Answer:
Digby's Book Value: $
Book value of existing equity 85,185,000
Book value of additional equity 4,000,000
Net income 3,000,000
Digby's total book value 92,185,000
Explanation:
The book value of Digby is the aggregate of book value of existing equity, book value of additional equity issued and net income.
Hanson Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,500,000 of 5% convertible bonds outstanding during 2018. The preferred stock is convertible into 40,000 shares of common stock. During 2015, Hanson paid dividends of $.90 per share on the common stock and $3 per share on the preferred stock. Each $1,000 bond is convertible into 30 shares of common stock. The net income for 2018 was $600,000 and the income tax rate was 30%. Reference: Ref 16-5 Diluted earnings per share for 2018 is (rounded to the nearest penny) Group of answer choices
a. $2.29.
b. $2.12.
c. $2.08.
d. $2.50.
Answer:
Option (a) is correct.
Explanation:
Convertible preferred stock:
Numerator effect = 20,000 shares × $3
= $60,000
Denominator effect = 40,000 shares
Overall effect = $60,000 ÷ 40,000
= $1.50
Convertible bonds:
Numerator effect = $1,500,000 × 5% × (1 - 0.30)
= $52,500
Denominator effect = ($1,500,000 ÷ $1,000) bonds × 30 shares
= 45,000 shares
Overall effect = $52,500 ÷ 45,000
= $1.17
Tentative diluted EPS with only convertible bonds effect:
= [$600,000 - (20,000 × $3) + $52,500] ÷ (200,000 + 45,000)
= $592,500 ÷ 245,000
= $2.42
Effect of convertible preferred:
= [$592,500 + $60,000] ÷ (245,000 + 40,000)
= $2.29
The diluted earnings per share for 2018 is $2.29.
Convertible preferred stock:
Numerator effect = 20,000 shares * $3
Numerator effect = $60,000
Denominator effect = 40,000 shares
Overall effect = Numerator effect / Denominator effect
Overall effect = $60,000 / 40,000
Overall effect = $1.50
Convertible bonds:
Numerator effect = $1,500,000 * 5% * (1 - 0.30)
Numerator effect = $1,500,000 * 5% * 0.70
Numerator effect = $52,500
Denominator effect = ($1,500,000/$1,000) bonds * 30 shares
Denominator effect = 45,000 shares
Overall effect = Numerator effect / Denominator effect
Overall effect = $52,500 ÷ 45,000
Overall effect = $1.17
Tentative diluted EPS with only convertible bonds effect:
= [$600,000 - (20,000*$3) + $52,500] / (200,000 + 45,000)
= $592,500 / 245,000
= $2.42
Effect of convertible preferred = [$592,500 + $60,000] / (245,000 + 40,000)
Effect of convertible preferred = $652,500 / $285,000
Effect of convertible preferred = $2.29
Therefore, the diluted earnings per share for 2018 is $2.29.
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Hayden Company is considering the acquisition of a machine that costs $324,000. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $100,000, and annual operating income of $85,000. What is the estimated cash payback period for the machine (round to one decimal points)?
Answer:
Cash payback period= 3.2 years.
Explanation:
Lets first understand what a cash payback period is. As the name suggest, payback period is the time duration within which a business recovers it's investment and/or capital investment and the payback period is expressed in number of years. The formula for payback period is as follows:
Payback period= initial investment ÷ annual cash-flows
In the question annual operating income is given just for distraction.
payback period = $324000 ÷ 100000
payback period= 3.2 years.
This means if Hayden company decides to invest in the machine, it would recover the cost of machine (i.e it's investment) in approximately three and half years.
Amdahl, Inc. leases a piece of equipment from BFF on January 1, 2018. The lease agreement calls for 5 annual payments of $33,000 to be paid by Amdahl at the beginning of the year (starting with 2018). Ownership of the equipment will transfer to Amdahl at the end of the fifth year. The explicit rate on this lease is 8%.
