dollars this year and are not part of the 80 dollars per pack manufacturing cost. The federal income tax rate for your company is 40 percent. Your company is publicly traded on the NASDAQ with 1,000,000 shares outstanding. a. Please create a current income statement using the same format as found in the lecture. (25 points) b. Please calculate earnings per share. (5 points) c. Please calculate the price/earnings multiple assuming that the current stock price is 10 dollars per share. (5 points) 2. Create a two-year forecast of the income statement from the information provided in problem number one. Please create three columns of data: current year, year 2, and year 3. Assume that sales increase ten percent per year for year?s two and three. Please show the earnings per share for each of the three years. (25 points) 3. Please estimate the stock price for year?s two and three, assuming that the current PE multiple remains constant for each of the two forecasted years. (15 points),I could only chouse $25 or $30 in the fields. I am willing to give a $5 tip to reach the $35 you are asking if I can get the answers by the date specified. I have some outstanding issues witht he service so far. I posted this question now three times. Each with a $20, $25 and $30 deposit. That is 475 tied up in credit. I am waiting to be refunded my $45. Hopefully you will see this and, and we can move forward. Not sure why the system is giving me such a hard time this go around, by I will appreciate any assistance you can provide. I attached the lecture to give you an idea of how the questions should be answered. Here are the questions: When calculating earnings per share and PE ratios, please show your work. 1. You manufacture hunting pack systems in China for 80 dollars each, including shipping. The manufacturing costs only include variable costs. Variable costs are not calculated as a percentage of sales in this case. Sales are a function of the number of packs sold and the price per pack. Likewise, variable costs are a function of the number of packs sold and the cost to produce each pack. You sell these packs to retailers for 200 dollars each. In the current year you will sell 100,000 packs. Your fixed costs including such items as insurance, marketing, travel, shows, office supplies, warehouse rentals etc. totals 5 million dollars this year and are not part of the 80 dollars per pack manufacturing cost. The federal income tax rate for your company is 40 percent. Your company is publicly traded on the NASDAQ with 1,000,000 shares outstanding. a. Please create a current income statement using the same format as found in the lecture. (25 points) b. Please calculate earnings per share. (5 points) c. Please calculate the price/earnings multiple assuming that the current stock price is 10 dollars per share. (5 points) 2. Create a two-year forecast of the income statement from the information provided in problem number one. Please create three columns of data: current year, year 2, and year 3. Assume that sales increase ten percent per year for year?s two and three. Please show the earnings per share for each of the three years. (25 points) 3. Please estimate the stock price for year?s two and three, assuming that the current PE multiple remains constant for each of the two forecasted years. (15 points),Hi- Are you getting my messages? In the past, as soon as I submitted something it would immediately post. Right now there seems to be a delay. Please let me know if you received a message I sent in the 9:50 am range CST. Once I know you are actually reading my messages, I will feel better :)
