The CEO of Z-Corp is puzzled as to why the company has run into bank overdraft when it has been profitable in the past year. The financial statements appear below:-

Comparative Balance Sheets as at December 31

Assets 2019 2020

Bank          $ 28,600          $     -
Accounts receivable 21,850 38,000
Merchandise inventory 30,700 45,400
Prepaid expenses 5,520 4,900
Property, plant, and equipment           118,000           155,000
Accumulated depreciation            (54,500)          (65,400)
Total           150,170           177,900

Liabilities and Stockholders’ Equity 2019                2020

Bank overdraft           $     -          $ 39,200
Accounts payable 35,170 27,100
Income taxes payable 10,300 8,200
Bonds payable 30,000 10,000
Common stock 45,000 55,000
Retained earnings 29,700 38,400
Total           150,170           177,900

Income Statement for the year ended December 31, 2019

Sales                          250,000
Cost of goods sold      130,000
Gross profit                120,000
Selling expenses 45,000
Administrative expenses 19,000 64,000
Income from operations 56,000
Interest expense                1,500
Income before income taxes 54,500
Income tax expense        15,800
Net income after tax         38,700

Additional information regarding the year ended December 31, 2019

1) Dividends declared and paid were $30,000.
2) During the year an old equipment costing $15,000 was sold for $2,800 at a loss of $1,000. New equipment costing $22,000 was purchased to replace the old equipment.
3) Total depreciation expenses of $22,100 and the loss on sale of equipment are included in
            selling expenses.
4) Purchased property costing $30,000, full cash payment was made.
5) Bonds were redeemed at face value.
6) Additional shares of stock were issued for cash at par.
      
Required:
Prepare a cash flow statement for the year ended December 31, 2019 using the indirect method. (Show all relevant workings)

Morris Company had the following adjusted trial balance:

Additional Resources

The president of Morris Company has asked you to close the books (prepare and process the closing entries).

Required:

After the closing process has been completed, answer the following questions:

Ross Company had the following adjusted trial balance:

Additional Resources

The president of Ross Company has asked you to close the books (prepare and process the closing entries).

Required:

After the closing process has been completed, answer the following questions:

It was believed from the experiment on the obstacle course, in Part I, that there is a relationship between a subject’s reaction time before drinking two beers and the subject’s age:

Experiment carried out in part I

Drunk driving is one of the main causes of car accidents. Interviews with drunk drivers who were involved in accidents and survived revealed that one of the main problems is that drivers do not realise that they are impaired, thinking “I only had 1-2 drinks … I am OK to drive.” A sample of 5 drivers was chosen, and their reaction times (seconds) in an obstacle course were measured before and after drinking two beers. The purpose of this study was to check whether drivers are impaired after drinking two beers. Below is the data gathered from this study

Driver 1 2 3 4 5

Before 6.15 2.86 4.55 3.94 4.19

After 6.85 4.78 5.57 4.01 5.72

Driver 1 2 3 4 5

Age (years) 20 30 25 27 26 1.

(a)What type of study is being outlined here? Justify your answer?

(b)Plot a graph representing the relationship between reaction times before drinking two beers and age.

(c) From the graph in (b), suggest a relationship that could exist between the two measurements?

(d)Use a 1% level of significance and the following points to test the claim that there is a relationship between the reaction times before drinking two beers and age.

(i) State the null and alternative hypotheses in context

.(ii) Calculate the test statistic.

(e) Identify the rejection region(s).

(f) Clearly state your conclusions (in context).

(g)What percentage of variation in reaction times before drinking two beers is unexplained by the relationship between reaction times before drinking two beers and age?

(h) Derive a model/equation that could be used to predict reaction times before drinking two beers for a person, if the age of the person is known.

(i) Using the model derived in (h), what would the predicted reaction time, in the obstacle course, before drinking two beers of a 22-year-old be?

Thurston Howell IV is the sole heir to the Howell Enterprise fortune. He does not participate in the business, preferring to tend to his comic book collection. He does however own a large piece of the company.

Recently he had become concerned about how the company has performed specifically related to some transactions relating to stockholders’ equity.