1. Prepare Amdhal's journal entries on January 1, 2018.
Answer:
See explainations below
Explanation:
There will be changes in both balance sheet and income statement:
1. Balance sheet:
At, January 1, 2018 both asset and liability will increase by the amount equal to present value of all lease payments:
Present value of all lease payments = 33,000 + 33,000/(1 + 8%) + ... + 33,000/(1 + 8%)^4 = 142,300.19
2. Profit and loss statement:
At, January 1, 2018 interest expense will increase by the amount equal to present value of all lease payments multiplied by the interest rate, or: 142,300.19 x 8% = 11,384.01
Prepare entries to record the following transactions and events related to Mason County property taxes for the year beginning January 1, 2015.a) To raise property tax revenues of $940,000, the County sends bills to property owners totaling $945,000. This will provide a $5,000 allowance for uncollectible taxes. The County makes no provision for possible tax refunds.b) Shortly after receiving his $5,000 tax bill, Harry appeals his assessment. His tax bill is reduced by $1,000. He then pays the remaining $4,000 that is due.c) Mason County receives $900,000 in cash from taxpayers who make timely payment on their taxes.d) Brown's home is destroyed by a fire; he declares bankruptcy and the County writes off his $3,000 tax bill as uncollectible.e) Smith and Wesson, who received bill totaling $8,000 are unable to pay on time. The County bills them $300 for interest. They subsequently pay the taxes plus interest.f) At year end, the County declares all unpaid property taxes to be delinquent. Interest and penalties amounting to $1,500 is assessed against the delinquent taxpayers.g) The County decides to increase its Allowance for Uncollectible Taxes by $3,000
Answer:
Please see attachment
Explanation:
Please see attachment
Detailed explanation of recording transactions related to property taxes for Mason County in 2015.
Property Taxes Transactions:
a) To raise property tax revenues of $940,000, the County sends bills totaling $945,000 with a provision of $5,000 for uncollectible taxes. b) Harry's tax bill is reduced by $1,000 due to an appeal, and he pays the remaining $4,000. c) $900,000 in cash is received from taxpayers. d) Brown's $3,000 tax bill is written off as uncollectible. e) Smith and Wesson pay $8,000 in taxes plus $300 interest. f) $1,500 in interest and penalties assessed on delinquent taxpayers. g) Allowance for Uncollectible Taxes is increased by $3,000.
As a senior consultant, part of your role on the team is to approve final client reports before they are delivered to the client. Your team was recently hired by the President of the sales division of Plessy and Grouper, a consumer packaged goods company, to address poor customer service within the division. Your consulting team just submitted the draft of a recommendations report. While it’s full of good content, it also contains a lot of technical jargon. Which of the following aspects of effective communication do you fear your team has overlooked?
Select: 1
Length of the report.
Using facts to support the recommendations.
Analysis of client’s knowledge.
Structuring the main ideas in way that sells your ideas.
Final answer:
The consulting team may have overlooked the importance of analyzing the client's knowledge, as their report contains much technical jargon, indicating a lack of tailoring to the audience's understanding. Effective communication requires the information to be accessible, well-organized, and presented considering the rhetorical situation to provide productive feedback.
Explanation:
The consulting team tasked with addressing poor customer service at Plessy and Grouper seems to have overlooked the analysis of client's knowledge aspect of effective communication. While the report may be rich in content, the abundance of technical jargon suggests that it may not be easily understood by all stakeholders, possibly because it was not tailored to the audience's level of expertise or their informational needs. Effective reports should be tailored to the audience's understanding, avoiding intricate jargon unless the audience is thoroughly familiar with the terminology.
Moreover, such a report should also focus on being well-organized and concise to ensure that the client can easily digest the information. Considering the rhetorical situation and the readers' needs and expectations are pivotal when crafting a report. Following a clear structure, utilizing visual aids, and presenting information in an accessible manner are key elements that contribute to the delivery of productive feedback and facilitate the acceptance of the recommendations presented.
If you borrow capital to start a business and the money is provided interest-free, then your cost of capital is zero.
a. True
b. False
Answer:
If you borrow capital to start a business and the money is provided interest-free, then your cost of capital is zero.
True
Explanation:
Reason being that it does not take any cost to secure such capital i.e no interest, then there is no cost for such capital
A risk-averse person has a. a utility function whose slope gets flatter as wealth rises. This means they have increasing marginal utility of wealth. b. a utility function whose slope gets flatter as wealth rises. This means they have diminishing marginal utility of wealth. c. a utility function whose slope gets steeper as wealth rises. This means they have increasing marginal utility of wealth. d. a utility function whose slope gets steeper as wealth rises. This means they have diminishing utility of wealth.
Answer:
B
Explanation:
A risk-averse person is one who would rather spend or invest in a business with known risks and expect lower profits than a business with unknown or high risks but has higher returns.
Hence, as the wealth of the person increases, his marginal utility decreases as the utility at smaller wealth is relatively higher than that utility at large wealth.
This fulfills the law of diminishing marginal utility which states that as income or wealth increases, the marginal utility or satisfaction decreases.
As the change in utility or marginal utility is decreasing, hence the slope of utility flattens out as its rate decreases.
