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Rojas Corporation’s comparative balance sheets are presented below. ROJAS CORPORATION Comparative Balance Sheets December 31 2020...

Rojas Corporation’s comparative balance sheets are presented below.

ROJAS CORPORATION
Comparative Balance Sheets
December 31

2020

2019
Cash

$14,400

$10,000
Accounts receivable

20,800

23,000
Land

19,800

25,900
Buildings

70,300

70,300
Accumulated depreciation—buildings

(14,700

)

(10,600

)
   Total

$110,600

$118,600
Accounts payable

$12,200

$27,600
Common stock

75,600

71,000
Retained earnings

22,800

20,000
   Total

$110,600

$118,600

Additional information:
1. Net income was $22,600. Dividends declared and paid were $19,800.
2. No noncash investing and financing activities occurred during 2020.
3. The land was sold for cash of $4,800.
Prepare a statement of cash flows for 2020 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000).)

ROJAS CORPORATION
Statement of Cash Flows



b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)



c. If the simple CAPM is valid, is the situation above possible?

  • Yes

Solutions

Expert Solution

Loss on Sale of Land = (Opening Balance - Closing Balance) - Sale value of Land

Loss on Sale of Land = (25900 - 19800) - 4800

Loss on Sale of Land = $1300

Please dont forget to upvote

B & C are not related to this question

jeff jeffy answered 1 year ago
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