Question 1
"Legal Stars has four employees. FICA Social Security taxes are 6.2% of the first $106,800 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, its FUTA taxes are 0.8% and SUTA taxes are 2.15% of the first $7,000 paid to each employee. The company is preparing its payroll calculations for the week ended August 25. Payroll records show the following information for the company's four employees. Current Week Name Gross Pay through 8/18 Gross Pay Income Tax Withholding Dale $ 105,300 2,000 252 Ted 36,650 900 99 Kate 6,750 450 54 Chas 1,050 400 36 In addition to gross pay, the company must pay one-half of the $32 per employee weekly health insurance; each employee pays the remaining one-half. The company also contributes an extra 8% of each employee's gross pay (at no cost to employees) to a pension fund. Compute the following for the week ended August 25 (round amounts to the nearest cent). 1. Each employee's FICA withholdings for Social Security. 2. Each employee's FICA withholdings for Medicare. 3. Employer?s FICA taxes for Social Security. 4. Employer?s FICA taxes for Medicare. 5. Employer?s FUTA taxes. 6. Employer?s SUTA taxes. 7. Each Employee?s net (take-home) pay. 8. Employer?s total payroll-related expense for each employee.
Question 3
Larissa approached Dan about the company?s performance and future growth plans. First, Larissa wants to find out how East Coast Yachts is performing relative to its peers. Additionally, she wants to find out the future financing necessary to fund the company?s growth. Larissa hoped that Dan would be able to estimate the amount of capital the company would have to raise next year so that East Coast Yachts would be better prepared to fund its expansion plans. To get Dan started with his analyses, Larissa provided the following financial statements. Dan then gathered the industry ratios for the yacht manufacturing industry. EAST COAST YACHTS 2010 Income Statement Sales $617,760,000 Cost of goods sold 435,360,000 Selling, general, & admin 73,824,000 Depreciation 20,160,000 Earnings before interest and taxes (EBIT) $ 88,416,000 Interest Expense 11,112,000 EBT $ 77,304,000 Taxes 30,921,600 Net income $46,382,400 Dividends $ 17,550,960 retained earnings $ 28,831,440 EAST COAST YACHTS Balance Sheet as of 2010 Assets Liabilities & Equity Current assets Current liabilities Cash $ 11,232,000 Accounts payable $ 24,546,000 Accounts receivable 20,208,000 Notes payable 18,725,000 Inventory 22,656,000 Accrued Expense 6,185,000 Other 1,184,000 Total $55,280,000 Total $49,456,000 Fixed assets $462,030,000 Long-term debt $146,560,000 Less depreciation (114,996,000) Net property,plant, equip $347,034,000 Intangible assets and others 6,840,000 Totalfixed assets $353,874,000 Total assets $409,154,000 STOCKholders? equity Preferred Stock $3,000,000 Common stock $ 40,800,000 Capital Surplus $31,200,000 Retained earnings 186,138,,000 Less Treasury Stock (48,000,000) Total equity $213,138,000 Total liabilities and equity $409,154,0000 Yacht Industry Ratios Lower Quartile Median Upper Quartile Current ratio 0.86 1.51 1.97 Quick ratio 0.43 0.75 1.01 Total asset turnover 1.10 1.27 1.46 Inventory turnover 12.18 14.38 16.43 Receivables turnover 10.25 17.65 22.43 Debt ratio 0.32 0.47 0.61 Debt-equity ratio 0.51 0.83 1.03 Equity multiplier 1.51 1.83 2.03 Interest coverage 5.72 8.21 10.83 Profit margin 5.02% 7.48% 9.05% Return on assets 7.05% 10.67% 14.16% Return on equity 9.06% 14.32% 20.83% 6.. Most assets can be increased as a percentage of sales. For instance, cash can be increased by any amount. However, fixed assets must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine. In this case, a company has a "staircase" or "lumpy" fixed cost structure. Assume East Coast Yachts is currently producing at 100 percent capacity and sales are expected to grow at 20 percent. As a result, to increase production, the company must set up an entirely new line at a cost of $95,000,000 Prepare the pro forma income statement and balance sheet. What is the new EFN with these assumptions? What does this imply about capacity utilization for the company next year?,Current Ratio Current assets / Current liabilities 1.12 Quick Ratio Current assets - Inventories / Current liabilities 0.66 Total asset turnover Sales / Total assets 1.51 Inventory turnover Cost of goods sold / Inventory 19.22 Receivables turnover Sales / Accounts receivable 30.57 Debt ratio Total assets - Total equity / Total assets 0.48 Debt-equity ratio Total debt / Total equity 0.92 Equity multiplier Total assets / Total equity 1.92 Interest coverage EBIT / Interest 7.96 Profit margin Net income / Sales 7.51% Return on assets Net income / Total assets 11.34% Return on equity Net income / Total equity 21.76% thats the answer i got,can you help me, why is it different?
Question 4
Teller Co. sold 20,500 units of its only product and incurred a $65,000 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2010?s activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $210,000. The maximum output capacity of the company is 41,000 units per year. TELLER COMPANY Contribution Margin Income Statement For Year Ended December 31, 2009 Sales $1,025,000 Variable costs 820,000 Contribution margin 205,000 Fixed costs 270,000 Net loss $(65,000) ________________________________________ 1. Compute the break-even point in dollar sales for year 2009. (Omit the "$" sign in your response.) Break-even point in dollar sales for year 2009 $ 2. Compute the predicted break-even point in dollar sales for year 2010 assuming the machine is installed and there is no change in unit sales price. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) Break-even point in dollar sales for year 2010 $ 3. Prepare a forecasted contribution margin income statement for 2010 that shows the expected results with the machine installed. Assume that the unit sales price and the number of units sold will not change, and no income taxes will be due. (Input all amounts as positive values. Omit the "$" sign in your response.) TELLER COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2010 Sales $ Variable costs Contribution margin Fixed costs $ ________________________________________ 4. Compute the sales level required in both dollars and units to earn $132,951 of after-tax income in 2010 with the machine installed and no change in unit sales price. Assume that the income tax rate is 30%. (Input all amounts as positive values. Round your answers to the nearest whole number. Omit the "$" sign in your response.) Sales level required in dollars $ Sales level required in units Units 5. Prepare a forecasted contribution margin income statement that shows the results at the sales level computed in requirement 4. Assume an income tax rate of 30%. (Input all amounts as positive values. Omit the "$" sign in your response.) TELLER COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2010 Sales $ Variable costs Contribution margin Fixed costs Income before income taxes Income taxes $ ________________________________________
