Bar Delivery Company purchased a new delivery truck for $36,000 on April 1, 2019. The truck is expected to have a service life of 5 years or 120,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 18,000 miles in 2020. Bar computes depreciation expense to the nearest whole month.
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
| 2019 | $ |
| 2020 | $ |
In: Accounting
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 Total North Store South Store East Store Sales $ 3,000,000 $ 720,000 $ 1,200,000 $ 1,080,000 Cost of goods sold 1,657,200 403,200 660,000 594,000 Gross margin 1,342,800 316,800 540,000 486,000 Selling and administrative expenses: Selling expenses: 817,000 231,400 315,000 270,600 Administrative expenses 383,000 106,000 150,900 126,100 Total expenses 1,200,000 337,400 465,900 396,700 Net operating income (loss) $ 142,800 $ (20,600 ) $ 74,100 $ 89,300 The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use: a. The breakdown of the selling and administrative expenses is as follows: Total North Store South Store East Store Selling expenses: Sales salaries $ 239,000 $ 70,000 $ 89,000 $ 80,000 Direct advertising 187,000 51,000 72,000 64,000 General advertising* 45,000 10,800 18,000 16,200 Store rent 300,000 85,000 120,000 95,000 Depreciation of store fixtures 16,000 4,600 6,000 5,400 Delivery salaries 21,000 7,000 7,000 7,000 Depreciation of delivery equipment 9,000 3,000 3,000 3,000 Total selling expenses $ 817,000 $ 231,400 $ 315,000 $ 270,600 *Allocated on the basis of sales dollars. Total North Store South Store East Store Administrative expenses: Store management salaries $ 70,000 $ 21,000 $ 30,000 $ 19,000 General office salaries* 50,000 12,000 20,000 18,000 Insurance on fixtures and inventory 25,000 7,500 9,000 8,500 Utilities 106,000 31,000 40,000 35,000 Employment taxes 57,000 16,500 21,900 18,600 General office —other* 75,000 18,000 30,000 27,000 Total administrative expenses $ 383,000 $ 106,000 $ 150,900 $ 126,100 *Allocated on the basis of sales dollars. b. The lease on the building housing the North Store can be broken with no penalty. c. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed. d. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,000 per quarter. The general manager of the North Store would be retained at her normal salary of $12,000 per quarter. All other employees in the store would be discharged. e. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $4,000 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete. f. The company’s employment taxes are 15% of salaries. g. One-third of the insurance in the North Store is on the store’s fixtures. h. The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $6,000 per quarter. Required: 1. Prepare a schedule showing the change in revenues and expenses and the impact on the company’s overall net operating income that would result if the North Store were closed. (Any losses/ reductions should be indicated by a minus sign.) 2. Based on your computations in (1) above, what recommendation would you make to the management of Superior Markets, Inc.? The North Store should be closed. The North Store should not be closed. 3. Assume that if the North Store were closed, at least one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. The East Store has enough capacity to handle the increased sales. You may assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in that store. a. Calculate the net advantage of closing the North Store. (Any losses should be indicated by a minus sign.) b. What recommendation would you make to the management of Superior Markets, Inc.? The North Store should be closed. The North Store should not be closed.
