(five points) Question 2: Determine the total costs of direct materials for August purchases. (five points) Problem 2 - Russell Company has the following projected account balances for June 30, 20X2: Accounts payable | $40,000 | Sales | $800,000 | Accounts receivable | 100,000 | Capital stock | 400,000 | Depreciation, factory | 24,000 | Retained earnings | ? | Inventories (5/31 & 6/30) | 180,000 | Cash | 56,000 | Direct materials used | 200,000 | Equipment, net | 240,000 | Office salaries | 80,000 | Buildings, net | 400,000 | Insurance, factory | 4,000 | Utilities, factory | 16,000 | Plant wages | 140,000 | Selling expenses | 60,000 | Bonds payable | 160,000 | Maintenance, factory | 28,000 | Question 1: Calculate the budgeted net income for June 20X2. (five points) Question 2: Calculate the budgeted total assets as of June 30, 20X2. (five points) Problem 3 - Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations.
Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Answer Equity multiplier Asset /equity = 2.5/1 A=L+E 2.5=1.5=+1 Debt/asset = 1.5/2.5 = .6 3-3 Market/Book Ratio Winston Washers’s stock price is $75 per share. Winston has $10 billion in total as- sets.
Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Answer Equity multiplier Asset /equity = 2.5/1 A=L+E 2.5=1.5=+1 Debt/asset = 1.5/2.5 = .6 3-3 Market/Book Ratio Winston Washers’s stock price is $75 per share. Winston has $10 billion in total as- sets.
What is its ROE? ROE= profit margin*asset turnover*equity multiplier Asset turnover 3%= sales $100 million/$50 assets=2 equity multiplier=2 3%*2*2=12 3-6 Du Pont Analysis Donaldson & Son has and ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company’s total assets turnover? What is the firm’s equity multiplier? ROA= 10%; Profit Margin =2%; ROE= 15% 10/2= S/TA=5 15/10=
• debit to Allowance for Doubtful Accounts for $3,300. Multiple Choice Question 182 The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days? • 60.8 • 96.1 • 36.5 • 48.7 Find the final exam answers here ACC 291 Final Exam Answers Multiple Choice Question 119 Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer.
Additional costs were 20% of buying costs. What was Ahmed’s net income? A) −AED 38 Loss B) AED 38 Profit C) AED 38 Loss D) AED 610 Profit 6. EMAAT's monthly stock prices for the last year are shown below. Jan | 20 | Apr | 23 | July | 22 | Oct | 24 | Feb | 23 | May | 22 | Aug | 23 | Nov | 23 | Mar | 25 | June | 21 | Sept | 24 | Dec | 32 | The mean, median, and mode stock price are, in that order, are A) 23.5, 23.5, 23.
b. Compute sales volume in dollars to produce an after-tax net income of $108,000. Answer: a. $1,350,000 x 0.30 = $405,000 b. $108,000/0.60 = $180,000 ($180,000 + $405,000) / 0.3 = $1,950,000 3. Furniture, Inc., sells lamps for $30.
Reporting Intercorporate Interests (Equity vs Cost Method) 1. On January 1, 2007, Rotor Corporation acquired 30 percent of Stator Company’s Stock for $150,000. On the acquisition date, Stator reported Net assets of $450,000 valued at historical cost and %500,000 stated at fair Value. The difference was due to the increased value of buildings with a remaining life of 15 years. During 2007 and 2008 Stator reported Net Income of $25,000 and $15,000 and paid dividends $10,000 and $12,000, respectively.
The Unit Contribution Margin had to be figured out first: Unit CM = Selling Price per Unit – Variable Expenses per Unit Unit CM = 30.00 – 18.00 = 12.00 Then, Unit Sales to Attain the Target Profit = Target Profit + Fixed Expenses/Unit CM Target Profit = $0 because of break-even analysis Fixed Expenses = 150, 000 Unit CM = 12.00 Unit Sales to Attain the Target Profit = 0 + 150,000/12.00 = 12, 500 unit sales Then, Sales = Selling Price per Unit x Quantity Sold = P x Q = 30.00 x 12, 500 = $375,000 in dollar sales. If 12,000 pairs of shoes are sold within the year, Shop 48’s net loss would be $6000 due to the fact that the break-even point is having unit sales of 12, 500. The company is even considering paying the store manager an additional commission, an incentive commission of 75 cents. If this change is made, the new break-even point will be 13, 333 in unit sales and $399,990 in dollar sales. Another alternative being considered is paying the store manager a 50 cent commission on each shoe sold in excess of the break-even point.
PNB Industries has 20 million shares of common stock outstanding with a market price of $18.00 per share. The company also has outstanding preferred stock with a market value of 50 million, and $500,000 bonds outstanding, each with face value $1,000 and selling at 97% of par value. The cost of equity is 15%, the cost of preferred is 12% and the cost of debt is 8.50%. If PNB’s tax rate is 40%, what is the WACC? Ans – 9.47% 3.