Ringmeup, Inc., had net income of $137,200 for the year ended December 31, 2016. At the beginning of the year, 39,000 shares of common stock were outstanding. On May 1, an additional 16,000 shares were issued. On December 1, the company purchased 4,700 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ringmeup, Inc., paid the annual dividend on the 9,000 shares of 3.65%, $100 par value preferred stock that were outstanding the entire year.
Required:
Calculate basic earnings per share of common stock for the year ended December 31, 2016
In: Accounting
PLEASE Fill in the blanks:
1) The group responsible for overseeing the corporation's activities is /are the ________.
2) A corporation is responsible for its own acts and debts because it is considered a ________.
3) The number of shares that a corporation's charter allows it to sell is the ________ stock.
4) ________ bonds can be exchanged for a fixed number of shares of the issuing corporation's common stock.
5) ________ bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity.
In: Accounting
Exercise 15-18 (Part Level Submission)
Cheyenne Company reported the following amounts in the
stockholders’ equity section of its December 31, 2016, balance
sheet.
| Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) | $200,000 | |
| Common stock, $5 par (107,000 shares authorized, 21,400 shares issued) | 107,000 | |
| Additional paid-in capital | 127,000 | |
| Retained earnings | 491,000 | |
| Total | $925,000 |
During 2017, Cheyenne took part in the following transactions
concerning stockholders’ equity.
| 1. | Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. | |
| 2. | Purchased 1,800 shares of its own outstanding common stock for $41 per share. Cheyenne uses the cost method. | |
| 3. | Reissued 800 treasury shares for land valued at $33,700. | |
| 4. | Issued 520 shares of preferred stock at $105 per share. | |
| 5. | Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $44 per share. | |
| 6. | Issued the stock dividend. | |
| 7. | Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018. |
In: Accounting
In 1993, Skysong Company completed the construction of a building at a cost of $2,120,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $64,000 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $530,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $21,200. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.
Compute the annual depreciation to be charged, beginning with 2022. (Round answer to 0 decimal places, e.g. 45,892.)
| Annual depreciation expense—building |
In: Accounting
The flowing numbers come from an equity statement for fiscal year 2011 (in millions):
Shareholders’ equity May 31, 2010 $2,700
Issue of shares for exercise of stock options 405
Repurchase of shares (132)
Net income 467
Unrealized loss on debt securities (23)
Tax benefit from the exercise of stock options 70
Common dividends paid (250)
Preferred dividends paid (10)
Shareholders’ equity May 31, 2011 3,227
The firm’s tax rate is 35 percent. Shareholders’ equity at May 31, 2010 includes $120 million in preferred stock.
a. Calculate the loss to common shareholders from the exercise of stock options.
b. Present a reformulated statement of common shareholders’ equity that identifies comprehensive income and separates it from net payout to shareholders.
c. What was the return on common equity (ROCE) for the year? (Use beginning equity in this calculation.)
In: Accounting
A company is considering purchasing a new second machine in order to expand their business. The information for the new machine is:
Cost= $100,000
Increase in contribution margin= $25,000
Life of the machine= 5 years
Required rate of return = 10%
Calculate the following:
a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar)
b. Payback period (Round your answer to two decimal places.)
c. Discounted payback period (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.)
d. Internal rate of return (Round the rate to two decimal places, X.XX%.)
e. Accrual accounting rate of return based on net initial investment (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.
In: Accounting
Question 2
Hydropure Ltd commenced operations at the beginning of the current year. One of the company’s products, an alkaline antioxidant water filter, sells for $299 per unit. Information related to the current year’s activities are as follows:
$
Variable costs per unit:
Direct materials 40
Direct labour 74
Manufacturing overhead 96
Annual fixed costs:
Manufacturing overhead 700,000
Selling and administrative 880,000
Production and sales activity:
Production (units) 25,000
Sales (units) 20,000
Hydropure Ltd carries its finished goods inventory at the average unit cost of production. There was no work in process at the yearend.
Required:
(a) Determine the cost of the yearend finished goods inventory.
(b) Calculate Hydropure Ltd’s net profit for the current year. Ignore taxation.
