Forten Company, a merchandiser, recently completed its calendar-year 2017 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.

Stuart Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions.

1. Issued common stock for $84,000.

2. Paid $29,000 cash to purchase raw materials used to make products.

3. Transferred $21,000 of raw materials to the production department.

4. Paid $31,500 cash for labor used to make products.

5. Paid $51,000 cash for overhead costs (assume actual and estimated overhead are the same).

6. Finished work on products that cost $79,000 to make.

7. Sold products that cost $66,000 to make for $91,000 cash.

Required

1. Prepare the December 31, Year 1, balance sheet.

2. Prepare the December 31, Year 1, income statement.

The annual sales for Salco, Inc. were $4.57 million last year. The firm's end-of-year balance sheet was as follows:

Current assets

$509,000

Liabilities

$997,000

Net fixed assets

1,485,000

​Owners' equity

997,000

Total Assets

$1,994,000

Total

$1,994,000

Salco's income statement for the year was as follows:

Sales

$4,570,000

​Less: Cost of goods sold

(3,492,000)

Gross profit

$1,078,000

​Less: Operating expenses

\(503,000)

Net operating income

$575,000

​Less: Interest expense

(97,000)

Earnings before taxes

$478,000

​Less: Taxes

​(35%​)

(167,300)

Net income

$310,700

a. Calculate Salco's total asset turnover, operating profit margin, and operating return on assets. b. Salco plans to renovate one of its plants and the renovation will require an added investment in plant and equipment of $1.03 million. The firm will maintain its present debt ratio of 50 percent when financing the new investment and expects sales to remain constant. The operating profit margin will rise to 13.5 percent. What will be the new operating return on assets ratio (i.e., net operating income divided by ÷total assets) for Salco after the plant's renovation? c. Given that the plant renovation in part (b ) occurs and Salco's interest expense rises by $52,000 per year, what will be the return earned on the common stockholders' investment? Compare this rate of return with that earned before the renovation. Based on this comparison, did the renovation have a favorable effect on the profitability of the firm?

Consider the following table containing unemployment rates for a 10-year period.

What is the coefficient of determination for the regression model? Round your answers to two decimal places.

One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 7.3% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity? Select the correct answer.

a. $1,172.61

b. $1,176.61

c. $1,174.61

d. $1,170.61

e. $1,178.61

Please, show all the steps. Thank you.

Deidoro Company has provided the following data for maintenance cost:

Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to:

Multiple Choice

$34,300 per year; $.714 per machine hour

$600 per year; $.714 per machine hour

$600 per year; $1.400 per machine hour

$31,400 per year; $1.400 per machine hour

.

Derst Inc. sells a particular textbook for $38. Variable expenses are $30 per book. At the current volume of 59,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:

Multiple Choice

$472,000

$2,242,000

$2,714,000

$1,770,000

Suppose that an investor has 8-year investment horizon. The investor is
considering a 15-year semi-annual coupon bond selling at $990 (par value is
$1000) and having a coupon rate of 4%. The investor expectations are as follows:
• The first 4 semi-annual coupon payments can be reinvested from the time of
receipt to the end of the investment horizon at an annual interest rate of 4%,
• the first 8 semi-annual coupon payments can be reinvested from the time of
receipt to the end of the investment horizon at an annual interest rate of 4.25%,
• the last 4 semi-annual coupon payments can be reinvested from the time of
receipt to the end of the investment horizon at a 3.75% annual interest rate, and
• the required market interest/discount rate on 7-year bonds at the end of the
investment horizon is 3.6%.
A) What is the YTM of the bond?
B) What is the total return on bond equivalent basis from investing in the
bond?
C) Please explain your result carefully.

Forten Company, a merchandiser, recently completed its calendar-year 2017 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.

1. The loss on the cash sale of equipment was $22,125 (details in b).
2. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash.
3. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance.
4. Borrowed $5,700 cash by signing a short-term note payable.
5. Paid $58,625 cash to reduce the long-term notes payable.
6. Issued 4,200 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $53,500.

Baltimore Manufacturing Company just completed its year ended December 31, 2018. Depreciation for the year amounted to $290,000: 25% relates to sales, 20% relates to administrative facilities, and the remainder relates to the factory. Of the total units produced during FY 2016: 75% were sold in 2018 and the rest remained in finished good inventory. Use this information to determine the dollar amount of the total depreciation that will be contained in Cost of Goods Sold.  (Round dollar values & enter as whole dollars only.)

Forten Company, a merchandiser, recently completed its calendar-year 2017 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.

Additional Information on Year 2017 Transactions

1. The loss on the cash sale of equipment was $8,125 (details in b).
2. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash.
3. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,300 cash by signing a short-term note payable.
5. Paid $51,625 cash to reduce the long-term notes payable.
6. Issued 2,800 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $50,700.

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.)