Questions
Big Oak Lumber is a lumber yard on Angel Island. Some of Big Oak’s transactions during...

Big Oak Lumber is a lumber yard on Angel Island. Some of Big Oak’s transactions during the- current year are as follows:

Apr. 15 Sold lumber on account to Hard Hat Construction, $19,700. The inventory subsidiary ledger shows the cost of this merchandise was $10,300.

Apr. 19 Purchased lumber on account from LHP Company, $3,700.

May 10 Collected in cash the $19,700
account receivable from Hard Hat Construction.

May 19 Paid the $3,700 owed to LHP Company.

Dec. 31 Big Oak’s personnel counted the inventory on hand and determined its cost to be $114,000. The accounting records, however, indicate inventory of $116,500 and a cost of goods sold of $721,000. The physical count of the inventory was observed by the company’s auditors and is considered correct.

Instructions:

a.) Prepare journal entries to record these transactions and events in the accounting records of Big Oak Lumber. (The company uses a perpetual inventory system.)

b.) Prepare a partial income statement showing the company’s gross profit for the year. (Net sales for the year amount to $1,422,000.)

c.) Big Oak purchases merchandise inventory at the same wholesale prices as other lumber yards. Because of its remote location the company must pay between $8,000 and $18,000 per year in extra transportation charges to receive delivery of merchandise. (These additional charges are included in the amount shown as cost of goods sold.)

Assume that an index of key business ratios in your library shows lumber yards of Big Oak’s approximate size (in total assets) average net sales of $1 million per year and a gross profit rate of 22 percent.

Is Big Oak able to pass its extra transportation costs on to its customers? Does the business appear to suffer or benefit financially from its remote location? Explain your reasoning and support your conclusions with specific accounting data comparing the operations of Big Oak Lumber with the industry averages.

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Do you believe McDonald's would be able to compete with Starbucks if they came up with...

Do you believe McDonald's would be able to compete with Starbucks if they came up with more products to sell under their McCafe line?

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A U.S. importer has agreed to purchase 500 bottles of cachaça (a type of rum) from...

A U.S. importer has agreed to purchase 500 bottles of cachaça (a type of rum) from Brazil at a price of 75 BRL (Brazilian reals) each. The cachaça will take five months to bottle, label, and ship, and payment is due before the wine is shipped.

  1. 2 pts)What can the importer do to reduce the risk of a currency rate change between the time he signs the contract to buy the cachaça and when he is required to pay for it?
    1. Offer to pay in a universal currency like Euros.
    2. There is nothing the importer can do but hope for the best.
    3. Purchase a forward contract for the purchase amount at an acceptable exchange rate.
    4. Refuse to purchase the goods if the dollar strengthens.
  1. (5 pts)Suppose the importer buys a forward contract for 37,500 BRL at a rate of 3.7 What is the importers profit and profit margin if the spot rate is 3.46 BRL to 1 USD on the payment date?
  1. (5 pts)Suppose the importer buys a forward contract for 37,500 BRL at a rate of 72. What is the importers profit and profit margin if the spot rate is 3.86 BRL to 1 USD on the payment date?

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Given: E(R1) = 0.11 E(R2) = 0.17 E(σ1) = 0.01 E(σ2) = 0.04 Calculate the expected...

Given:

E(R1) = 0.11
E(R2) = 0.17
E(σ1) = 0.01
E(σ2) = 0.04

Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 70 percent under the conditions given below. Do not round intermediate calculations. Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places.

  1. r1,2 = 1.00

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

  2. r1,2 = 0.65

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

  3. r1,2 = 0.30

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

  4. r1,2 = 0.00

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

  5. r1,2 = -0.30

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

  6. r1,2 = -0.65

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

  7. r1,2 = -1.00

    Expected return of a two-stock portfolio:

    Expected standard deviation of a two-stock portfolio:

In: Finance

Compare a forensic audit with a financial audit. Give specific examples of the differences between the...

Compare a forensic audit with a financial audit. Give specific examples of the differences between the two audits.

In: Finance

A U.S. importer has agreed to purchase 500 bottles of cachaça (a type of rum) from...