The times (in minutes) that several underwriters took to review applications for similar insurance coverage are 50, 230, 52, and 57. What is the median length of time required to review an application?
a. 54.5
b. 141.0
c. 97.25
d. 109.0
Answer:
a. 54.5
Explanation:
The computation of the median length of time required is shown below:
= (52 + 57) ÷ 2
= 109 ÷ 2
= 54.5
Simply we first add the 52 and 57 and then divide it by 2 so that the accurate median length of time can come
All other time which is mentioned is irrelevant. Hence, ignored it i.e 230 and 50 insurance coverage as this is not a part of the computation so we do not considered it
In its first month of operation, Kingbird, Inc. purchased 320 units of inventory for $9, then 420 units for $10, and finally 360 units for $11. At the end of the month, 400 units remained. The company uses the periodic method. Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO.
Answer:
$680
Explanation:
Using the FIFO method
Closing Stock = [ 360 × $11 ] + [ ( 400 - 360 ) × $10 ]
= $3,960 + $400
= $4,360
Using the LIFO method
Closing Stock = [ 320 × $9 ] + [ ( 400 - 320 ) × $10 ]
= $2,880 + $800
= $3,680
Therefore,
The amount of Phantom Profit
= Closing Stock using the FIFO method - Closing Stock using the LIFO method
= $4,360 - $3,680
= $680
The Arndt Company repurchased 50,000 shares of its own common stock on the stock exchange during 2019. At the end of 2018, Arndt had 750,000 shares of its common stock outstanding, During 2019, no preferred dividends were paid but $350,000 of dividends were paid on common stock. Net income for 2019 was $3,300,000. Which of the following is NOT true for 2019 based only on the above information? a. Earnings per share would be calculated using 350,000/750,000. b. Stockholders equity would decrease because of the dividends paid. c. Earnings per share for 2019 is higher because of the stock repurchase than if the purchase had not been made. d. The purchase of treasury stock will reduce cash during 2019.
Answer:
The answer is a. Earnings per share would be calculated using 350,000/750,000.
Explanation:
Please find the below for explanations:
The EPS is calculated as Net income for 2019 / Average stock outstanding or 3,300,000/ [( 750,000 + 700,000) /2] = 3,300,000/725,000 = $4.55. Thus, (a) is not a correct statement.
b is correct because once dividend paid out, retained earnings account will decrease causing Stockholder equity to decrease.
c is correct because stock repurchase will lower the Average Stock Outstanding which will rise the EPS in comparison to the scenario where stock repurchase is not made.
d is correct because repurchase are usually made by cash.
Oscar's Flower Shop maximizes profits by hiring four workers in a perfectly competitive labor market. The workers and their value of the marginal product of labor are Noe, $40; Barbara, $35; Calvin, $27; and Diana, $15. According to the marginal productivity theoryof income distribution, which of the following statements is TRUE?
A)In equilibrium, each worker is paid his or her value of the marginal product of labor.
B)Each worker is paid a wage equal to the highest value of the marginal product of labor(i.e., $40).
C)Each worker is paid $15.
D)We need to know the product price before we can figure out the wage rate.
Answer: A. In equilibrium, each worker is paid is or her value of marginal product of labour.
Explanation:
Marginal productivity of income distribution refers to the additional revenue derived from the marginal unit of product produced and that wages should be equal to the marginal revenue derived from the production of additional or marginal product and this is achieved at equilibrium.
The theory also implies that workers should not be paid below or above the marginal revenue derivable from marginal product which implies they cannot be paid $15 or $40, moreover the product price is not a determinant of wages rate.
In equilibrium, each worker is paid his or her value of the marginal product of labor.
Explanation:According to the marginal productivity theory of income distribution, wages are determined by the marginal product of labor. Therefore, the correct answer to your question is option A: In equilibrium, each worker is paid his or her value of the marginal product of labor. In the context of your question, this means Noe is paid $40, Barbara $35, Calvin $27, and Diana $15, reflecting each's respective marginal productivity.
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Based only on the knowledge that the premerger market share of two firms proposing to merge was 30 percent each, an economist working for the Justice Department was able to determine that, if approved, the postmerger HHI would increase by 1,800. Which of the following equations is a general rule explaining how the Herfindahl-Hirschman index is affected when exactly two firms (Firm i and Firm j) in the market merge, where Si is the market share of firm i and Sj. is the market share of firm j? (Hint: Compare a2 + b2 with (a + b)2.)
The general rule for how the Herfindahl-Hirschman Index (HHI) is affected when two firms merge is calculated using the formula HHI Change = 2 * Si * Sj, where Si and Sj are the market shares of the merging firms.