In: Accounting
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below:
|
Superior Markets, Inc. Income Statement For the Quarter Ended September 30 |
||||||||||||
| Total |
North Store |
South Store |
East Store |
|||||||||
| Sales | $ | 3,000,000 | $ | 720,000 | $ | 1,200,000 | $ | 1,080,000 | ||||
| Cost of goods sold | 1,657,200 | 403,200 | 660,000 | 594,000 | ||||||||
| Gross margin | 1,342,800 | 316,800 | 540,000 | 486,000 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling expenses: | 817,000 | 231,400 | 315,000 | 270,600 | ||||||||
| Administrative expenses | 383,000 | 106,000 | 150,900 | 126,100 | ||||||||
| Total expenses | 1,200,000 | 337,400 | 465,900 | 396,700 | ||||||||
| Net operating income (loss) | $ | 142,800 | $ | (20,600 | ) | $ | 74,100 | $ | 89,300 | |||
The North Store has consistently shown losses over the past two
years. For this reason, management is giving consideration to
closing the store. The company has asked you to make a
recommendation as to whether the store should be closed or kept
open. The following additional
information is available for your use:
a. The breakdown of the selling and administrative expenses is as follows:
| Total |
North Store |
South Store |
East Store |
|||||
| Selling expenses: | ||||||||
| Sales salaries | $ | 239,000 | $ | 70,000 | $ | 89,000 | $ | 80,000 |
| Direct advertising | 187,000 | 51,000 | 72,000 | 64,000 | ||||
| General advertising* | 45,000 | 10,800 | 18,000 | 16,200 | ||||
| Store rent | 300,000 | 85,000 | 120,000 | 95,000 | ||||
| Depreciation of store fixtures | 16,000 | 4,600 | 6,000 | 5,400 | ||||
| Delivery salaries | 21,000 | 7,000 | 7,000 | 7,000 | ||||
| Depreciation of delivery equipment | 9,000 | 3,000 | 3,000 | 3,000 | ||||
| Total selling expenses | $ | 817,000 | $ | 231,400 | $ | 315,000 | $ | 270,600 |
*Allocated on the basis of sales dollars.
| Total |
North Store |
South Store |
East Store |
|||||
| Administrative expenses: | ||||||||
| Store management salaries | $ | 70,000 | $ | 21,000 | $ | 30,000 | $ | 19,000 |
| General office salaries* | 50,000 | 12,000 | 20,000 | 18,000 | ||||
| Insurance on fixtures and inventory | 25,000 | 7,500 | 9,000 | 8,500 | ||||
| Utilities | 106,000 | 31,000 | 40,000 | 35,000 | ||||
| Employment taxes | 57,000 | 16,500 | 21,900 | 18,600 | ||||
| General office —other* | 75,000 | 18,000 | 30,000 | 27,000 | ||||
| Total administrative expenses | $ | 383,000 | $ | 106,000 | $ | 150,900 | $ | 126,100 |
*Allocated on the basis of sales dollars.
b. The lease on the building housing the North Store can be broken with no penalty.
c. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.
d. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,000 per quarter. The general manager of the North Store would be retained at her normal salary of $12,000 per quarter. All other employees in the store would be discharged.
e. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $4,000 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.
f. The company’s employment taxes are 15% of salaries.
g. One-third of the insurance in the North Store is on the store’s fixtures.
h. The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $6,000 per quarter.
Required:
1. Prepare a schedule showing the change in revenues and expenses and the impact on the company’s overall net operating income that would result if the North Store were closed. (Any losses/ reductions should be indicated by a minus sign.)
2. Based on your computations in (1) above, what recommendation would you make to the management of Superior Markets, Inc.?
| The North Store should be closed. | |
| The North Store should not be closed. |
3. Assume that if the North Store were closed, at least one-fourth
of its sales would transfer to the East Store, due to strong
customer loyalty to Superior Markets. The East Store has enough
capacity to handle the increased sales. You may assume that the
increased sales in the East Store would yield the same gross margin
as a percentage of sales as present sales in that store.
a. Calculate the net advantage of closing the North Store.
(Any losses should be indicated by a minus
sign.)
b. What recommendation would you make to the management of Superior Markets, Inc.?
