Problem Set 4 1. Determining Profit or Loss from an Investment. Three years ago, you purchased 150 shares of IBM stock for $88 a share. Today, you sold your IBM stock for $103 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares.
What is its return on investment? 2. A firm has an earning before taxes of Tk.200,000. It has debt of Tk.500,000 at 10 percent interest compounded semi-annually. To what extent can its operating income decline before it is unable to meet its interest obligations?
Answer the following questions. If total assets increased $150,000 during the year and total liabilities decreased $80,000, what is the amount of stockholders' equity at the end of the year? 3. 900,000 At the beginning of the year, Gonzales Company had total assets of $870,000 and total liabilities of $500,000. Answer the following questions.
4-5 Multiyear Future Value How much would be in your savings account in eight years after depositing $150 today if the bank pays 8 percent per year? (LG4-3) FV8 = 150 × (1 + 0.07)8 150 × 1.71818618 Answer: 257.73 4-7 Compounding with Different Interest Rates A deposit of $350 earns the following interest rates: a. 8 percent in the first year. b. 6 percent in the second year.
• 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.
Three months later, Lynn sold 3,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 3,000 treasury shares, Lynn should credit a. Treasury Stock for $57,000. b. Treasury Stock for $30,000 and Paid-in Capital from Treasury Stock for $27,000.
A bond has a par value of $100,000 and pays interest revenues of $5,000 per year. This bond has a five-year life and a current market price of $98,000. Calculate the yield-to-maturity of this bond. (Points : 10) .3. An investor purchased call options for $2 per option.
During 2007 and 2008, Browser reported net income of $90,000 and $50,000 and paid dividends of $40,000 and $60,000, respectively. Fire wire reported a balance in its investment account of $230,000 on December 31, 2008. It uses the equity method in accounting for this investment. g. What is the annual amount of amortization of differential over the ten year period? h. In 2007, will Fire Wire report and increase or a decrease in the investment account balance?
The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? 50*11.44+1000*.5138 = 1086 • 5-13 Yield to Maturity and Current Yield You just purchased a bond that matures in 5 years. The bond has a face value of $1,000 and has an 8% annual coupon. The bond has a current yield of 8.21%.
Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winston’s market/book ratio? 75*800 million= $60 billion Book Value= Assets- Liabilities $10 billion in total assets- $4 billion in current liabilities and long-term debt= $6 billion in common equity Market/Book Ratio= $60 billion/$6 billion= 10 3-4 Price/Earnings Ratio A company has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0.