Explanation:The equation that explains how the Herfindahl-Hirschman Index (HHI) is affected when two firms in the market merge, using their market shares Si and Sj, is:
HHI Change = 2 * Si * Sj
Considering that the premerger market share of each firm was 30%, and Si equals Sj, the equation becomes:
HHI Change = 2 * Si * Si
Given that we know the HHI will increase by 1800, we have:
1800 = 2 * Si * Si
1800 = 2 * (30)^2
1800 = 2 * 900
1800 = 1800
This confirms that the formula for the change in HHI due to a merger of two firms with market shares Si and Sj is 2 * Si * Sj, since it accurately predicts the change in HHI in this case.
Which of the following directly influences an employee's voluntary behavior and performance?
A.Role perceptions
B. Moral intensity
C. Corporate social responsibility
D. Uncertainty avoidance
E. Income
Answer:
Letter A. Role perceptions.
Explanation:
Role perception is the main factor that impacts an employee's behavior and voluntary performance, as individual perceptions are responsible for determining a person's set of actions and behaviors in a given situation. It is influenced by the set of values, experiences, emotional and social interaction with society.
Therefore, the perception of their role in the organization will directly influence their performance. Ideally, it should be determined with ethical and normative bases that benefit the employee and help in self-motivation and self-accomplishment of the work.
Champs Sports Bar, State College, PA, has decided to perform a total cost analysis on its vodka supplier in order to cut costs. Consumption is currently 6,000 bottles per year. This demand is predicted to stay at this level for the next few years. The current source, Byron's, charges $9.25 per bottle and can pack 500 bottles in a crate. The cost to ship the crate is $5. Another potential source of vodka is Pancho. Pancho charges $9.20 per bottle and can ship 100 bottles in a crate. Assume that a partial crate may be purchased. Champs Sports Bar will incur equal total costs if Pancho can hold annual shipping price per crate at _____.
Answer:
Champs Sports Bar will incur equal total costs if Pancho can hold annual shipping price per crate at $6
Explanation:
Current consumption = 6000 per year
Byron's Charge
Cost of 1 bottle = $9.25
1 crate contains 500 bottles
6000 bottles would be contained in 12 crates (6000 ÷ 500 = 12)
Cost of 1 crate = $9.25 × 500 = $4625
Shipping price per crate = $5
Cost of 1 crate + shipping price per crate = $4625 + $5 = $4630
Total cost to ship 12 crates (6000 bottles) = 12 × $4630 = $55560
Pancho's charge
Cost of 1 bottle = $9.20
I crate contains 100 bottles
6000 bottles would be contained in 60 crates (6000 ÷ 100 = 60)
Cost of 1 crate = $9.20 × 100 = $920
Let the shipping price per crate be y
Cost of 1 crate + shipping price per crate = ($920 + y)
Total cost to ship 60 crates = 60($920 + y)
To solve for y, equate the two total costs
60($920 + y) = $55560
Divide both sides by 60
$920 + y = $926
y = $926 - $920 = $6
Champs Sports Bar will incur equal total costs if Pancho can hold annual shipping price per crate at $6.
If the United States is currently importing 14 million barrels of crude oil per day at a world price of $4.00 per unit (the entire amount consumed), how much tax revenue is generated from an import fee equal to $8.00 per unit?
Answer:
20 million dollars
Explanation:
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Which of the following costs is relevant to a make-or-buy decision of a particular part of a product? a.The depreciation on the plant used to manufacture the part b.The fixed annual rent paid for the office building c.The direct labor costs used to manufacture the part d.The salary of the sales manager who sells the product
Answer:
Correct answer is C
Explanation:
Direct labor cost is a relevant expense that is to be considered in a make or buy decision making process. It is important that the manager will know the alternative that will give lower relevant cost which will cause an increment to the company’s net profit. Direct labor cost is a variable cost that will vary on the production that is about to produce if the company will consider to make the product.
Suppose your company sells goods for $340, of which $220 is received in cash and $120 is on account. The goods cost your company $133 and were paid for in a previous period. Your company also recorded salaries and wages of $90, of which only $34 has been paid in cash. Record the sales revenue of $200 for cash and $100 on account and record the cost of goods sold of $125 using one journal entry 2. Record the salaries and wages expense of $70. journal entry has been entered
Answer:
The Journal entries are as follows:
(1) Cash A/c Dr. $200
Account receivable A/c Dr. $100
Cost of goods sold A/c Dr. $125
To sales revenue $300
To Inventory $125
(To record the sales revenue)
(2) Salaries and wages expenses A/c Dr. $90
To Cash $34
To salaries and wages payable $56
(To record the salaries and wages expense of $90)
To record the sales revenue and cost of goods sold, a journal entry can be created combining the two transactions. Additionally, the salaries and wages expense can be recorded in a separate journal entry.
