Questions
Forten Company, a merchandiser, recently completed its calendar-year 2015 operations. For the year, (1) all sales...

Forten Company, a merchandiser, recently completed its calendar-year 2015 operations. 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. The company’s income statement and balance sheets follow.
FORTEN COMPANY
Comparative Balance Sheets
December 31, 2015 and 2014

2015

2014
  Assets
  Cash $ 70,944    $ 72,000   
  Accounts receivable 79,125    61,125   
  Inventory 259,906    230,800   
  Prepaid expenses 1,600    2,100   
  Total current assets 411,575    366,025   
  Equipment 162,500    120,000   
  Accum. depreciation—Equipment (53,800)   (60,000)  
  
  Total assets $ 520,275    $ 426,025   
  
  Liabilities and Equity
  Accounts payable $ 58,075    $ 111,200   
  Short-term notes payable 10,000    6,000   
  Total current liabilities 68,075    117,200   
  Long-term notes payable 24,175    43,000   
  Total liabilities 92,250    160,200   
  Equity
  Common stock, $5 par value 167,500    150,000   
  Paid-in capital in excess of par, common stock 52,500    0   
  Retained earnings 208,025    115,825   
  
  Total liabilities and equity $ 520,275    $ 426,025   
  
FORTEN COMPANY
Income Statement
For Year Ended December 31, 2015
  Sales $ 635,000
  Cost of goods sold 306,000
  
  Gross profit 329,000
  Operating expenses
       Depreciation expense $ 20,000
       Other expenses 128,300 148,300
  
  Other gains (losses)
       Loss on sale of equipment (4,500)
  
  Income before taxes 176,200  
  Income taxes expense 31,000  
  
  Net income $ 145,200
  
Additional Information on Year 2015 Transactions
a.

The loss on the cash sale of equipment was $4,500 (details in b).
b.

Sold equipment costing $45,800, with accumulated depreciation of $26,200, for $15,100 cash.
c.

Purchased equipment costing $88,300 by paying $63,000 cash and signing a long-term note payable for the balance.
d.

Borrowed $4,000 cash by signing a short-term note payable.
e.

Paid $44,125 cash to reduce the long-term notes payable.
f.

Issued 3,500 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $53,000.
Required:
1.

Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

In: Accounting

Consider the following 2 stocks: Closing Prices Stock A Stock B Year 1 33.75 112.09 Year...

Consider the following 2 stocks:

Closing Prices

Stock A

Stock B

Year 1

33.75

112.09

Year 2

31.69

115.74

Year 3

29.17

115.89

Year 4

25.64

120.75

Year 5

27.97

125.12

Year 6

30.36

127.46

Year 7

32.74

110.49

Year 8

35.09

111.26

Year 9

31.89

106.99

Year 10

33.56

105.17

Year 11

30.12

108.25
  1. Consider the following portfolio: 65% is invested in stock A and 35% invested in stock: Calculate portfolio standard deviation

In: Finance

you have purchased a 4-year upon bond paying a coupon rate of 10% per year semiannually...

you have purchased a 4-year upon bond paying a coupon rate of 10% per year semiannually with a yield to maturity of 8% and a Face value of $1000.

What would your rate of return if you sell the bond 30 days after receiving the first coupon? The reinvestment rate is 3% for these 30 days (not annualized). Assume that bonds bid and ask prices on the market at the time are Bid: $1013.96 and ask: $1019.03. the coupon periods has 182 days.

In: Finance

Consider the following 2 stocks: Closing Prices Stock A Stock B Year 1 33.75 112.09 Year...

Consider the following 2 stocks:

Closing Prices

Stock A

Stock B

Year 1

33.75

112.09

Year 2

31.69

115.74

Year 3

29.17

115.89

Year 4

25.64

120.75

Year 5

27.97

125.12

Year 6

30.36

127.46

Year 7

32.74

110.49

Year 8

35.09

111.26

Year 9

31.89

106.99

Year 10

33.56

105.17

Year 11

30.12

108.25
  1. If correlation between the returns was -.301, calculate the covariance of returns
  2. Consider the following portfolio: 65% is invested in stock A and 35% invested in stock: Calculate portfolio standard deviation

In: Finance

A rich aunt has promised you $5000 one year from today. In addition, each year after...

A rich aunt has promised you $5000 one year from today. In addition, each year after that, she

has promised you a payment (on the anniversary of the last payment) that is 5% larger than the

last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments.

If the interest rate is 5%, what is her promise worth today?

In: Finance

Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of...

Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,300.

  1. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.
    %

    What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places.
    %

    Would an investor be more likely to earn the YTM or the YTC?
    -Select-Since the YTM is above the YTC, the bond is likely to be called.Since the YTC is above the YTM, the bond is likely to be called.Since the YTM is above the YTC, the bond is not likely to be called.Since the YTC is above the YTM, the bond is not likely to be called.Since the coupon rate on the bond has declined, the bond is not likely to be called.Item 3
  2. What is the current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places.
    %

    Is this yield affected by whether the bond is likely to be called?
    1. If the bond is called, the capital gains yield will remain the same but the current yield will be different.
    2. If the bond is called, the current yield and the capital gains yield will both be different.
    3. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different.
    4. If the bond is called, the current yield will remain the same but the capital gains yield will be different.
    5. If the bond is called, the current yield and the capital gains yield will remain the same.