(c) If the next year’s production decreases to 24,000 units and the general cost behaviour and patterns do not change, what is the likely effect on:
(i) Direct labour cost of $74 per unit? Explain why.
(ii) Fixed manufacturing overhead cost of $700,000? Explain why.
(iii) Fixed selling and administrative cost of $880,000? Explain why.
(iv) Average unit cost of production? Explain why.
In: Accounting
Denzel Brooks opened a Web consulting business called Venture
Consultants and completed the following transactions in
March.
| March | 1 | Brooks invested $175,000 cash along with $28,000 in office equipment in the company in exchange for common stock. | ||
| 2 | The company prepaid $7,500 cash for six months' rent for an office. Hint: Debit Prepaid Rent for $7,500. | |||
| 3 | The company made credit purchases of office equipment for $4,700 and office supplies for $2,200. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $4,000 cash. | |||
| 9 | The company completed a $11,100 project for a client, who must pay within 30 days. | |||
| 12 | The company paid $6,900 cash to settle the account payable created on March 3. | |||
| 19 | The company paid $8,200 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $8,200. | |||
| 22 | The company received $3,200 cash as partial payment for the work completed on March 9. | |||
| 25 | The company completed work for another client for $4,000 on credit. | |||
| 29 | The company paid a $5,700 cash dividend. | |||
| 30 | The company purchased $800 of additional office supplies on credit. | |||
| 31 | The company paid $1,100 cash for this month's utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of the end of
March.
In: Accounting
Present Value of Bonds Payable; Premium
Moss Co. issued $100,000 of five-year, 11% bonds with interest payable semiannually, at a market (effective) interest rate of 8%.
Determine the present value of the bonds payable, using the present value tables in Exhibit 8 and Exhibit 10.
Note: Round to the nearest dollar.
$
In: Accounting
Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2017, follow. Additional Information Items An analysis of WTI's insurance policies shows that $3,600 of coverage has expired. An inventory count shows that teaching supplies costing $3,120 are available at year-end 2017. Annual depreciation on the equipment is $14,400. Annual depreciation on the professional library is $7,200. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,700, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018. On October 15,
WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,380 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)
WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee. The balance in the Prepaid Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2017
Debit
Cash- $27,547
Accounts receivable- 0
Teaching supplies- 10,594
Prepaid insurance- 15,894
Prepaid rent- 2,120
Professional library- 31,784
Equipment- 74,152
Dividends- 42,381
Depreciation expense—Professional library 0
Depreciation expense—Equipment 0
Salaries expense 50,858
Insurance expense- 0
Rent expense- 23,320
Teaching supplies expense- 0
Advertising expense -7,417
Utilities expense -5,933
$ 292,000
Credit
| Accumulated depreciation—Professional library | $ | 9,537 |
| Accumulated depreciation—Equipment | 16,954 |
| Accounts payable | 36,294 |
| Salaries payable | 0 |
| Unearned training fees | 13,500 |
| Common stock | 14,000 |
| Retained earnings | 53,385 |
| Tuition fees earned | 108,069 |
| Training fees earned | 40,261 |
Problem 3-3A Part 2 2-a. Post the balance from the unadjusted
trial balance and the adjusting entries in to the T-accounts. 2-b.
Prepare an adjusted trial balance
.
Additional Information Items
A. An analysis of WTI's insurance policies shows that $3,600 of coverage has expired.
B. An inventory count shows that teaching supplies costing $3,120 are available at year-end 2017.
C. Annual depreciation on the equipment is $14,400.
D. Annual depreciation on the professional library is $7,200.
E. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,700, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018.
F. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,380 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)
G. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
H. The balance in the Prepaid Rent account represents rent for December.
Prepare Wells Technical Institute's balance sheet as of December 31, 2017.
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In: Accounting
On January 1, 2016 Venti Corporation exchanged $344,000 cash for a 90% interest in Krunk Corporation’s outstanding voting stock. Krunk’s acquisition balance sheet is in the accompanying Excel spreadsheet along with the financial statements for both companies for the year ended December 31, 2018.