Explanation:To record the sales revenue of $200 for cash and $100 on account, and record the cost of goods sold of $125 using one journal entry, you can create the following entry:
Date: [Date]
Account Debit Credit
Cash $200
Accounts Receivable $100
Sales Revenue $300
Cost of Goods Sold $125
Inventory $125
To record the salaries and wages expense of $70, you can create the following entry:
Date: [Date]
Account Debit Credit
Salaries and Wages Expense $70
Cash $34
Accounts Payable $36
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The XYZ Company expects stock prices to increase. The current stock price is $37. The company purchases a call option, with an exercise price of $40 and a premium of $2 per share. Just before the expiration, stock price rises to $44. Should the investor exercise the call option or not? What will the total payoff per share be?
Answer:
Payoff per share = $4
Profot pershare = $2
Explanation:
In a call option, the long (the party that buy the put) will have gain on the option when the underlying asset price is higher than the excercise price of that asset (imagine the advantage that you can buy an apple at $10 when its market price is $12). Because the stock price is $44, higher than exercise price of 40, so the company should exercise the call. Total payoff per share is 44 - 40 = $4 (and profit per share = 4 - 2 = $2) .
Note: We dont include premium to buy the call here because the question asking about payoff. We on include premium in calculations when the question is about profit.
Brandi recently began a new position as VP Sales for Otis Elevatos, a large firm selling new equipment for new construction, replacement elevators for existing buildings, and service contracts to maintain elevators. Otis Elevators sales representatives typically work closely with construction engineers and electrical contractors on new construction projects to determine the best placement and type of elevator to install to ensure efficient and safe operation. Which factor favoring the use of personal selling relates to this activity?
Answer: technical complexity
Explanation: In simple words, technical complexity refers to the arrangement in which an issue or a task is difficult to do due to its difficult to understand relationship between its internal variables.
Personal selling refers to the process in which an organisation hires some sales personnel who by using their ability and expertise tries to persuade the potential customer to buy the product.
Personal sling is used by the organisations where the product to be sold is technically complex to use as the salesperson can himself or herself educate the customer of how to use the product for maximum benefit.
Your pro forma income statement shows sales of $ 1 comma 023 comma 000, cost of goods sold as $ 483 comma 000, depreciation expense of $ 104 comma 000, and taxes of $ 174 comma 400 due to a tax rate of 40 %. What are your pro forma earnings? What is your pro forma free cash flow? Complete the pro forma income statement below: (Round to the nearest dollar.)
Sales $
Cost of Goods Sold $
Gross Profit $
Depreciation $
EBIT $
Taxes (40%) $
Earnings $
Answer:
This question require us to complete the pro forma income statement given in the question. The complete income statement pro forma is given below.
Sales $ $ 1,023,000
Cost of Goods Sold $ ($ 483,000)
Gross Profit $ $ 540,000
Depreciation $ ($ 104,000)
EBIT $ $ 436,000
Taxes (40%) $ ($ 174,400)
Earnings $ $ 261,600
Pro forma earning is 261,600.
Cash flow will be Earning + Depreciation = 261,000 + 104,000 = $ 365,000.
On January 1, 2019, Sheffield Corp. had the following stockholders' equity accounts. Common Stock ($12 par value, 81,300 shares issued and outstanding) $975,600 Paid-in Capital in Excess of Par Value-Common Stock 188,000 Retained Earnings 503,000 During the year, the following transactions occurred. Jan. 15 Declared a $1.00 cash dividend per share to stockholders of record on January 31, payable February 15. Feb. 15 Paid the dividend declared in January. Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $16 per share. May 15 Issued the shares for the stock dividend. July 1 Announced a 2-for-1 stock split. The market price per share prior to the announcement was $14. (The new par value is $6.) Dec. 1 Declared a $0.70 per share cash dividend to stockholders of record on December 15, payable January 10, 2020. Dec. 31 Determined that net income for the year was $220,000.
Answer:
In attachment.
Explanation:
In attachment.
Final answer:
The student's question pertains to the effects of corporate actions like cash dividends, stock dividends, and stock splits on Sheffield Corp's stockholders' equity in 2019. Such actions change both balances within the equity section of the balance sheet and the per-share values.
