Question 1
1. (TCO A) Which one of the following is an advantage of corporations relative to partnerships and sole proprietorships? (Points : 5) Reduced legal liability for investors Harder to transfer ownership Lower taxes Most common form of organization 2. (TCO A) The Dividends account _____. (Points : 5) is increased with a debit is decreased with a credit is not an expense account All of the above 3. (TCOs A, B) Below is a partial list of account balances for Kerner Company: Cash $10,000 Prepaid insurance 1,000 Accounts receivable 5,000 Accounts payable 4,000 Notes payable 6,000 Common stock 2,000 Dividends 1,000 Revenues 30,000 Expenses 25,000 What did Kerner Company show as total credits? (Points : 5) $43,000 $41,000 $42,000 $44,000 4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5) sales under $1,000,000 no accountants on staff insignificant receivables and payables all sales and purchases on account 5. (TCO D) Two companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5) LIFO will have the highest ending inventory FIFO will have the highest cost of goods sold FIFO will have the highest ending inventory LIFO will have the lowest cost of goods sold 6. (TCOs A, E) Equipment with a cost of $192,000 has an estimated salvage value of $18,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? (Points : 5) $48,000 $52,500 $49,500 $43,500 7. (TCOs D, G) Joyce Corporation issues 1,000 ten-year, 8%, $1,000 bonds dated January 1, 2007, at 102. The journal entry to record the issuance will show a _____. (Points : 5) debit to Cash of $1,020,000 debit to Discount on Bonds Payable for $20,000 credit to Bonds Payable for $1,020,000 credit to Cash for $1,000,000 8. (TCO C) Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $240,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is _____. (Points : 5) $240,000 $250,000 $310,000 $230,000 9. (TCO F) Which one of the following is not a tool in financial statement analysis? (Points : 5) Horizontal analysis Circular analysis Vertical analysis Ratio analysis 10. (TCO F) Comparisons of data within a company are an example of the following comparative basis. (Points : 5) Industry averages Intercompany Intracompany Interregional 11. (TCO F) Which one of the following is not a characteristic generally evaluated in ratio analysis? (Points : 5) Liquidity Profitability Marketability of the product Solvency 12. (TCO F) Short-term creditors are usually most interested in assessing _____. (Points : 5) solvency liquidity marketability profitability 13. (TCO F) Return on common stockholder's equity ratio is affected by _____. (Points : 5) net income dividend paid to preferred stock, if any leverage (debt-to-assets ratio) All of the above 14. (TCO G) The present value of a bond is a function of which factors below? (Points : 5) The market interest rate The length of time until the amounts are received The dollar amounts to be received All of the above 1. (TCO A) Below you will find selected information (in millions) from Coca-Cola Co.?s 2012 Annual Report: Income Taxes Payable $471 Short-term Investments and Marketable Securities 8,109 Cash 8,442 Other non-current Liabilities 10,449 Common Stock 1,760 Receivables 4,812 Other Current Assets 2,973 Long-term Investments 10,448 Other Non-current Assets 3,585 Property, Plant and Equipment 23,486 Trademarks 6,527 Other Intangible Assets 20,810 Allowance for Doubtful Accounts 53 Accumulated Depreciation 9,010 Accounts Payable 8,680 Short Term Notes Payable 17,874 Prepaid Expenses 2,781 Other Current Liabilities 796 Long-Term Liabilities 14,736 Paid-in-Capital in Excess of Par Value 11,379 Retained Earnings 55,038 Inventories 3,264 Treasury Stock 35,009 Other information taken from the Annual Report: Sales Revenue for 2012 $48,017 Cost of Goods Sold for 2012 19,053 Net Income for 2012 9,019 Inventory Balance on 12/31/11 3,092 Net Accounts Receivable Balance on 12/31/11 4,920 Total Assets on 12/31/11 79,974 Equity Balance on 12/31/11 31,921 Required: 1. Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also separate the current liabilities from the non-current liabilities and provide a total for each. 2. Using the Balance Sheet from your answer above, calculate the Current Ratio and Return on common stockholders? equity ratio. (Make sure to show all your work). (Points : 36) 2. (TCO B) The following selected data was retrieved from the Wal-Mart, Inc. financial statements for the year ending January 31, 2013: Accounts Payable $38,080 Accounts Receivable 6,768 Cash 7,781 Common Stock 3,952 Cost of Goods Sold 352,488 Income Tax Expense 7,981 Interest Expenses 2,064 Membership Revenues 3,048 Net Sales 466,114 Operating, Selling and Administrative Expenses 88,873 Retained Earnings 72,978 Required: Using the information provided above: 1. Prepare a multiple-step income statement 2. Calculate the Profit Margin, and Gross profit rate for the company. Be sure to provide the formula you are using, show your calculations, and discuss your findings/results. (Points : 36) 3. (TCO C) Please review the following real-world Hewlett Packard Statement of Cash flows and address the 2 questions below: Cash flow from operating activities In millions In millions For the year ended 2012 For the year ended 