ree Cash Flows

Rhodes Corporation’s financial statements are shown below.

Rhodes Corporation: Income Statements for Year Ending December 31
(Millions of Dollars)

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.

1. What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

   2020: $    million

   2019: $    million

2. What is the free cash flow for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.

   $     million

3. What is the ROIC for 2020? Round your answer to two decimal places.

     %

4. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

   After-tax interest payment	$    million
   Reduction (increase) in debt	$    million
   Payment of dividends	$    million
   Repurchase (Issue) stock	$    million
   Purchase (Sale) of short-term investments	$    million

Vaughn reported the following pretax financial income (loss) for the years 2020–2022.

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 20% for 2020-2022.

repare the journal entries for the years 2020–2022 to record income tax expense, income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss) before income taxes.”. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Income Statement Partial

A study was conducted to investigate the effectiveness of acupuncture in reducing pain. Results for 6 randomly selected subjects are given in the accompanying table (the values are before and after acupuncture)

A) Is there sufficient evidence to conclude that acupuncture has no effect in reducing pain? Use cl: 0.05

b) construct a 95% confidence interval for the mean of the "before-after" differences.

management attitude about once book is closed is closed, what would you do in the circumstance to change their attitude?

Kurz Manufacturing is currently an​ all-equity firm with 21 million shares outstanding and a stock price of $9.00 per share. Although investors currently expect Kurz to remain an​ all-equity firm, Kurz plans to announce that it will borrow $55 million and use the funds to repurchase shares. Kurz will pay interest only on this​ debt, and it has no further plans to increase or decrease the amount of debt. Kurz is subject to a 35% corporate tax rate.

a. What is the market value of​ Kurz's existing assets before the​ announcement?

b. What is the market value of​ Kurz's assets​ (including any tax​ shields) just after the debt is​ issued, but before the shares are​ repurchased?

c. What is​ Kurz's share price just before the share​ repurchase? How many shares will Kurz​ repurchase?

d. What are​ Kurz's market value balance sheet and share price after the share​ repurchase?

a. What is the market value of​ Kurz's existing assets before the​ announcement?

The market value of​ Kurz's existing assets before the announcement is

​$

million. ​ (Round to one decimal​ place.)

b. What is the market value of​ Kurz's assets​ (including any tax​ shields) just after the debt is​ issued, but before the shares are​ repurchased?

The

market value of​ Kurz's assets​ (including any tax​ shields) just after the debt is​ issued, but before the shares are​ repurchased, is

​$

million.  ​(Round to one decimal​ place.)

c. What is​ Kurz's share price just before the share​ repurchase? How many shares will Kurz​ repurchase?

​Kurz's share price just before the share repurchase is

​$.

  ​(Round to two decimal​ places.)                                  Shares to be repurchased are

million.  ​(Round to three decimal​ places.)

d. What are​ Kurz's market value balance sheet and share price after the share​ repurchase?

Market value of assets after share repurchase is

​

million. ​ (Round to one decimal​ place.)Debt after share repurchase is

​

million. ​(Round to the nearest​ million.)Market value of equity after share repurchase is

​$

million. ​ (Round to one decimal​ place.)Share price after repurchase is

​$.

​(Round to two decimal​ places.)

On January 1, 2020, Empress Bank granted a loan to a borrower. The interest on the loan is 10% payable annually starting on December 31, 2019. The loan matures in three years on December 31, 2022. Principal amount 5,000,000 Direct origination cost incurred 457,500 Origination fee charged against the borrower 200,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 8%.

Determine the carrying amount of the loan on January 1, 2020.

Prepare journal entries for January 1, 2020.

Prepare journal entry for receipt of interest on December 31, 2020.

Prepare journal entry for amortization of direct origination cost in 2021.

Prepare journal entry for receipt of payment of loan in 2022.

please use word

QUESTION 5 (16 minutes; 9 marks):  

Queenstown Corporation issues 4,000, $4 cumulativepreferred shares at $80 each and 12,000 common shares at $18 at the beginning of 2020. Each preferred share is convertible into four common shares. During the years 2020 and 2021, the following transactions affected Queenstown Corporation’s shareholders’ equity accounts:

2020

Dec. 10      Declared and paid $12,000 of annual dividends to preferred shareholders.

2021

Dec. 10      Declared and paid the annual dividend to preferred shareholders and a $4,000 dividend to common shareholders.

Dec. 21      The preferred shares were converted into common shares.

Required:

a)         Journalize each of the 2020 and 2021 transactions.

b)         After the preferred shares are converted, what is the total number of common shares issued?

Metlock Company purchased machinery on January 1, 2020, for $88,000. The machinery is estimated to have a salvage value of $8,800 after a useful life of 8 years.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute 2020 depreciation expense using the double-declining-balance method.

eTextbook and Media

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute 2020 depreciation expense using the double-declining-balance method, assuming the machinery was purchased on October 1, 2020. (Round answer to 0 decimal places, e.g. 5,125.)

The financial year of your audit client Pickles Ltd ended on 31 December 2019. Your audit report was signed on 20 February 2020 and the financial statements were issued on 5 March 2020.

Each of the following independent events, which the auditors have discovered after the end of the financial year, have a material effect on the financial statements:

1. 14 February 2020

   You found that the audit client had lost a court case for breaching a contract with a supplier. The litigation started on 2 February 2019. The company is required to pay $45,000 damages to the supplier.

2. 27 February 2020
   Pickles Ltd announced that it is making a takeover offer for another company.

Required:

For each of the two events above, explain the auditor’s responsibilities and the auditor’s appropriate course of action.

heffield Company purchased machinery on January 1, 2020, for $93,600. The machinery is estimated to have a salvage value of $9,360 after a useful life of 8 years.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute 2020 depreciation expense using the sum-of-the-years'-digits method.

eTextbook and Media

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute 2020 depreciation expense using the sum-of-the-years'-digits method, assuming the machinery was purchased on April 1, 2020. (Round answer to 0 decimal places, e.g. 5,125.)