Here is the data relating to stockholders’ equity:

Howell Enterprises

Stockholders’ Equity

As of December 31, 2019

Common Stock, 2,000,000 shares outstanding                         10,000,000

Retained Earnings                                                                          7,500,000

Total Stockholders Equity                                                              17,500,000

Thurston currently owns 300,000 shares of Howell Enterprises

Here are the relevant transactions for 2020:

1. The company issued 500,000 shares @ $8.00 per share
2. The company purchased 100,000 shares @ $15 per share
3. The company declared a $2.50 per share cash dividend
4. The company declared a 2:1 stock split

Required

1. Calculate the book value per share as of December 31, 2019. (total equity / number of shares outstanding)
2. Calculate the total value of Thurston Howell IV’s stock as of December 31, 2019. (his shares x book value per share)
3. Calculate the percentage of the company that Mr. Howell owns as of December 31, 2019. (his shares / total number of shares outstanding)
4. Prepare journal entries for the transactions listed above
5. Calculate the ending balances in the equity accounts
6. Calculate the book value per share after the transactions have been recorded
7. Calculate the total value of Thurston Howell IV’s stock after the transactions have been recorded. (his shares x new book value per share)
8. Calculate the percentage of the company that Mr. Howell owns after the transactions have been recorded. (his shares x new total outstanding shares).
9. Calculate the amount of loss that Mr. Howell has suffered (if any) as a result of the above transactions. (compare #2 to # 7).
10. Write a summary in Word explaining your results. Which transactions caused Mr. Howell to lose money?

Record the transactions for 2020 and calculate the ending balances in all of the stockholders equity accounts.

Mr. Howell’s Investment

Turn in the summary with this page

Bonds Problem

Hartz Corporation had the following transactions relating to borrowings during 2020:

• Hartz issued $2,000,000 in ten-year 5% bonds when the price was 98 (Bond A). Interest is paid once a year.
• Hartz issued $2,000,000 in ten-year 5% bonds when the price was 102. (Bond B). Interest is paid once a year.
• Hartz issued $2,000,000 in ten -year 5% bonds that were issued at par (100) (Bond C). Interest is paid once a year

Required

• Calculate the amount of money received when the bonds were issued for each bond.
• Calculate the amount of cash paid on the interest date for each bond.
• Calculate the amount of interest expense for each bond.

A fitness course claims that it can improve an individual's physical ability. To test the effect of a physical fitness course on one's physical ability, the number of sit-ups that a person could do in one minute, both before and after the course, was recorded. Ten individuals are randomly selected to participate in the course. The results are displayed in the following table. Can it be concluded, from the data, that participation in the physical fitness course resulted in significant improvement?

Let d=(number of sit-ups that can be done after taking the course)−(number of sit-ups that can be done prior to taking the course)d=(number of sit-ups that can be done after taking the course)−(number of sit-ups that can be done prior to taking the course). Use a significance level of α=0.01 for the test. Assume that the numbers of sit-ups are normally distributed for the population both before and after taking the fitness course.

Copy Data
Step 1:

H0: μd ≤ 0

Ha: μd > 0

Step 2: standard deviation= 4.5

Step 3: t test statistic= 6.114

Step 4 of 5 :  Determine the decision rule for rejecting the null hypothesis H₀. Round the numerical portion of your answer to three decimal places.

ANSWER: Reject H₀ if t > 2.821

Step 6: Reject Null hypothesis

The following information has been obtained for Sarasota Corporation.

Prepare the journal entry to record 2021 income tax expense, income taxes payable, and deferred taxes. (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 bottom portion of Sarasota’s 2021 income statement, beginning with “Income from continuing operations before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Indicate how deferred income taxes should be presented on the December 31, 2021, balance sheet.

Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales $ 6,100,000 Variable costs (50% of sales) 3,050,000 Fixed costs 1,910,000 Earnings before interest and taxes (EBIT) $ 1,140,000 Interest (10% cost) 420,000 Earnings before taxes (EBT) $ 720,000 Tax (40%) 288,000 Earnings after taxes (EAT) $ 432,000 Shares of common stock 310,000 Earnings per share $ 1.39 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $3.1 million in additional financing. His investment banker has laid out three plans for him to consider: Sell $3.1 million of debt at 13 percent. Sell $3.1 million of common stock at $20 per share. Sell $1.55 million of debt at 12 percent and $1.55 million of common stock at $25 per share. Variable costs are expected to stay at 50 percent of sales, while fixed expenses will increase to $2,410,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1.55 million per year for the next five years. Delsing is interested in a thorough analysis of his expansion plans and methods of financing.He would like you to analyze the following: a. The break-even point for operating expenses before and after expansion (in sales dollars). (Enter your answers in dollars not in millions, i.e, $1,234,567.) b. The degree of operating leverage before and after expansion. Assume sales of $6.1 million before expansion and $7.1 million after expansion. Use the formula: DOL = (S ? TVC) / (S ? TVC ? FC). (Round your answers to 2 decimal places.) c-1. The degree of financial leverage before expansion. (Round your answers to 2 decimal places.) c-2. The degree of financial leverage for all three methods after expansion. Assume sales of $7.1 million for this question. (Round your answers to 2 decimal places.) d. Compute EPS under all three methods of financing the expansion at $7.1 million in sales (first year) and $10.0 million in sales (last year). (Round your answers to 2 decimal places.)

Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales $ 5,700,000 Variable costs (50% of sales) 2,850,000 Fixed costs 1,870,000 Earnings before interest and taxes (EBIT) $ 980,000 Interest (10% cost) 340,000 Earnings before taxes (EBT) $ 640,000 Tax (35%) 224,000 Earnings after taxes (EAT) $ 416,000 Shares of common stock 270,000 Earnings per share $ 1.54 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $2.7 million in additional financing. His investment banker has laid out three plans for him to consider: Sell $2.7 million of debt at 9 percent. Sell $2.7 million of common stock at $25 per share. Sell $1.35 million of debt at 8 percent and $1.35 million of common stock at $30 per share. Variable costs are expected to stay at 50 percent of sales, while fixed expenses will increase to $2,370,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1.35 million per year for the next five years. Delsing is interested in a thorough analysis of his expansion plans and methods of financing.He would like you to analyze the following: a. The break-even point for operating expenses before and after expansion (in sales dollars). (Enter your answers in dollars not in millions, i.e, $1,234,567.) b. The degree of operating leverage before and after expansion. Assume sales of $5.7 million before expansion and $6.7 million after expansion. Use the formula: DOL = (S ? TVC) / (S ? TVC ? FC). (Round your answers to 2 decimal places.) c-1. The degree of financial leverage before expansion. (Round your answers to 2 decimal places.) c-2. The degree of financial leverage for all three methods after expansion. Assume sales of $6.7 million for this question. (Round your answers to 2 decimal places.) d. Compute EPS under all three methods of financing the expansion at $6.7 million in sales (first year) and $10.7 million in sales (last year). (Round your answers to 2 decimal places.)

Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows: Sales $ 6,500,000 Variable costs (50% of sales) 3,250,000 Fixed costs 1,950,000 Earnings before interest and taxes (EBIT) $ 1,300,000 Interest (10% cost) 500,000 Earnings before taxes (EBT) $ 800,000 Tax (30%) 240,000 Earnings after taxes (EAT) $ 560,000 Shares of common stock 350,000 Earnings per share $ 1.60 The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $3.5 million in additional financing. His investment banker has laid out three plans for him to consider: Sell $3.5 million of debt at 11 percent. Sell $3.5 million of common stock at $25 per share. Sell $1.75 million of debt at 10 percent and $1.75 million of common stock at $40 per share. Variable costs are expected to stay at 50 percent of sales, while fixed expenses will increase to $2,450,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1.75 million per year for the next five years. Delsing is interested in a thorough analysis of his expansion plans and methods of financing.He would like you to analyze the following: a. The break-even point for operating expenses before and after expansion (in sales dollars). (Enter your answers in dollars not in millions, i.e, $1,234,567.) b. The degree of operating leverage before and after expansion. Assume sales of $6.5 million before expansion and $7.5 million after expansion. Use the formula: DOL = (S − TVC) / (S − TVC − FC). (Round your answers to 2 decimal places.) c-1. The degree of financial leverage before expansion. (Round your answers to 2 decimal places.) c-2. The degree of financial leverage for all three methods after expansion. Assume sales of $7.5 million for this question. (Round your answers to 2 decimal places.) d. Compute EPS under all three methods of financing the expansion at $7.5 million in sales (first year) and $10.4 million in sales (last year). (Round your answers to 2 decimal places.) i need help with c-2 and d