9. Given: wages, salaries, and fringe benefits = $7.2 trillion; interest = $550 billion; profits = $300 billion; rent = $50 billion; indirect business taxes = $400 billion; and depreciation = $600 billion. Find National Income, NNP, and GDP. 10. Given: Consumption = $5.8 trillion; investment = $1 trillion; government spending = $1.2 trillion; indirect business taxes = $300 billion; imports = $650 billion; and exports = $550 billion.
Capital | + | EarnedCapital | Rev-enues | – | Expen-ses | = | NetIncome | Purchase $10,000 of inventory on credit | | | +10,000(Inventory) | = | +10,000(AP) | | | | | | – | | = | | Sell all inventory for $18,000 on account | | | +18,000(AR)-10,000(Inventory) | = | | | | | +8,000(Retained Earnings) | +18,000(Sales) | – | +10,000(COGS) | = | +8,000 | Collect $4,000 cash for accounts receivable | +4,000 | | –4,000(AR) | = | | | | | | | – | | = | | Pay $6,000 cash toward accounts payable | –6,000 | | | = | –6,000(AP) | | | | | | – | | = | | Topic: Using the Financial Statements Effects Template – Balance Sheet Only 2. Record the following transactions in the financial statements effects template below. a) Founder contributes $12,000 in cash in exchange for common stock. b) Obtain $18,000 short-term bank loan. c) Purchase equipment costing $14,000
J. Premium offers outstanding- Current Liability K. Discount notes payable- Current Liability L. Employee payroll deductions unremitted- Current Liability M. Current maturities of long-term debts to be paid from current assets- Current Liability N. Cash dividends declared but unpaid- Current Liability O. Dividends in arrears on preferred stock- Footnote disclosure P. Loans from officers- Current Liability 13-2. Accounts and Notes Payable * The following are selected 2012 transactions of Darby Corporation. Sept. 1 | Purchased inventory from Orion Company on account for $50,000.
(a) The issuance of the bonds. Divac(1) Cash $300,000 Bonds Payable $300,000 Verbitsky(2) Cash 204,000 Bonds Payable 204,000 Interest Expense 4,000 (200,000 x .12 x 2/12) (b) The payment of interest on July 1. (1)Interest Expense 13,500 (300000 x .09 x ½) Cash 13,500 (2)Interest Expense 12,000 (200000 x .12 x ½) Cash 12,000 (c) The accrual of interest on December 31. (1)Interest Expense 40,000 Interest Payable 40,000 (2)Interest Expense 13,500 Interest Payable 13,500 E14-7 (Amortization Schedules—Straight-Line) Spencer Company sells 10% bonds having a maturity value of $3,000,000 for $2,783,724. The bonds are dated January 1, 2012, and mature January 1, 2017.
Cash flow per share= $3.00 Price /cash flow ratio= 8.0 8.0 x 3.00 = $24.00 $24.00 / $1.50 = 16 (P/E) 3-5 ROE $100millions (sales) x 3% (profit margin) = $30 million (Net income) Net Income/assets= ROE $30 millions/$50 millions (total assets) = 6% 6% x 2.0 (equity multiplier) = 12% (ROE) 3-6 Du Pont Analysis ROA=10% Profit margin= 2% ROE= 15% ROA x Equity Multiplier= ROE (Profit Margin) (Total asset turnover)= ROA 10/2=5 (this is the firm’s total asset turnover) 15/10=1.5 (this is the firm’s equity multiplier) 3-7 Current and Quick Ratios Current assets= $3 million Current ratio= 1.5 Quick ratio= 1.0 Current assets/ Current liability= current ratio $3million/1.5= $2 million (level of current liability) Current Assets - Current Liability= Inventory $3millions – $2 millions = $1 million (level of