| The North Store should be closed. | |
| The North Store should not be
closed. |
In: Accounting
|
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: |
|
Superior Markets, Inc. Income Statement For the Quarter Ended September 30 |
||||||||||||
| Total |
North Store |
South Store |
East Store |
|||||||||
| Sales | $ | 4,080,000 | $ | 1,080,000 | $ | 1,560,000 | $ | 1,440,000 | ||||
| Cost of goods sold | 2,254,800 | 604,800 | 858,000 | 792,000 | ||||||||
| Gross margin | 1,825,200 | 475,200 | 702,000 | 648,000 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling expenses: | 1,160,800 | 346,600 | 428,400 | 385,800 | ||||||||
| Administrative expenses | 610,140 | 178,240 | 228,580 | 203,320 | ||||||||
| Total expenses | 1,770,940 | 524,840 | 656,980 | 589,120 | ||||||||
| Net operating income (loss) | $ | 54,260 | $ | (49,640 | ) | $ | 45,020 | $ | 58,880 | |||
|
The North Store has consistently shown losses over the past two
years. For this reason, management is giving consideration to
closing the store. The company has asked you to make a
recommendation as to whether the store should be closed or kept
open. The following additional |
| a. | The breakdown of the selling and administrative expenses is as follows: |
| Total |
North Store |
South Store |
East Store |
|||||
| Selling expenses: | ||||||||
| Sales salaries | $ | 347,000 | $ | 106,000 | $ | 125,000 | $ | 116,000 |
| Direct advertising | 241,000 | 69,000 | 90,000 | 82,000 | ||||
| General advertising* | 61,200 | 16,200 | 23,400 | 21,600 | ||||
| Store rent | 354,000 | 103,000 | 138,000 | 113,000 | ||||
| Depreciation of store fixtures | 46,600 | 15,400 | 15,000 | 16,200 | ||||
| Delivery salaries | 75,000 | 25,000 | 25,000 | 25,000 | ||||
| Depreciation of delivery equipment | 36,000 | 12,000 | 12,000 | 12,000 | ||||
| Total selling expenses | $ | 1,160,800 | $ | 346,600 | $ | 428,400 | $ | 385,800 |
| *Allocated on the basis of sales dollars. |
| Total |
North Store |
South Store |
East Store |
|||||
| Administrative expenses: | ||||||||
| Store management salaries | $ | 124,000 | $ | 39,000 | $ | 48,000 | $ | 37,000 |
| General office salaries* | 81,600 | 21,600 | 31,200 | 28,800 | ||||
| Insurance on fixtures and inventory | 48,400 | 12,900 | 18,000 | 17,500 | ||||
| Utilities | 160,000 | 49,000 | 58,000 | 53,000 | ||||
| Employment taxes | 94,140 | 28,740 | 34,380 | 31,020 | ||||
| General office —other* | 102,000 | 27,000 | 39,000 | 36,000 | ||||
| Total administrative expenses | $ | 610,140 | $ | 178,240 | $ | 228,580 | $ | 203,320 |
| *Allocated on the basis of sales dollars. |
| b. | The lease on the building housing the North Store can be broken with no penalty. |
| c. |
The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed. |
| d. |
The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $20,600 per quarter. The general manager of the North Store would be retained at her normal salary of $21,600 per quarter. All other employees in the store would be discharged. |
| e. |
The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $22,000 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete. |
| f. | The company’s employment taxes are 15% of salaries. |
| g. | One-third of the insurance in the North Store is on the store’s fixtures. |
| h. |
The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $10,800 per quarter. |
| Required: | |
| 1. |
Prepare a schedule showing the change in revenues and expenses and the impact on the company’s overall net operating income that would result if the North Store were closed. (Any losses/ reductions should be indicated by a minus sign.) |
| 2. |
Based on your computations in (1) above, what recommendation would you make to the management of Superior Markets, Inc.? |
||||
|
| 3. |
Assume that if the North Store were closed, at least one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. The East Store has enough capacity to handle the increased sales. You may assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in that store. |
| a. |
Calculate the net advantage of closing the North Store. (Any reductions or outflows should be indicated by a minus sign.) |
| b. | What recommendation would you make to the management of Superior Markets, Inc.? | ||||
|
In: Accounting
|
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: |
|
Superior Markets, Inc. Income Statement For the Quarter Ended September 30 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total |
North Store |
South Store |