Explanation:
The question involves calculating the effects of various corporate actions on stockholders' equity, including cash dividends, stock dividends, and stock splits for Sheffield Corp throughout 2019. Each of these actions alter the composition of the equity accounts and the per-share values and need to be accounted for properly.
Cash Dividend on Jan 15 and Feb 15
The company declared and paid a $1.00 cash dividend on 81,300 shares, resulting in a total reduction of $81,300 in retained earnings.
Stock Dividend on Apr 15 and May 15
A 10% stock dividend when the share price was $16 means 8,130 new shares were distributed. The value of these shares ($16 * 8,130) is $130,080, which increases the common stock account by the par value of the new shares ($12 * 8,130 = $97,560) and the remaining $32,520 ($130,080 - $97,560) is transferred from retained earnings to the paid-in capital in excess of par value.
Stock Split on July 1
A 2-for-1 stock split doubles the number of shares to 162,600 and halves the par value to $6. It does not affect the overall value of the stockholders' equity, but it does change the per-share amounts listed in the equity accounts.
Year-end Activities
The declaration of a $0.70 per share cash dividend in December further reduces retained earnings by $56,910 (81,300 shares according to the question, but this is likely intended to be 162,600 shares post-split). Finally, the addition of the net income of $220,000 for the year increases the retained earnings.
A partnership has the following account balances: Cash $50,000; Other Assets $600,000; Liabilities $240,000; Nixon, Capital (50 percent of profits and losses) $200,000; Hoover, Capital (20 percent) $120,000; and Polk, Capital (30 percent) $90,000. Each of the following questions should be viewed as an independent situation: Grant invests $80,000 in the partnership for an 18 percent capital interest. Goodwill is to be recognized. What are the capital accounts thereafter? Grant invests $100,000 in the partnership to get a 20 percent capital balance. Goodwill is not to be recorded. What are the capital accounts thereafter?
Answer:
a) Nixon 200,000
Hoover 120,000
Polk 90,000
Grant 90,000
500,000
b)
Nixon $ 195,000.00
Polk $ 117,000.00
Hoover $ 88,000.00
Grant $ 100,000.00
$ 500,000.00
Explanation:
Nixon Capital 200,000
Hoover Capital 120,000
Polk Capital 90,000
If grants invest for 80,000 and get 18% then:
80,000 / 0.18 = 444,444 value of the company
200,000 + 120,000 + 90,000 + 80,000 = 490,000 capital after
As the value of the company is lower the new partner is providing goodwill to the company that's why there is a goodwill to be recognized.
Grant investemnt = 18% ( original capital + contribution + goodwill)
80,000 + goodwill = 0.18(410,000 + 80,000 + goodwill)
goodwill - 0.18 goodwill = 88,200 - 80,000
goodwill = 8,200 / (1 - 0.18) = 10,000
Grant investment: 80,000 cash + 10,000 goodwill
If invest 100,000 and no goodwill:
100,000 / 0.20 = 500,000
then new capital:
410,000 + 100,000 = 510,000
Difference: 10,000
As no goodwill is recognized the assets weere overvalued and we must recognize a loss:
10,000 x 50% = 5,000 Nixon
x 30% = 3,000 Polk
x 20% = 2,000 Hoover
In the first situation, the capital accounts would be Nixon Capital ($200,000), Hoover Capital ($120,000), Polk Capital ($90,000), and Grant's Capital ($73,800). In the second situation, the capital accounts would be Nixon Capital ($200,000), Hoover Capital ($120,000), Polk Capital ($90,000), and Grant's Capital ($100,000).
Explanation:In the first situation, Grant invests $80,000 in the partnership for an 18 percent capital interest. To calculate the capital accounts thereafter, we first need to determine the total capital balance before Grant's investment. The total capital balance is obtained by summing up the capital accounts of all partners: Nixon Capital ($200,000) + Hoover Capital ($120,000) + Polk Capital ($90,000) = $410,000. Grant's capital interest based on his $80,000 investment would be 18% of $410,000. The capital accounts thereafter would be: Nixon Capital ($200,000) + Hoover Capital ($120,000) + Polk Capital ($90,000) + Grant's Capital ($73,800).
In the second situation, Grant invests $100,000 in the partnership for a 20 percent capital balance. Since goodwill is not recorded, we can directly allocate the $100,000 investment to Grant's capital account. The capital accounts thereafter would be: Nixon Capital ($200,000) + Hoover Capital ($120,000) + Polk Capital ($90,000) + Grant's Capital ($100,000).
