The following transactions apply to Jova Company for Year 1, the first year of operation:

Issued $19,000 of common stock for cash.

Recognized $219,000 of service revenue earned on account.

Collected $171,900 from accounts receivable.

Paid $134,000 cash for operating expenses.

Adjusted the accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.

The following transactions apply to Jova for Year 2:

Recognized $329,000 of service revenue on account.

Collected $344,000 from accounts receivable.

Determined that $2,600 of the accounts receivable were uncollectible and wrote them off.

Collected $1,700 of an account that had previously been written off.

Paid $214,000 cash for operating expenses.

Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 0.5 percent of sales on account.

Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the requirements for Year 2.

Effects of transaction on financial statement

General Journal

Income Statement

Statement of Changes in Stockholders' Equity

Balance Sheet

Statement of Cash Flows

Closing entries

Use the straight-line method to compute the depreciation expense for Year 1 and Year 2

Blue Elk Manufacturing reported sales of $743,000 at the end of last year; but this year, sales are expected to grow by 6%. Blue Elkexpects to maintain its current profit margin of 22% and dividend payout ratio of 20%. The firm’s total assets equaled $500,000 and were operated at full capacity. Blue Elk’s balance sheet shows the following current liabilities: accounts payable of $80,000, notes payable of $35,000, and accrued liabilities of $60,000. Based on the AFN (Additional Funds Needed) equation, what is the firm’s AFN for the coming year?

a. -$105,313

b. -$117,014

c. -$152,118

d. -$140,417

A negatively-signed AFN value represents:

a surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends.

a point at which the funds generated within the firm equal the demands for funds to finance the firm’s future expected sales requirements.

a shortage of internally generated funds that must be raised outside the company to finance the company’s forecasted future growth.

Because of its excess funds, Blue Elk is thinking about raising its dividend payout ratio to satisfy shareholders. What percentage of its earnings can Blue Elk pay to shareholders without needing to raise any external capital? (Hint: What can Blue Elk increase its dividend payout ratio to before the AFN becomes positive?)

a. 87.5%

b. 78.8%

c. 61.2%

d. 74.4%

In the current year, John gives $140,000 of land to John, Jr. In the current year, John's wife gives $170,000 of land to Andy and $52,000 cash to John, Jr. Assume the couple elects gifts splitting for the current year and the current year is 2016. What are the couple's taxable gifts? How would your answer to Part a change if John's wife gave the $52,000 of cash to Larry (instead of to John, Jr.)

A project has a forecasted cash flow of $126 in year 1 and $137 in year 2. The interest rate is 5%, the estimated risk premium on the market is 11.5%, and the project has a beta of 0.66. If you use a constant risk-adjusted discount rate, answer the following: a. What is the PV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the certainty-equivalent cash flow in year 1 and year 2? (Do not round intermediate calculations. Round your answers to 2 decimal places.) c. What is the ratio of the certainty-equivalent cash flows to the expected cash flows in years 1 and 2? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

"The revenue for a project in year 8 is $38,000 in constant (year-0) dollars. Expenses (not including depreciation) in the same year is $22,000 in constant (year-0) dollars. Depreciation in that same year is $7675. If there were no inflation, the net income for year 8 would be $5078 in constant (year-0) dollars. If the inflation rate is 3%, what is the net cash flow in year 8 in actual dollars? Assume there are no investments or salvage values in this year. Hint: you will need to calculate the tax rate. The answer could be a negative number."

1. Find the accumulate value at the end of year 10 of a 10-year annuity with annual payments which pays $1000 in one year and each subsequent payment is 3% less than the preceding payment. The annual effective rate of interest is 5%.

2. An annuity immediate has semiannual payments with arithmetic progression of 800, 750, 700, . . . , 350, at i(2) = 0.16. Find the future value of this annuity 3 years after the last payment.

3. ​​​​​​​

The table below shows the number of students in each year at a certain university:

Year of study 1 2 3 4 5 6 7

No. of students 300 280 275 175 92 48 30

You would like to select a random sample of 100 students from this university.

i. Explain how you would choose a simple random sample.

ii. Explain how you would choose a sample using systematic (interval) sampling method.

iii. If you use stratified sampling method to choose a sample, explain how this could be done and how many students from each year group are to be chosen for the sample.

The cash flows for the two projects are as follows? ($ million):

a. What is the IRR of each? project?

b. What is the NPV of each project at your cost of? capital?

c. At what cost of capital are you indifferent between the two? projects?

d. What should you? do?

Prepare a horizontal analysis of the segment data using the prior year as the base year. Round all percents to one decimal place. Enter all amounts in millions. If required, use minus sign to indicate the decreasing values.

b. Prepare a vertical analysis of the segment data. Round all percents to one decimal place and round the total percentage to 100 if necessary.

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b. For vertical analysis, use the total revenues and show the percentage in a column for that year.

c. Based on the percentages in the vertical analysis, which of Starbucks's operations grew more?

Blue Elk Manufacturing reported sales of $720,000 at the end of last year, but this year, sales are expected to grow by 7%. Blue Elk expects to maintain its current profit margin of 21% and dividend payout ratio of 30%. The following information was taken from Blue Elk’s balance sheet: Total assets: $400,000 Accounts payable: $80,000 Notes payable: $35,000 Accrued liabilities: $70,000 Based on the AFN equation, the firm’s AFN for the current year is _________.

a. -86,174

b. -105,324

c. -95,749

d. -100,536

Because of its excess funds, Blue Elk Manufacturing is thinking about raising its dividend payout ratio to satisfy shareholders. Blue Elk could pay out _______% of its earnings to shareholders without needing to raise any external capital. (Hint: What can Blue Elk increase its dividend payout ratio to before the AFN becomes positive?)

a. 71.4%

b. 89.2%

c. 75.8%

d. 62.4 %