East Store |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales | $ | 3,000,000 | $ | 720,000 | $ | 1,200,000 | $ | 1,080,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of goods sold | 1,657,200 | 403,200 | 660,000 | 594,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross margin | 1,342,800 | 316,800 | 540,000 | 486,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling and administrative expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling expenses: | 817,000 | 231,400 | 315,000 | 270,600 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Administrative expenses | 383,000 | 106,000 | 150,900 | 126,100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total expenses | 1,200,000 | 337,400 | 465,900 | 396,700 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net operating income (loss) | $ | 142,800 | $ | (20,600 | ) | $ | 74,100 | $ | 89,300 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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In: Accounting
|
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: |
|
Superior Markets, Inc. Income Statement For the Quarter Ended September 30 |
||||||||||||
| Total |
North Store |
South Store |
East Store |
|||||||||
| Sales | $ | 3,300,000 | $ | 760,000 | $ | 1,320,000 | $ | 1,220,000 | ||||
| Cost of goods sold | 1,815,000 | 433,000 | 711,000 | 671,000 | ||||||||
| Gross margin | 1,485,000 | 327,000 | 609,000 | 549,000 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling expenses: | 823,000 | 234,400 | 316,500 | 272,100 | ||||||||
| Administrative expenses | 398,000 | 109,000 | 155,400 | 133,600 | ||||||||
| Total expenses | 1,221,000 | 343,400 | 471,900 | 405,700 | ||||||||
| Net operating income (loss) | $ | 264,000 | $ | (16,400 | ) | $ | 137,100 | $ | 143,300 | |||
|
The North Store has consistently shown losses over the past two
years. For this reason, management is giving consideration to
closing the store. The company has asked you to make a
recommendation as to whether the store should be closed or kept
open. The following additional |
| a. | The breakdown of the selling and administrative expenses is as follows: |
| Total |
North Store |
South Store |
East Store |
|||||
| Selling expenses: | ||||||||
| Sales salaries | $ | 227,200 | $ | 65,500 | $ | 81,800 | $ | 79,900 |
| Direct advertising | 182,000 | 54,000 | 75,000 | 53,000 | ||||
| General advertising* | 49,500 | 11,400 | 19,800 | 18,300 | ||||
| Store rent | 315,000 | 88,000 | 123,000 | 104,000 | ||||
| Depreciation of store fixtures | 17,500 | 4,900 | 6,300 | 6,300 | ||||
| Delivery salaries | 21,900 | 7,300 | 7,300 | 7,300 | ||||
| Depreciation of delivery equipment | 9,900 | 3,300 | 3,300 | 3,300 | ||||
| Total selling expenses | $ | 823,000 | $ | 234,400 | $ | 316,500 | $ | 272,100 |
| *Allocated on the basis of sales dollars. |
| Total |
North Store |
South Store |
East Store |
|||||
| Administrative expenses: | ||||||||
| Store management salaries | $ | 74,500 | $ | 22,500 | $ | 31,500 | $ | 20,500 |
| General office salaries* | 49,500 | 11,400 | 19,800 | 18,300 | ||||
| Insurance on fixtures and inventory | 28,000 | 8,400 | 10,500 | 9,100 | ||||
| Utilities | 107,535 | 31,695 | 39,540 | 36,300 | ||||
| Employment taxes | 55,965 | 16,005 | 21,060 | 18,900 | ||||
| General office —other* | 82,500 | 19,000 | 33,000 | 30,500 | ||||
| Total administrative expenses | $ | 398,000 | $ | 109,000 | $ | 155,400 | $ | 133,600 |
| *Allocated on the basis of sales dollars. |
| b. | The lease on the building housing the North Store can be broken with no penalty. |
| c. |
The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed. |
| d. |
The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $10,400 per quarter. The general manager of the North Store would be retained at her normal salary of $11,400 per quarter. All other employees in the store would be discharged. |
| e. |
The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $4,300 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete. |
| f. | The company’s employment taxes are 15% of salaries. |
| g. | One-third of the insurance in the North Store is on the store’s fixtures. |
| h. |
The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $5,700 per quarter. |
| Required: | |
| 1. |
Prepare a schedule showing the change in revenues and expenses and the impact on the company’s overall net operating income that would result if the North Store were closed. (Any losses/ reductions should be indicated by a minus sign.) |
| 2. |
Based on your computations in (1) above, what recommendation would you make to the management of Superior Markets, Inc.? |
||||
|
| 3. |
Assume that if the North Store were closed, at least one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. The East Store has enough capacity to handle the increased sales. You may assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in that store. |
| a. |
Calculate the net advantage of closing the North Store. (Any reductions or outflows should be indicated by a minus sign.) |
| b. | What recommendation would you make to the management of Superior Markets, Inc.? | ||||
|
In: Accounting
Progressive Studios Corporation’s sales in Year 2019 is 800 million dollars. Let’s make the following assumptions on the firm’s performance to forecast its free cash flow in Year 2020:
• Sales grow 25% from Year 2019 to Year 2020.