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Suppose Presented below is 2022 information for for PepsiCo, Inc. and The Coca-Cola Company. ($ in millions) PepsiCo Coca-Cola Net cash provided by operating activities $6,149 $7,857 Average current liabilities 9,231 12,094 Net income 6,025 7,051 Sales revenue 43,354 28,578 Capital expenditures 1,938 1,924 Dividends paid 2,841 3,734 Compute free cash flow for both companies and compare. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
$1,370 and $2,199
Explanation:
The formula and computation of the free cash flow is shown below:
= Net cash provided by operating activities - Capital expenditures - Dividend paid
For Pepsi Co, it would be
= $6,149 - $1,938 - $2,841
= $1,370
For coca-cola, it would be
= $7,857 - $1,924 - $3,734
= $2,199
As we see that, the coca-cola company has higher free cash flow than the Pepsi co
The modern day marching band traces its origin directly to what country’s military bands?
Final answer:
The modern day marching band has its roots in European military bands, with contributions from French and British influences, and was further developed by iconic composers like John Philip Sousa during World War I.
Explanation:
The modern day marching band traces its origins back to military bands, with a significant development attributed to European military ensembles, particularly from France and Great Britain. For instance, the depiction of an older man leading a musical group with a staff as described in Figure 8.2.40 seems to allude to ancient ceremonial practices which influenced later military and religious processions. Notably, the structure of military bands and their role in maintaining morale was prominent during the vast mobilizations and reforms of the U.S. Army in World War I, as in the case of the 'Harlem Hellfighters' and the use of popular patriotic songs composed by figures such as John Philip Sousa, who specialized in marches for military bands and whose piece 'Stars and Stripes Forever' became among America's most beloved patriotic anthems. During this era, bands not only entertained troops but also played a key role in military ceremonies and parades, capturing the spirit of the time and building a sense of identity and unity, as seen in Figure: American, British, and Japanese Troops parading through Vladivostok.
What is the government's policy on collusion in the United States? Explain the rationale for this policy. In the United States
A. the government makes collusion legal with antitrust laws because monopolies create no deadweight loss.
B. the government makes collusion unnecessary with government-imposed barriers to entry because monopolies enhance economic efficiency.
C. the government encourages collusion with subsidies because resulting profits can be used to develop new products.
D. the government promotes collusion with the Federal Trade Commission because perfectly competitive markets enhance economic efficiency.
E. the government makes collusion illegal with antitrust laws because monopolies reduce economic efficiency.
Answer:
The correct answer is letter "E": the government makes collusion illegal with antitrust laws because monopolies reduce economic efficiency.
Explanation:
Antitrust laws regulate competition between companies. To protect consumers from price manipulation and unfair competition by making sure trade remains unrestrained. When businesses conspire to turn competition to their favor, they violate antitrust laws.
Those regulations prohibit business practices such us monopolies since those types of organizations take control over a certain market, making almost impossible the entry of competitors and consumers have fewer choices and higher prices.
Marsh Co. had 2,400,000 shares of common stock outstanding on January 1 and December 31, 2013. In connection with the acquisition of a subsidiary company in June 2012, Marsh is required to issue 100,000 additional shares of its common stock on July 1, 2014, to the former owners of the subsidiary. Marsh paid $300,000 in preferred stock dividends in 2013, and reported net income of $5,100,000 for the year. Marsh's diluted earnings per share for 2013 should be
Answer:
Diluted EPS= $1.92
Explanation:
Diluted Earnings Per Share
Diluted Earning Per Shares is a measure of analysis used to determine the the quality of a company's Earnings Per Share after all convertible securities including warrants and outstanding convertible preferrence shares among others have been exercised.
Earning Per Shares on the Other hand measurs a company's profit per share without any recourse to convertible securities outstanding
The forumla for diluted Earnings Per Share
(Net Income- Dividend on Preference Stock)÷ (Outstanding Shares+ Diluted Shares)
The Net Income for the Year=$5,100,000
Dividend on Pref. Stock=$300,000 (Paid by Marsh in 2013)
Outstanding Shares=2,400,000 Common Stock
Diluted Shares= 100,000 additional shares to be issued on July 1, 2014
The Diluted EPS= (5,100,000-300,000)÷ (2,400,000+ 100,000)
=4,800,000÷ 2,500,000
=1.92
The "specifications" of a standardized futures contract describe the commodity or other asset covered by the contract and the amount of such commodity or asset to be delivered by the seller at expiration. The specifications can always be found at:___________.