2011 Net (loss) earnings $(12,650) $7,074 Depreciation and amortization 5,095 4,984 Impairment of goodwill and purchased intangible assets 18,035 885 Stock-based compensation expense 635 685 Provision for doubtful accounts 142 81 Provision for inventory 277 217 Restructuring charges 2,266 645 Deferred taxes on earnings (711) 166 Excess tax benefit from stock-based competition (12) (163) Other, net 265 (46) Accounts and financing receivables 1,269 (227) Inventory 890 (1,252) Accounts payable (1,414) 275 Taxes on earnings (320) 610 Restructuring (840) (1,002) Other assets and liabilities (2,356) (293) Net cash provided by operating activities 10,571 12,639 Cash flows from investing activities: Investment in property, plant, and equipment (3,706) (4,539) Proceeds from sale of property, plant, and equipment 617 999 Purchases of available-for-sale securities and other investments (972) (96) Maturities and sales of available-for-sale securities and other investment 662 68 Payments in connection with business acquisitions, net of cash acquired (141) (10,480) Proceeds from business divestiture, net 87 89 Net cash used in investing activities (3,453) (13,959) Cash flow from financing activities: (Payments) issuance of commercial paper and notes payable, net (2,775) (1,270) Issuance of debt 5,154 11,942 Payment of debt (4,333) (2,336) Issuance of common stock under employee stock plans 716 896 Repurchase of common stock (1,619) (10,117) Excess tax benefit from stock-based compensation 12 163 Cash dividends paid (1,015) (844) Net cash used in financing activities (3,860) (1,566) Increase (decrease) in cash and cash equivalents 3,258 (2,886) Cash and cash equivalents at beginning of period 8,043 10,929 Cash and cash equivalents at end of period $11,301 $8,043 Required: 1) Please calculate the percentage increase or decrease in cash for the total line of the operating, investing, and financing sections bolded above and explain the major reasons for the increase or decrease for each of these sections. 2) Please calculate the free cash flow for 2012 and explain the meaning of this ratio. (Points : 36) 4. (TCO D) You are CFO of Goforit, Inc., a wholesale distribution company specializing in emerging technologies. Your CEO is a brilliant marketer, but relies on you to explain issues and choices in accounting and finance. She has heard from other members of a CEO organization to which she belongs that a company?s net income can vary widely depending on which accounting choices are made from the ?GAAP menu.? Assuming the goal is to maximize net income, choose an accounting treatment from each of the following scenarios, and explain to your CEO why the choice will produce the desired effect on reported Net Income for the current year. Include in your answer the effect of the choice on both the income statement and balance sheet. Required: a. Goforit carries significant electronics inventory in a competitive environment where prices are actually falling. Which inventory valuation method would you choose?LIFO, FIFO, or average cost? Assume that unit purchases exceed unit sales. b. Goforit has a large investment in warehouse equipment including conveyor belts, forklifts, and automated packaging systems. Which depreciation method would you choose: Straight line (SL) or double declining balance (DDB)? (Points : 36) 5. (TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below. Ratio Name Johnson & Johnson Pfizer Profit margin 16.1% 24.7% Inventory turnover ratio 3.1 1.7 Average collection period 59.4 days 69.1 days Cash debt coverage ratio .27 .16 Debt to Total assets 46.6% 127.5% Required: 1) Please explain the meaning of each of the Pfizer ratios above. 2) Please state which company performed better for each ratio. (Points : 36)
Question 2
""A number of inventors are working on new transportation methods which combine flight with driving. But even were such a new vehicle technically feasible, regulations allowed their use, and there was one or more market for them how would they be distributed? Would car dealerships stock a flying vehicle? Would it be sold through the Internet? Maybe they would be sold at airfields by the manufacturer? Maybe this would change over time as the market grew? Case Question Write a four page paper (excluding title page, references and any appendices) in which you respond to the following case question: Identify the various prospective "flying vehicles" referred to in the readings below. On page one: 1. Using the information provided and any aditional research you conduct, develop a table describing the flying vehicles discussed in terms of the attributes in which buyers are likely to be interested. (10%) 2. Include in the table the possible segments to which the flying vehicles might be targetted and below the table write a short description of each indicating the most important characteristics and requirements you believe these possible buyers might have that are particularly relevant to the distribution strategy you develop (see point 4). (10%) On Page two: 3. List and explain alternative distribution strategies and the factors which are generally important in making a channel strategy decision. (20%) On pages three and four: 4. Choose TWO flying vehicles