A U.S. importer has agreed to purchase 500 bottles of cachaça (a type of rum) from Brazil at a price of 75 BRL (Brazilian reals) each. The cachaça will take five months to bottle, label, and ship, and payment is due before the wine is shipped.

  1. (5 pts)Assume the spot rate is 3.756 BRL is equal to 1 USD. What is the total price in USD to the importer if the spot rate remains unchanged?
  1. (5 pts)What is the cost to the US importer for the cachaça in question 5 if the spot rate changes to 3.458 BRL to 1 USD?
  1. (2 pts)If the spot rate changes on the BRL as indicated in questions 3 and 4, did the USD strengthen or weaken relative to the BRL?

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Calculate the stock price given the following : Trading EBITDA Multiple= 10x Book equity= $1.0 Billion...

Calculate the stock price given the following :

Trading EBITDA Multiple= 10x

Book equity= $1.0 Billion

Shares Outstanding= 110 million

Short Term Bank debt= $100 Million

Long Term Bank debt= $1.15 billion

Corporate Bons- $250 Million

Total liabilities= $1.9 Billion

Total Assets= $2.9 Billion

Cash=$ 100 Million

EBIT= $300 Million

Depreciation & Amortization = $50 Million

Whats the stock price?

Calculate the EV with stock price at $25.

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Describe and explain the basic steps in a money laundering cycle.

Describe and explain the basic steps in a money laundering cycle.

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What is employee fraud and white-collar crime? Give definitions and specific examples of each.

What is employee fraud and white-collar crime? Give definitions and specific examples of each.

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Mr Grants wishes to purchase an apartment in new Kasama, the high cost residential area of...

Mr Grants wishes to purchase an apartment in new Kasama, the high cost residential area of Lusaka. The apartment is situated in a tree lined avenue. the purchase price with costs is K710,000.00 and he is able to obtain a 100% loan at an interest rate of 6% compounded monthly . the term of the loan is 20 years. the central bank has released preliminary data that the property values are expected to rise at the rate of 9% per year (0.75% per month). Mr grant intends to rent out the property after costs at a rate of K4,000 per month for the first year. Interest and rent are payable at the beginning of each year

Required

a) What is the expected value of the apartment in 20 years time

b) What is the beginning mortgage loan repayment at the beginning of each month

c) what is the next amount that Mr Grant has to pay in each month

In: Finance

b) There has been considerable growth in recent years in the use of economic analysis in...

b) There has been considerable growth in recent years in the use of economic analysis in investment management. Further significant expansion may lie ahead as financial analysts develop greater skills in economic analysis and these analyses are integrated more into the investment decision-making process. The following questions address the use of economic analysis in the investment decision-making process: (1) Differentiate among leading, lagging, and coincident indicators of economic activity, and give an example of each based on the part a). (2) Indicate whether the leading indicators are useful for achieving above-average investment results in automobile Industry. Justify your conclusion.

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As an investor, do you think the "buy low" mindset applies to Brazil? If not, what...

As an investor, do you think the "buy low" mindset applies to Brazil? If not, what changes would you like to see before making any investments in the country?

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The Board of Directors of Samsung has decided to raise funds through the capital market in...

  1. The Board of Directors of Samsung has decided to raise funds through the capital market in order to finance the international expansion business plan. State two (2) advantages and (2) disadvantages of raising funds from the capital market as compared to raising funds from the money market.

  2. Running a business as a non-listed company is different than running a business as a listed company. One of the issues that you now have to deal with as a listed company is the ‘agency problem’. Describe how the agency problem occurs and two (2) possible solutions to it.

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Identify three significant reasons why interest rate forecasts may be important in reaching investment conclusions in...

Identify three significant reasons why interest rate forecasts may be important in reaching investment conclusions in automobile industry in Malaysia.

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Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 27 percent...

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 27 percent for the next 3 years, with the growth rate falling off to a constant 6 percent thereafter.

If the required return is 14 percent and the company just paid a $1.50 dividend. what is the current share price?

  • $33.75

  • $31.01

  • $32.42

  • $33.09

  • $29.71

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