Answer: The specifications of future contracts can always be found on the website where the offer is made or in trading pits
Explanation: Futures contracts will always have their specifications as to the amount that must be offered, expiration date of the contracts, minimum quantities that can be purchased and other elements that can help us verify or work on these contracts.
The elements that make this type of contract generally mark a trend in which you can easily buy and sell for this type of contracts, becoming more liquid than bonds and other financial obligations.
The specifications of a standardized futures contract are found at the exchange where it is traded, detailing commodity or asset quality and quantity. Business contracts with inflation adjustments benefit buyers and sellers by setting a real price that considers inflation, making financial expectations more predictable.
Explanation:The specifications of a standardized futures contract can always be found at the exchange where the contract is traded. These specifications detail the commodity or asset, the quality and quantity of the asset to be delivered, payment terms, and the delivery date. For instance, a futures contract for oil would specify the type of oil, how many barrels would be delivered, and the location of delivery.
Regarding business contracts with provisions for inflation adjustments, these often include clauses that protect both buyers and sellers from unexpected fluctuations in inflation. Sellers are not tied to a low nominal price in times of high inflation, thus ensuring they don't lose purchasing power over time. Conversely, buyers are not stuck with a high buying price if inflation is lower than expected, allowing them to benefit from a lower real cost.
Such contracts aim to establish a real price that accounts for inflation over the life of the contract, which is beneficial for both parties. By agreeing on a real price, both the seller and the buyer can have predictable financial expectations despite the uncertain future path of inflation.
Sodium Inc. borrowed $280,000 on April 1. The note requires interest at 12% and principal to be paid in one year.
How much interest is recognized for the period from April 1 to December 31?
a. $0.
b. $33,600.
c. $8,400.
d. $25,200.
Answer:
option (d) $25,200
Explanation:
Data provided in the question:
Amount borrowed = $280,000
Annual interest rate = 12% = 0.12
Interest period = April 1 to December 31 i.e 9 months
or
= 9 ÷ 12 = 0.75 year
Therefore,
Interest for the period from April 1 to December 31
= Amount borrowed × Interest rate × Time period
= $280,000 × 0.12 × 0.75
= $25,200
Hence,
The answer is option (d) $25,200
Camellia, a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year: 500,000
Hi, the question is incomplete, here is the complete exercise:
Camellia, a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year:
Jan Feb March
Sales (20% cash) $500,000 $750,000 $1,000,000
The company collects 70% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.
A) $570,000
B) $540,000
C) $690,000
D) $750,000
Answer:
C) $690,000
Explanation:
Budget for cash sales in february:
$750,000 x 20% = $150,000
Budget for credit sales:
For february sales:
$750,000 x 80% x 70% = $420,000
For January sales:
$500,000x 80% x 30% = $120.000
Total Cash budget = $690,000
A merchandising company like Camellia's budget involves various possible aspects such as sales, inventory purchases, operational costs, and net income. The provided amount, 500,000, could potentially relate to any of these factors but without specific context or a clear question, it becomes difficult to provide a precise answer.
Explanation:The provided question doesn't specify clear queries about Camellia's budget. However, when we're talking about a company's budget, particularly a merchandising company like Camellia, it typically involves various aspects such as sales, inventory purchases, operational expenses, and net income for a specific period. The given value, 500,000, could relate to any of these attributes and without further context, it's challenging to provide a specific answer. In budgeting, a merchandising company would go through a process of estimating sales, determining required inventory levels, highlighting operational costs, and the likes to form a complete budgetary picture for the business.
Learn more about Business Budgeting here:https://brainly.com/question/31622123
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True/False
Kylie is employed by Street Wheels, a large corporation that produces accessories for scooters, bicycles, and other children's vehicles. She is a creative force within the company and has helped create and launch several new successful products. Kylie is an example of an intrapreneur.
Answer:
True
Explanation:
An intrapreneur is a worker in charge of developing an innovative idea or project within a company. The intrapreneur may not face major risks or may not receive an entrepreneur's major rewards. However, an intrapreneur can access the resources and capabilities of an established company. An intrapreneur works within a company to develop an innovative project or project that will increase the future of the company. The intrapreneur is usually given autonomy to work on a project that can have a significant impact on the company. Over time, an intrapreneur can become an entrepreneur.
Kylie is an example of an intrapreneur because she is a creative force within the company and has helped create and launch successful products.
Explanation:True. Kylie, being a creative force within the company and helping create and launch successful products, is an example of an intrapreneur. An intrapreneur is an employee who thinks and acts like an entrepreneur within a company, taking initiative, generating new ideas, and contributing to the company's growth and innovation.