from the table and using the information from items 1., 2., and 3. describe an appropriate distribution strategy for each one, using one page each. The two flying vehicles you select must be related to DIFFERENT SEGMENTS. In describing your proposed distribution strategies explain your reasoning for recommending them, referring to the information in the table in item 1. above as well as the map of U.S. airports accessible below and ensuring that you indicate to which segment(s) your chosen flying vehicles are targetted. (60%) Ensure that you repeat the case question shown in bold above in full and verbatim on the title page of your submission. Excluding your title and reference pages, your paper should be four pages long. Although this case question relates to channels of distribution you are expected to use both your knowledge acquired from MOD03 as well as your acquired knowledge from prior MKT301 modules. The percentages shown above indicate the importance graders will place on the various sections in determining a grade, assuming all sections are fully completed. However do not assume that items with only 10% can be omitted, or only partially completed as these form the basis for item 4, i.e. if they are poorly done item 4 will be affected. Lower weightings are assigned when the work involved is largely descriptive rather than involving analysis or depth or breadth or critical thinking. CASE EXPECTATIONS Use information from the background readings as well as the case articles and any good quality sources you can find. Please cite all sources and provide a reference list at the end of the paper. The following will be assessed in particular: Your demonstrated understanding of the marketing concepts central to the case question. Your identification of relevant criteria consumers will use for assessment of the product and development of a simple segmentation scheme. Your demonstrated understanding of factors related to the development of a distribution strategy through the analysis you conduct and their use in the context of the case. The criteria used for assessment will be those explained on the MOD01 Home page, namely: Focus. Breadth. Depth. Critical thinking. Effective and appropriate communication skills. Readings Begin your analysis by reading the following sources: Kenter P. 2007 The evolution of the flying car; [Final Edition]. Leader Post. Regina, Sask.: Jul 26. Viewed using Proquest database February 20, 2010. CBSNews.com 2007 Flying cars ready to take off Bob Simon talks to inventors who build personal flying machines. April 17. Viewed using Proquest database February 20, 2010. Vella, M. 2008 ICON: the people's plane Businessweek.com, Innovation. June 12th. Viewed February 20, 2010 at Businessweek.com. Chordas, L.. 2009, October. Flying High. Best's Review, 110(6), 128. Retrieved February 20, 2010, from ABI/INFORM Global. (Document ID: 1882783181). Meg Jones. 2009, August 9. It's a car, it's a plane ...it's a motorcycle? It's all up in the air. Sunday Gazette - Mail,C.6. Retrieved February 20, 2010, from ProQuest Newsstand. (Document ID: 1825461271). Mapmuse.com. Airports Locations - Map or Directory Locator. Viewed at http://find.mapmuse.com/interest/airports February 20, 2010, accessed by clicking here. " "
Question 5
Fresh New Work Only Please Cliff Swatner is single, 33, and owns a condominium in New York City worth $250,000. Cliff is an attorney and doing well financially. His income last year exceeded $90,000, and he has sufficient liquid assets to supplement his condominium and other tangible assets. Several years ago, Cliff began investing in stocks and bonds. He made his selections on the basis of articles he read describing good investment opportunities. Some have worked well for Cliff, but others have not. Cliff has never taken the time to evaluate his portfolio performance, but he feels it isn't very good. Cliff currently has about $90,000 invested. He has been dating a woman lately and hopes to marry her in three years, at which time he will need $20,000 for marriage expenses and a honeymoon. Cliff's only other objective is to accumulate funds for retirement, but he does not have a specific dollar target for this goal. Cliff feels that he has a moderate risk-tolerance level. 1.Explain some disadvantages of Cliff's current investment approach. 2.Construct a portfolio for Cliff, limiting your selections to 5 mutual funds (assume that he sells his current stock and bond holdings). Make sure your plan indicates specific dollar amounts for each portfolio component. Make sure your plan also explains your selections for each portfolio component. Visit an investment firm that deals in mutual funds, such as, Vanguard.com, AmericanCentury.com, Fidelity.com, etc. and select 5 mutual funds that will diversify Cliff?s portfolio. Record the fund name, ticker symbol, 5 year average annual returns (can use 3 year if 5 year is unavailable), the amount to be invested in each fund, and the amount returned in 3 years using the 5 years average annual return for the wedding. 3.Explain how Cliff should periodically rebalance his portfolio, indicating how frequently rebalancing should be done. SHOW ALL WORK FOR EACH ASSIGNMENT AND EXPLAIN EACH STEP CAREFULLY