On January 1, 2016, Venti prepared the following fair value allocation schedule:
Consideration transferred by Venti............................................. 344,000
10% noncontrolling interest fair value....................................... 36,000
Fair value of Krunk..................................................................... 380,000
Book value of Krunk................................................................... 324,000
Excess fair value over book value................................................ 56,000
Allocated to equipment (remaining life=9 years).................... 18,000
Allocated to goodwill................................................................ 38,000
Required:
| Krunk | |||
| Balance Sheet | |||
| As of January 1, 2016 | |||
| Cash and receivables | 15,000 | ||
| Inventory | 35,000 | ||
| Property and equipment (net) | 350,000 | ||
| TOTAL | 400,000 | ||
| Liabilities | 76,000 | ||
| Common stock | 150,000 | ||
| Retained earnings | 174,000 | ||
| TOTAL | 400,000 | ||
| Financial Statements | |||
| December 31, 2018 | |||
| Venti | Krunk | ||
| Sales | 862,000 | 366,000 | |
| Cost of goods sold | 515,000 | 209,000 | |
| Depreciation expense | 191,200 | 67,000 | |
| Equity in Krunk's earnings | 79,200 | 0 | |
| Separate company net income | 235,000 | 90,000 | |
| Retained earnings, 1/1 | 500,000 | 278,000 | |
| Net income | 235,000 | 90,000 | |
| Dividends | 130,000 | 27,000 | |
| Retained earnings, 12/31 | 605,000 | 341,000 | |
| Cash and receivables | 135,000 | 82,000 | |
| Inventory | 255,000 | 136,000 | |
| Investment in Krunk | 488,900 | 0 | |
| Property and equipment (net) | 964,000 | 328,000 | |
| Total assets | 1,842,900 | 546,000 | |
| Liabilities | 722,900 | 55,000 | |
| Common stock - Venti | 515,000 | 0 | |
| Common stock - Krunk | 0 | 150,000 | |
| Retained earnings, 12/31 | 605,000 | 341,000 | |
| Total liabilities and equity | 1,842,900 | 546,000 | |
In: Accounting
|
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $25. All of the company’s sales are on account. |
| Weller Corporation Comparative Balance Sheet (dollars in thousands) |
||||||
| This Year | Last Year | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash | $ | 1,090 | $ | 1,210 | ||
| Accounts receivable, net | 10,200 | 7,400 | ||||
| Inventory | 13,800 | 12,200 | ||||
| Prepaid expenses | 750 | 620 | ||||
| Total current assets | 25,840 | 21,430 | ||||
| Property and equipment: | ||||||
| Land | 9,600 | 9,600 | ||||
| Buildings and equipment, net | 43,706 | 37,508 | ||||
| Total property and equipment | 53,306 | 47,108 | ||||
| Total assets | $ | 79,146 | $ | 68,538 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 19,300 | $ | 17,800 | ||
| Accrued liabilities | 1,060 | 830 | ||||
| Notes payable, short term | 190 | 190 | ||||
| Total current liabilities | 20,550 | 18,820 | ||||
| Long-term liabilities: | ||||||
| Bonds payable | 9,700 | 9,700 | ||||
| Total liabilities | 30,250 | 28,520 | ||||
| Stockholders' equity: | ||||||
| Common stock | 500 | 500 | ||||
| Additional paid-in capital | 4,000 | 4,000 | ||||
| Total paid-in capital | 4,500 | 4,500 | ||||
| Retained earnings | 44,396 | 35,518 | ||||
| Total stockholders' equity | 48,896 | 40,018 | ||||
| Total liabilities and stockholders' equity | $ | 79,146 | $ | 68,538 | ||
| Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) |
||||||
| This Year | Last Year | |||||
| Sales | $ | 79,200 | $ | 65,000 | ||
| Cost of goods sold | 45,500 | 38,000 | ||||
| Gross margin | 33,700 | 27,000 | ||||
| Selling and administrative expenses: | ||||||
| Selling expenses | 10,800 | 10,900 | ||||
| Administrative expenses | 6,800 | 6,500 | ||||
| Total selling and administrative expenses | 17,600 | 17,400 | ||||
| Net operating income | 16,100 | 9,600 | ||||
| Interest expense | 970 | 970 | ||||
| Net income before taxes | 15,130 | 8,630 | ||||
| Income taxes | 6,052 | 3,452 | ||||
| Net income | 9,078 | 5,178 | ||||
| Dividends to common stockholders | 200 | 500 | ||||
| Net income added to retained earnings | 8,878 | 4,678 | ||||
| Beginning retained earnings | 35,518 | 30,840 | ||||
| Ending retained earnings | $ | 44,396 | $ | 35,518 | ||
| Required: | |
| Compute the following financial data for this year: |
| 1. |
Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) |
| 2. |
Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) |
| 3. |
Inventory turnover. (Round your answer to 2 decimal places.) |