• Corporate tax rate is 25%.
• COGS is 40% of the sales in Year 2020.
• SG&A is 20% of the sales in Year 2020.
• Depreciation is 10% of the sales in Year 2020.
• Net working capital amounts to 30% of the sales for each year (i.e., NWC for 2019 is 30% sales in 2019, NWC for 2020 is prediced to be 30% sales in 2020).
• Capital expenditure is 5% of the sales in Year 2020.
a. What is the forcasted EBIT of Progressive Studios Corporation in Year 2020? Progressive Studios Corporation’s forecasted EBIT in Year 2020 is $___.(Round to the nearest dollar.)
b. What is Progressive Studios Corporation’s forecasted free cash flow in Year 2020? Progressive Studios Corporation’s forecasted free cash flow in Year 2020 is $___.(Round to the nearest dollar.)
c. Assume that starting from Year 2021 and beyond, Progressive Studios' free cash flow will grow 2% per year. The weighted average cost of capital is 12%. The corporation has debt outstanding of $100 million and cash of $50 million in Year 2019. The number of shares outstanding is 100 million shares. What is the price of Progressive Studios stock will be consistent with the forecast? The price per share of $___ will be consistent with the forecast
In: Finance
Sarah Allen Company was formed on December 1, 2019. The
following information is available from Allen’s inventory records
for Product BAP.
|
Units |
Unit Cost |
|||
| January 1, 2020 (beginning inventory) | 1,620 | $ 8 | ||
| Purchases: | ||||
| January 5, 2020 | 3,240 | 9 | ||
| January 25, 2020 | 3,510 | 10 | ||
| February 16, 2020 | 2,160 | 11 | ||
| March 26, 2020 | 1,620 | 12 |
A physical inventory on March 31, 2020, shows 4,320 units on
hand.
a. Prepare schedule to compute the ending inventory at March 31, 2020, under FIFO inventory method.
|
SARAH ALLEN COMPANY |
| Units | Units Cost | Total Cost |
b. Prepare schedule to compute the ending inventory at March 31,
2020, under LIFO inventory method.
|
SARAH ALLEN COMPANY |
| Units | Units Cost | total cost |
Calculate average-cost per unit. (Round answer to 2 decimal places, e.g. 2.)
Weighted Average-Cost per Units $________
Compute the ending inventory at March 31, 2020, under Weighted-average inventory method. (Round answer to 0 decimal places, e.g. 2,760.)
Weighted Average
Ending Inventory at March 31, 2020 $______________
In: Accounting
Write a function that accepts a dictionary and produces a sorted list of tuples
The dictionary looks like this:
{‘US’: [{'Chicago, IL': ('2/1/2020 19:43', 2, 0, 0)}, {'San Benito, CA': ('2/3/2020 3:53', 2, 0, 0)}, {'Santa Clara, CA': ('2/3/2020 0:43', 2, 0, 0)}, {'Boston, MA': ('2/1/2020 19:43', 1, 0, 0)}, {'Los Angeles, CA': ('2/1/2020 19:53', 1, 0, 0)}, {'Orange, CA': ('2/1/2020 19:53', 1, 0, 0)}, {'Seattle, WA': ('2/1/2020 19:43', 1, 0, 0)}, {'Tempe, AZ': ('2/1/2020 19:43', 1, 0, 0)}], 'Australia' : [{'New South Wales': ('2/1/2020 18:12', 4, 0, 2)}, {'Victoria': ('2/1/2020 18:12', 4, 0, 0)}, {'Queensland': ('2/4/2020 16:53', 3, 0, 0)}, {'South Australia': ('2/2/2020 22:33', 2, 0, 0)}]
For these counts, I need to use the numbers that are bolded above). The returned sorted list (in descending order) will contain key-value pairs such that each key is a country and the corresponding value is the number of cases observed within that country.