    -Select-IIIIIIIVVItem 5
  3. What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, if reqired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign.
    %

    Is this yield dependent on whether the bond is expected to be called?
    1. The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called.
    2. If the bond is expected to be called, the appropriate expected total return is the YTM.
    3. If the bond is not expected to be called, the appropriate expected total return is the YTC.
    4. If the bond is expected to be called, the appropriate expected total return will not change.
    5. The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called.

    -Select-IIIIIIIVVItem 7

In: Finance

Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. For the year,...

Golden Corp.'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, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.

GOLDEN CORPORATION
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 177,000 $ 121,300
Accounts receivable 102,500 84,000
Inventory 620,500 539,000
Total current assets 900,000 744,300
Equipment 370,000 312,000
Accum. depreciation—Equipment (164,500 ) (110,500 )
Total assets $ 1,105,500 $ 945,800
Liabilities and Equity
Accounts payable $ 113,000 $ 84,000
Income taxes payable 41,000 31,600
Total current liabilities 154,000 115,600
Equity
Common stock, $2 par value 607,600 581,000
Paid-in capital in excess of par value, common stock 219,400 179,500
Retained earnings 124,500 69,700
Total liabilities and equity $ 1,105,500 $ 945,800

  

GOLDEN CORPORATION
Income Statement
For Current Year Ended December 31
Sales $ 1,857,000
Cost of goods sold 1,099,000
Gross profit 758,000
Operating expenses
Depreciation expense $ 54,000
Other expenses 507,000 561,000
Income before taxes 197,000
Income taxes expense 40,200
Net income $ 156,800


Additional Information on Current Year Transactions

  1. Purchased equipment for $58,000 cash.
  2. Issued 13,300 shares of common stock for $5 cash per share.
  3. Declared and paid $102,000 in cash dividends.
GOLDEN CORPORATION
Spreadsheet for Statement of Cash Flows
For Current Year Ended December 31
Analysis of Changes
December 31, Prior Year Debit Credit December 31, Current Year
Balance sheet—debit balance accounts
Cash $121,300 $177,000
Accounts receivable 84,000
Inventory 539,000
Equipment 312,000
$1,056,300
Balance sheet—credit balance accounts
Accumulated depreciation—Equipment $110,500
Accounts payable 84,000
Income taxes payable 31,600
Common stock, $2 par value 581,000
Paid-in capital in excess of par value, common stock 179,500
Retained earnings 69,700
$1,056,300
Statement of cash flows
Operating activities
Investing activities
Financing activities

In: Accounting

Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. For the year,...

Golden Corp.'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, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.

GOLDEN CORPORATION
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 177,000 $ 121,300
Accounts receivable 102,500 84,000
Inventory 620,500 539,000
Total current assets 900,000 744,300
Equipment 370,000 312,000
Accum. depreciation—Equipment (164,500 ) (110,500 )
Total assets $ 1,105,500 $ 945,800
Liabilities and Equity
Accounts payable $ 113,000 $ 84,000
Income taxes payable 41,000 31,600
Total current liabilities 154,000 115,600
Equity
Common stock, $2 par value 607,600 581,000
Paid-in capital in excess of par value, common stock 219,400 179,500
Retained earnings 124,500 69,700
Total liabilities and equity $ 1,105,500 $ 945,800

  

GOLDEN CORPORATION
Income Statement
For Current Year Ended December 31
Sales $ 1,857,000
Cost of goods sold 1,099,000
Gross profit 758,000
Operating expenses
Depreciation expense $ 54,000
Other expenses 507,000 561,000
Income before taxes 197,000
Income taxes expense 40,200
Net income $ 156,800


Additional Information on Current Year Transactions

  1. Purchased equipment for $58,000 cash.
  2. Issued 13,300 shares of common stock for $5 cash per share.
  3. Declared and paid $102,000 in cash dividends.
GOLDEN CORPORATION
Statement of Cash Flows
For Current Year Ended December 31
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operations:
Cash flows from investing activities
Cash flows from financing activities:
Net increase (decrease) in cash
Cash balance at December 31, prior year
Cash balance at December 31, current year

In: Accounting

9. Last year Russell Corp. had sales of $303,225, operating costs of $267,500, and year-end assets...

9. Last year Russell Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of $195,000. The debt-to-total-assets ratio was 27%, the interest rate on the debt was 8.2%, and the firm's tax rate was 37%. The new CFO wants to see how the ROE would have been affected if the firm had used a 45% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain constant. By how much would the ROE change in response to the change in the capital structure?

In: Finance

Problem 1: A. 10 equal annual end-of-the-year payments of $82,500 per year beginning in 20 years...

Problem 1:

A. 10 equal annual end-of-the-year payments of $82,500 per year beginning in 20 years will be received

B. One lump-sum of $1,000,000 in 30 years will be received

C. One payment of $200,000 in 10 years, a second payment of $200,000 in 20 years, and a third payment of $200,000 in 30 years will be received

Question: What is the present value of the policies at a discount rate of 4 percent?

Please show all work in excel and in financial calculator

In: Finance