Question
In: Finance
An insurance company reported the following balance sheet at year end for 2009 (all amounts are...
An insurance company reported the following balance sheet at year end for 2009 (all amounts are in millions of dollars)
Assets
Investments $1500
Insurance assets 300
Total 1800
Liabilities and equity
Insurance claims 700
Unearned premiums 140
Long-term debt 150
Equity 810
Total 1800
Investments are available-for-sale securities marked to market.
The company reported the following income statement for 2010
Premium revenue 365
Investment income 60
Realized gains on investments 80
Total revenue 505
Insurance losses and expenses 405
Net income 100
In addition, the company reported $65 million in unrealized losses on investments as part of other comprehensive income in its equity statement
Ignore taxes in answering the following question:
- What was the rate of return earned on investments for 2010?
- Calculate net operating assets in the insurance underwriting part of the business at the end of 2009.
- Calculate both the earnings and residual earnings from the insurance underwriting part of the business for 2010. Use a required return rate of 9% for this calculation
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Prepaid insurance is reported on the balance sheet as a
Prepaid insurance is reported on the balance sheet as a
fixed asset
current asset
long-term liability
current liability
Bohemian Manufacturing Company has the following end-of-year balance sheet: Bohemian Manufacturing Company Balance Sheet For the...
Bohemian Manufacturing Company has the following end-of-year
balance sheet:
Bohemian Manufacturing Company
Balance Sheet
For the Year Ended on December 31
Assets
Liabilities
Current Assets:
Current Liabilities:
Cash and equivalents
$150,000
Accounts payable
$250,000
Accounts receivable
400,000
Accrued liabilities
150,000
Inventories
350,000
Notes payable
100,000
Total Current Assets
$900,000
Total Current Liabilities
$500,000
Net Fixed Assets:
Long-Term Bonds
1,000,000
Net plant and equipment(cost minus depreciation)
$2,100,000
Total Debt
$1,500,000
Common Equity
Common stock
800,000
Retained earnings
700,000
Total Common Equity...
Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):...
Riley Incorporated reports the following amounts at the end of
the year (all amounts in $000): Cash $16,140 Product Revenues
$112,500 Depreciation Expense 3,210 Mortgage Payable 38,000 Taxes
Payable 1,020 Treasury Stock 650 Buildings 79,000 Salaries 62,800
Land 40,000 Accumulated Depreciation 21,730 Current Portion - Notes
and Mortgage Payable 2,200 Accounts Payable 18,500 Equipment 42,000
Net Accounts Receivable 23,500 Income Tax Expense 3,650 Discounts
on Notes Payable 7,950 Interest Expense 4,000 Inventory 6,400 Notes
Payable 25,650 Costs of Goods Sold...
Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):...
Riley Incorporated reports the following amounts at the
end of the year (all amounts in $000):
Cash
Depreciation Expense
Taxes Payable
$ 16,140
3,210
1,020
Product Revenues
Mortgage Payable
Treasury Stock
$ 112,500
38,000
650
Buildings
Land
Current Portion of Notes and Mortgages Payable
79,000
40,000
2,200
Salaries
Accumulated Depreciation
62,800
21,730
Accounts Payable
Net Accounts Receivable
18,500
23,500
Equipment
Income Tax Expense
Discount on Notes Payable
42,000
3,650
7,950
Interest Expense
Notes Payable
Utilities
4,000
25,650
350
Inventory
Costs...
Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):...
Riley Incorporated reports the following amounts at the end of
the year (all amounts in $000): Cash Depreciation Expense Taxes
Payable $ 16,140 3,210 1,020 Product Revenues Mortgage Payable
Treasury Stock $ 112,500 38,000 650 Buildings Land Current Portion
of Notes and Mortgages Payable 79,000 40,000 2,200 Salaries
Accumulated Depreciation 62,800 21,730 Accounts Payable Net
Accounts Receivable 18,500 23,500 Equipment Income Tax Expense
Discount on Notes Payable 42,000 3,650 7,950 Interest Expense Notes
Payable Utilities 4,000 25,650 350 Inventory Costs...
Entity A reported the following items on its balance sheet at the end of the current...
Entity A reported the following items on its balance sheet at
the end of the current year. All accounts are listed.
Cash $45,000
Accounts payable 80,000
Property, plant & equipment 200,000
Long-term debt 60,000
Common stock 150,000
Accounts receivable 90,000
Retained earnings ?
Inventory 75,000
What is Entity A’s Retained Earnings balance at
the end of the current year?
$270,000
$410,000
$140,000
$120,000
2.5 points
QUESTION 6
Entity I forgot to record four adjusting entries during 2019.
Which one...
Fuzzy Button Clothing Company has the following end-of-year balance sheet: Fuzzy Button Clothing Company Balance Sheet...
Fuzzy Button Clothing Company has the following end-of-year
balance sheet:
Fuzzy Button Clothing Company
Balance Sheet
For the Year Ended on December 31
Assets
Liabilities
Current Assets:
Current Liabilities:
Cash and equivalents
$150,000
Accounts payable
$250,000
Accounts receivable
400,000
Accrued liabilities
150,000
Inventories
350,000
Notes payable
100,000
Total Current Assets
$900,000
Total Current Liabilities
$500,000
Net Fixed Assets:
Long-Term Bonds
1,000,000
Net plant and equipment(cost minus depreciation)
$2,100,000
Total Debt
$1,500,000
Common Equity
Common stock
800,000
Retained earnings
700,000
Total...
Fuzzy Button Clothing Company has the following end-of-year balance sheet: Fuzzy Button Clothing Company Balance Sheet...
Fuzzy Button Clothing Company has the following end-of-year
balance sheet:
Fuzzy Button Clothing Company
Balance Sheet
For the Year Ended on December 31
Assets
Liabilities
Current Assets:
Current Liabilities:
Cash and equivalents
$150,000
Accounts payable
$250,000
Accounts receivable
400,000
Accrued liabilities
150,000
Inventories
350,000
Notes payable
100,000
Total Current Assets
$900,000
Total Current Liabilities
$500,000
Net Fixed Assets:
Long-Term Bonds
1,000,000
Net plant and equipment(cost minus depreciation)
$2,100,000
Total Debt
$1,500,000
Common Equity
Common stock
800,000
Retained earnings
700,000
Total...
1. Are the amounts at which fixed assets are reported in the balance sheet their approximate...
1. Are the amounts at which fixed assets are reported in the
balance sheet their approximate market values as of the balance
sheet date? Discuss.
2. Immediately after a used truck is acquired, a new motor is
installed and the tires are replaced at a total cost of $5,750. Is
this a capital expenditure or a revenue expenditure?
The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average...
The following information pertains to Ortiz Company. Assume that
all balance sheet
amounts represent both average and ending balance figures.
Assume that all sales were
on credit.
Assets
Cash and short-term investments
$ 45,000
Accounts receivable (net)
25,000
Inventory
12,000
Property, plant and equipment
210,000
Total Assets
$292,000
Liabilities and Stockholders’ Equity
Current liabilities
$ 50,000
Long-term liabilities
90,000
Stockholders’ equity—common
152,000
Total Liabilities and Stockholders’ Equity
$292,000
Income Statement
Sales
$ 120,000
Cost of goods sold
66,000
Gross profit...
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