For example: [('Australia', 13),(‘US’: 11)]
In: Computer Science
Your firm has been engaged to examine the financial statements
of Headland Corporation for the year 2020. The bookkeeper who
maintains the financial records has prepared all the unaudited
financial statements for the corporation since its organization on
January 2, 2015. The client provides you with the
information.
|
Headland Corporation |
||||||
|---|---|---|---|---|---|---|
|
Assets |
Liabilities |
|||||
|
Current assets |
$1,860,000 |
Current liabilities |
$959,000 | |||
|
Other assets |
5,147,280 |
Long-term liabilities |
1,472,000 | |||
|
Stockholders’ equity |
4,576,280 | |||||
| $7,007,280 | $7,007,280 | |||||
| An analysis of current assets discloses the following. | ||
| Cash (restricted in the amount of $297,000 for plant expansion) | $566,000 | |
| Investments in land | 181,000 | |
| Accounts receivable less allowance of $31,000 | 476,000 | |
| Inventories (LIFO flow assumption) | 637,000 | |
| $1,860,000 | ||
| Other assets include: | ||
| Prepaid expenses | $64,000 | |
| Plant and equipment less accumulated depreciation of $1,435,000 | 4,054,000 | |
| Cash surrender value of life insurance policy | 84,000 | |
| Unamortized bond discount | 98,280 | |
| Notes receivable (short-term) | 162,000 | |
| Goodwill | 247,000 | |
| Land | 438,000 | |
| $5,147,280 | ||
| Current liabilities include: | ||
| Accounts payable | $510,000 | |
| Notes payable (due 2023) | 156,000 | |
| Estimated income taxes payable | 144,000 | |
| Premium on common stock | 149,000 | |
| $959,000 | ||
| Long-term liabilities include: | ||
| Unearned revenue | $492,000 | |
| Dividends payable (cash) | 200,000 | |
| 8% bonds payable (due May 1, 2025) | 780,000 | |
| $1,472,000 | ||
| Stockholders’ equity includes: | ||
| Retained earnings | $2,746,280 | |
| Common stock, par value $10; authorized 200,000 shares, 183,000 shares issued | 1,830,000 | |
| $4,576,280 |
The supplementary information below is also provided.
| 1. | On May 1, 2020, the corporation issued at 87.40, $780,000 of bonds to finance plant expansion. The long-term bond agreement provided for the annual payment of interest every May 1. The existing plant was pledged as security for the loan. Use the straight-line method for discount amortization. | ||
| 2. | The bookkeeper made the following mistakes. | ||
| a. | In 2018, the ending inventory was overstated by $181,000. The ending inventories for 2019 and 2020 were correctly computed. | ||
| b. | In 2020, accrued wages in the amount of $224,000 were omitted from the balance sheet, and these expenses were not charged on the income statement. | ||
| c. | In 2020, a gain of $176,000 (net of tax) on the sale of certain plant assets was credited directly to retained earnings. | ||
| 3. | A major competitor has introduced a line of products that will compete directly with Headland’s primary line, now being produced in a specially designed new plant. Because of manufacturing innovations, the competitor’s line will be of comparable quality but priced 50% below Headland’s line. The competitor announced its new line on January 14, 2021. Headland indicates that the company will meet the lower prices that are high enough to cover variable manufacturing and selling expenses, but permit recovery of only a portion of fixed costs. | ||
| 4. | You learned on January 28, 2021, prior to completion of the audit, of heavy damage because of a recent fire to one of Headland’s two plants; the loss will not be reimbursed by insurance. The newspapers described the event in detail. | ||
Analyze the above information to prepare a corrected balance sheet
for Headland in accordance with proper accounting and reporting
principles. Prepare a description of any notes that might need to
be prepared. The books are closed and adjustments to income are to
be made through retained earnings.
In: Accounting