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?
Assume that the company will raise the needed funds using equity and future cash flows will be discounted using the weighted average cost of capital. Calculate the unlevered beta. Levered beta = 1.4 Debt = Equity = Tax rate = 20% 1.4 = b unlevered * (1+ Debt * (1-0.2)/E) Ans: 1.04 Question 2 A project costs $100,000 and provides a cash flow of $40,000 every year for the next 4 years. The discount rate is 12%. This project can be taken up today or after one year.
Memo To: John & Jane Smith From: Date: 12/2/2014 Re: Summary of various tax issues Your first question is how is the $300,000 treated for purposes of federal tax income? In Code 61(a), income derived from services is one of the listed forms of taxable income. This includes fees, commissions, fringe benefits and similar items. Since the compensation was earned this year, even though you worked on the case for two years, you will include it as ordinary income this year. You can reduce your tax liability by deducting necessary business expenses that were paid in the same
$2.4 million b. What was the company’s net cash flow? $3.4 million c. What was the company’s net operating profit after taxes (NOPAT)? $3.0 million d. What was the company’s operating cash flow? $4.0 million e. If operating capital in the previous year was $24 million, what was the company’s free cash flow (FCF) for the year?
The ex-dividend date is March 19 and there are 1 million shares outstanding. The payment date is set at March 31. Show all the necessary journal entries for this set of dividend transactions. (Points : 20) 5. The weight of common stock in a company is 50%, the weight of preferred stock is 10% and the weight of long-term debt is 40%.
Customer paid ($7,400) cash for ribbons and accessories and credit sales ($320). Cost of sales is derived from the following equation: beginning merchandise inventory ($3,300) plus purchases ($2,900) less ending merchandise inventory $4,100 equals cost of sales $2,100. Rent expense is $1,800 of $600 per month times three months. Part-time employee expenses ($1,600) is the sum of cash paid ($1510) plus amount owed ($90). The prepaid advertising ($150) was run by the local paper on April2.
• 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.
Q1 -Ocean Carriers uses a 9% discount rate. Should Ms. Linn purchase the $39 million capsize? Assume that Ocean Carriers is subject to 35% taxation To decide whether Ms. Linn should make the purchase, we conducted a Net Present Value analysis to determine the worthiness of the project taking into account the time value of future cash flows. We were given the following information: Three-year time charter starting in 2003 at a rate of $20,000 per day with an annual escalation of $200 per day. Expected inflation rate is 3%.
Income before income taxes was $965 million against $772 million a year ago. Net income attributable to the company $609 million or $1.39 per diluted share against $478 million or $1.08 per diluted share a year ago. For the year, the company reported total revenue of $99,137 million against $88,915 million a year ago. Operating income was $2,759 million against $2,439 million a year ago. Income before income taxes was $2,767 million against $2,383 million a year ago.