| | | | (40-50 min.) P 12-42B Req. 1 Georgia Optical Corporation | Balance Sheet | December 31, 2012 | ASSETS | LIABILITIES | Current assets: | | Current liabilities: | | Cash | $ 49,000 | Accounts payable | $ 33,000 | Accounts receivable, net | 107,000 | Accrued liabilities payable | 15,000 | Inventory | 106,000 | Dividends payable | 6,000 | Prepaid expenses | 14,000 | Total current liabilities | $54,000 | Total current assets | $276,000 | Long-term liabilities: | | | | Long-term note payable | 103,000 | Long-term assets: | | Total liabilities | 157,000 | Property, plant, and | | | | equipment, net | 277,000 | STOCKHOLDERS’ EQUITY | | | | Paid-in capital: | | Intangible assets: | | Preferred stock, 5%, $14 par, 50,000 shares | | Goodwill | 61,000 | authorized, 7,000 shares issued | 98,000 | | | Common stock, $4 par, 125,000 shares | | | | authorized, 25,000 shares issued | 100,000
Net working capital | Year 1 | Year 2 | Year 3 | Year 4 | | Inventory | 1,5 | 1,5 | 1,5 | | All in millions | receivables | 16,5 | 12,45 | 8,25 | | | payables | 1,6 | 1,6 | 1 | | | NWC(=Inventory+receivables-payables) | 16,4 | 12,35 | 8,75 | | | Change in NWC | 16,4 | -4,05 | -3,6 | -8,75 | | Q6. FCF = (Revenue – Costs – Depreciation) x (1 – tax rate) + Depreciation – Capital Expenditure – change in working capital. Free cash flows | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | | Unl Net income | -59,3439 | 70,1337 | 49,3248 | 30,828 | 0 | All in millions | Depreciation | 0 | 8 | 8 | 8 | 0 | | Capital expenditures | 24 | 0 | 0 | 0 | 0 | | Change in NWC | 0 | 16,4 | -4,05 | -3,6 | -8,75 | | Free cash flows | -83,34 | 61,73 | 61,37 | 42,43 | 8,75 | | Q7. | | Year 1 | Year 2 | Year 3 | Year 4 | | NPV per year | -83,34 | 55,12 | 48,93 | 30,20 | 5,56 | All in millions | Total NPV | 56,46 | | | | | | Q8. Rate | NPV(million) | 5% | 74,97 | 10% | 61,35 | 15% | 49,65 | 20% | 39,5 | 25% | 30,63 | 30% | 22,84 | 35% | 15,94 | 40% | 9,81 | 45% | 4,32 | 50% | -0,61 | 55% | -2,89 | 60% | -5,06
Kippling Company Bank Reconciliation July 31, 2012 Balance per bank statement, July 31 8,650 Add: Deposit in transit ($5810 - ($4500-1540)) 2,850 Deduct: Outstanding checks ($3100 - ($4000-2000)) (1,100) Correct Cash Balance $ 10,400 Balance per books, July 31 $ 9,250 Add: July note collected 1,500 Deduct: Bank Service fee $ 15 NSF Check 335 (350) Correct Cash Balance $ 10,400 (b) Prepare the general journal entry or entries to correct the Cash account. Cash 1,150 Office Expense for bank service fee 15 Account Receivable
Capital Expenditures in 1993 amounted to $450 million and working capital was 7% of revenues (which were $13,500 million). The firm had debt outstanding of $3.068 billion (in book value terms), trading at a market value of $3.2 billion and yielding a pre-tax interest rate of 8%. There were 62 million shares outstanding trading at $64 per share and the most recent beta is 1.10. The tax rate for the firm is 40%. (The treasury bond rate is 7%.)
Dividends _____. represent an expense and are an operating activity represent an obligation and are an operating activity represent a distribution of earnings and are a financing activity represent an asset and are an investing activity 3. Below is a partial list of account balances for LBJ Company: Cash $15,000 Prepaid insurance 5,000 Accounts receivable 2,500 Accounts payable 3,000 Notes payable 6,000 Common stock 10,000 Dividends 500 Revenues 15,000 Expenses 13,000 What did LBJ Company show as total debits? $34,000 $36,000 $70,000 $31,000 4. Under the accrual basis of accounting, revenues are recorded and reported _____.