Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $11,125 (details in b).
2. Sold equipment costing $64,875, with accumulated depreciation of $36,125, for $17,625 cash.
3. Purchased equipment costing $102,375 by paying $42,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,600 cash by signing a short-term note payable.
5. Paid $53,125 cash to reduce the long-term notes payable.
6. Issued 3,100 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $51,300.

Required:
1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)

Consider two bonds, a 3-year bond paying an annual coupon of 6.90% and a 10-year bond also with an annual coupon of 6.90%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 12%.

a. What is the new price of the 3-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What is the new price of the 10-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Revenues generated by New Link product are forecast as follows: year 1: $40,000, year 2: $30,000, year 3: $20,000, year 4: $10,000. Expenses are expected to be 40% of revenues and working capital required in each year is expected to be 20% of revenues for the following year. The product requires an immediate investment of $45,000 in plant and equipment

a. What is the initial investment in the product? Remember working capital

b. If the plant and equipment are depreciated to a salvage value of zero using straight line depreciation and the firm’s tax rate is 40%, what are the project cash flows in each year?

c. If the opportunity cost of capital is 12%, what is project NPV, IRR, and MIRR?

Assume Maple Corp. has just completed the third year of its existence (year 3). The table below indicates Maple’s ending book inventory for each year and the additional §263A costs (UNICAP) it was required to include in its ending inventory. Maple immediately expensed these costs for book purposes. In year 2, Maple sold all of its year 1 ending inventory, and in year 3 it sold all of its year 2 ending inventory. What book-tax difference associated with its inventory did Maple report in year 2 and year 3? (Enter a favorable difference as a positive and an unfavorable difference as a negative)

Please provide a step-by-step explanation so I can figure out what I'm doing wrong.

A company has one- and two-year bonds outstanding, each providing a coupon of 6% per year payable annually. The yields on the bonds (expressed with continuous compounding) are 3.0% and 3.6%, respectively. Risk-free rates are 2.5% for all maturities. The recovery rate is 35%. Defaults can take place half way through each year. Estimate the risk-neutral default probability each year.

On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,900,000 of 8-year, 9% bonds at a market (effective) interest rate of 11%, receiving cash of $7,968,868. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Required:

1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. For a compound transaction, if an amount box does not require an entry, leave it blank.

2. Journalize the entries to record the following: For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answer to the nearest dollar.

a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method.

b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. Round your answer to the nearest dollar.

3. Determine the total interest expense for Year 1. Round to the nearest dollar.
$

4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?

5. Compute the price of $7,968,868 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences.

QUESTION 4 Ann got a 30 year FRM with annual payments equal to $12,000 per year. After 2 years of payments Ann will refinance the balance into a 28 year FRM with annual payments equal to $11,500 per year. Refinancing will cost Ann $2,500. Ann will prepay the new loan 3 years after refinancing. She will save $4,000 on her loan balance when she prepays. What is Ann’s annualized IRR from refinancing?

QUESTION 5 Lucy bought a house for $100,000. Lucy’s annual cost of ownership net of tax savings is exactly equal to the annual rent she would have paid to live in the same house. The house price grows 4.5% annually (compounded annually). Suppose buying costs are 5% (of the purchase price of the house) and selling costs are 8% (of the selling price of the house). Lucy will sell the house in one year. What is Lucy’s annualized IRR? (hint: it will be negative)

Scott Company sells merchandise with a one-year warranty. Sales consisted of 25,000 units in Year 1 and 20,000 units in Year 2. It is estimated that warranty repairs will average $100 per unit sold, and 30% of repairs will be made in Year 1 and 70% in Year 2 for the Year 1 sales. Similarly, 40% of repairs will be made in Year 2 and 60% in Year 3 for Year 2 sales. In the Year 2 income statement, how much of the warranty expense shown will be due to year 2 sales? Double-click on the box below to edit your answer choices.

A.$2,000,000 B.$2,600,000 C.$1,400,000 D.$800,000

The Dunder-Mifflin Paper Company purchased a timber site for $2,000,000 on August 1. The company expects to cut trees for the next 20 years and ancticipates that a total of 550,000 tons of timber will be provided. The timber site has an estimated residual value of $100,000. During the first year, the company extracted 10,000 tons of timber, and in the second year the company extracted 20,000 tons of timber. The depletion expense for year 1 is Double-click on the box below to edit your answer choices.

A.$34,545 B.$36,364 C.72,726 D.69,080

Westmont Company's book value of its fixed assets are $800,000 at the beginning of the year, and $600,000 at the end of the year. What is the fixed asset turnover ratio for Westmont if the company had sales of $2,100,000 and operating expenses of $1,600,000 for the current year. Double-click on the box below to edit your answer choices.

A.0.2857 B.2.6250 C.3.0000 D.0.7143

Your first job out of college will pay you $61,000 in year 1 (exactly one year from today), growing at a rate of 3.0% per year thereafter. You will also receive a one time bonus of $39,000 at the same time as your first salary. You plan to retire in 39 years (you'll receive 39 years of salary). If the applicable discount rate is 6%, what is the present value of these future earnings today? Round to the nearest cent.