| 4. |
Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) |
| 5. |
Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) |
| 6. |
Total asset turnover. (Round your answer to 2 decimal places.) |
In: Accounting
|
Near the end of 2011, the management of Simid Sports Co., a merchandising company, prepared the following estimated statement of financial position for December 31, 2011. |
|
SIMID SPORTS COMPANY Estimated Statement of Financial position December 31, 2011 |
|||||
| Assets | |||||
| Cash | $ | 35,500 | |||
| Accounts receivable | 520,000 | ||||
| Inventory | 157,500 | ||||
| Total current assets | 713,000 | ||||
| Equipment | $ | 536,000 | |||
| Less accumulated depreciation | 67,000 | 469,000 | |||
| Total assets | $ | 1,182,000 | |||
| Liabilities and Equity | |||||
| Accounts payable | $ | 375,000 | |||
| Bank loan payable | 16,000 | ||||
| Tax payable (due 3/15/2012) | 89,000 | ||||
| Total liabilities | $ | 480,000 | |||
| Share capital—ordinary | 473,500 | ||||
| Retained earnings | 228,500 | ||||
| Total stockholders’ equity | 702,000 | ||||
| Total liabilities and equity | $ | 1,182,000 | |||
|
To prepare a master budget for January, February, and March of 2012, management gathers the following information. |
| a. |
Simid Sports’ single product is purchased for $30 per unit and resold for $54 per unit. The expected inventory level of 5,250 units on December 31, 2011, is more than management’s desired level for 2012, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 7,000 units; February, 8,750 units; March, 10,500 units; and April, 9,500 units. |
||
| b. |
Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 63% is collected in the first month after the month of sale and 37% in the second month after the month of sale. For the December 31, 2011, accounts receivable balance, $125,000 is collected in January and the remaining $395,000 is collected in February. |
||
| c. |
Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2011, accounts payable balance, $75,000 is paid in January and the remaining $300,000 is paid in February. |
||
| d. |
Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $90,000 per year. |
||
| e. |
General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash. |
||
| f. |
Equipment reported in the December 31, 2011, statement of financial position was purchased in January 2011. It is being depreciated over eight years under the straight-line method with no residual value. The following amounts for new equipment purchases are planned in the coming quarter: January, $34,000; February, $95,000; and March, $28,500. This equipment will be depreciated under the straight-line method over eight years with no residual value. A full month’s depreciation is taken for the month in which equipment is purchased. |
||
| g. |
The company plans to acquire land at the end of March at a cost of $145,000, which will be paid with cash on the last day of the month. |
||
| h. |
Simid Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $32,740 in each month. |
||
| i. |
The income tax rate for the company is 37%. Income tax on the first quarter’s income will not be paid |
||
|
Answer the following questions(5---8) |
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| 5. |
Monthly capital expenditures budgets. 6.Monthly cash budgets. |
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| 8. |
Budgeted statement of financial position as at March 31, 2012. |
In: Accounting
Business law
(1) Can a small-holding (minor) shareholder have an influence on how a company is managed? What are the main restrictions and are the number of shares held relevant?
In: Accounting
|
EBP Limited is a small firm involved in the production and sale of electronic business products. The company is well known for its attention to quality and innovation. During the past 15 months, a new product has been under development that allows users handheld access to email and video images. EBP has been designing two models: Standard and Enhanced. Development costs have amounted to RM181,500 and RM262,500 respectively. The total market demand for each model is expected to be 40,000 units and management anticipate being able to obtain the following market shares: Standard 25%; Enhanced 20%. EBP paying RM34,500 for an in-depth market study. Forecast the following data:
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Required:
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In: Accounting