Suppose we have the following annual sales data for an automobile dealership:

Year                Sales                Trend

2009                121                     1

2010                187                     2

2011                165                     3

2012                134                     4

2013                155                     5

2014                167                     6

2015                200                     7

2016                206                     8

2017                221                    9

2018                231                 10

We want to forecast sales for 2019 and 2020 using either a simple trend model or a quadratic trend model. Use a within sample forecasting technique to determine the best model using the RMSE measure discussed in lecture. Once this model has been determined, provide actual forecasts for 2019 and 2020. Report the two RMSE values, along with the actual forecasts. Submit your Excel file used to create these answers.

Given below are the Statements of Financial Position and the Statement of Profit or Loss for BA107 Trading Bhd:

2020

(RM)

Sales 505,000

Cost of sales (105,000)

Gross profit 400,000   

Expenses   (252,000)

Profit before tax 148,000

Taxation (40,000)

Profit after tax   108,000

2020 2019

(RM) (RM)

Property, plant and equipment 355,000 300,000

Trade receivables 80,000 75,000

Inventory 145,000 120,000

Bank balance   24,500      15,000

604,500    510,000

Ordinary share capital 250,000 250,000

Retained profits 222,500    140,000

472,500 390,000

Other payables 87,000 90,000

Trade payable 45,000      30,000

604,500    510,000

Additional information:

(a) Dividend paid by the Company was RM25,500.

(b) The dividend declared have all been paid. Included in other payables of 2020 is an amount of current tax payable of RM20,000.

  
(c) Depreciation was RM32,000 and a non-current asset with carrying amount of RM12,500 was disposed of for a cash consideration of RM40,500 during the year. The depreciation and gain on disposal of property, plant and equipment are included in “Expenses”.

Required:

Prepare the Statement of Cash Flows for the year ended 31 December 2020 by using the direct and indirect methods.

Innovation activities differ between startups and IBM, or do they? Discuss innovation activities that are better suited for small firms and large firms. What innovation activity would allow a small firm to outperform a multinational firm?

Need some assistance to discuss this topic for the FUTURE, not past technology.

Your manufacturing organization has a semi-monthly payroll, paying on the 15th and last day of each month. Your organization pays employees in British Columbia.

On the June 15th pay date of the current year the following deductions occurred. Using the Current Year calendar in the course material, explain when each payment must be received by the issuer or administrator:

Family Maintenance Enforcement

Union Dues (collective agreement states payment due three business days after pay date)

Registered Defined Contribution Pension Plan (employer matches employee contributions)

Group RRSP

The Henley Corporation is a privately held company specializing in lawn care products and services. It was a WACC of 12.5%. Further, the most recent financial statements are shown below.

The ratios and selected information for the current and projected years are shown below (sales growth beyond 2011 = 6% per year; all the ratios beyond 2011 are the same as in 2011).

(a)

Calculate free cash flow (in millions of dollars) for each projected year till 2010. (Round your answer to two decimal places.)

2008$  million

2009$  million

2010$  million

What are the FCFs after 2010?

FCFs will grow at the same rate as sales, at  %.

(b)

Calculate the enterprise value (in millions of dollars) at the end of fiscal year 2007 (i.e., 12/31/2007). (Round your answer to two decimal places.)

$

(c)

Calculate the stock price (in dollars) at the end of fiscal year 2007 (i.e., 12/31/2007). (Round your answer to two decimal places.)

$

the construction activity for the year-end 31 December 2020, are as follows:

Required:

1) Prepare a schedule by project, showing clearly the amount of gross profit (loss) of the project before deducting selling, general, and administrative expenses for the year ended 31 December 2020 using the percentage-of-completion method.(based on estimated costs.)

2)Based on the schedule, show the amount of gross profit ( or loss) before selling, general,and administrative expenses for the year ended 31 December 2020, which would be reported if the following method are used:

(I) the cost-recovery method.

(II) The percentage-of-completion method ( based on estimated costs)

3) Determine the construction in process balance that would appear in the statement of financial position of the company as at 31/12/2020 for the project AA, assuming that the precentage-of-completion method is used. show all the working.

For this problem, use an annual interest rate of 4%.

On 1/1/2020, you buy a perpetuity paying you $10,000 at the beginning of each year, commencing on 1/1/2020.  (Recall that a perpetuity is an annuity that does not end.)

(a)        Calculate the present value of the perpetuity as of 1/1/2020.

(b)       After receiving exactly ten payments, you exchange the perpetuity on 1/1/2030 for an annuity paying $x at the beginning of each year for 20 years, commencing on 1/1/2030.  (Note:  Since you have received exactly ten payments, you exchange your perpetuity on 1/1/2030 before receiving the payment of $10,000 on that day.)

What is the present value of your perpetuity on 1/1/2030 when you exchange it?

(c)        Without any calculations, conclude whether $x is greater than, equal to, or less than $10,000.  Explain.

(Note:  A correct answer without a correct explanation earns no credit.)

(d)       Calculate $x.

Company A has a market value of equity of $2,000 million and 80 million shares outstanding. Company B has a market value of equity of $400 million and 25 million shares outstanding. Company A announces at the beginning of 2019 that is going to acquire Company B.

The projected pre-tax gains in operating income (in millions of $) from the merger are:

The projected pre-tax gains in operating income are expected to grow at 4% after year 2023. The company is using a discount rate of 8% to value the synergies. The marginal corporate tax rate is 35%.

Company A has decided to pay a $300 million premium for Company B. Assume that capital markets are efficient and that there is a 100% probability the deal will be closed.

By how much the price per share of Company A would change at the time of the announcement of the acquisition?

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset cost $210,000 and is depreciated for income tax purposes in the following amounts

: 2018 $ 69,300

2019 92,400

2020 31,500

2021 16,800

The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows. 2018 2019 2020 2021 Accounting income before taxes and depreciation $ 115,000 $ 135,000 $ 125,000 $ 125,000 Assume the average and marginal income tax rate for 2018 and 2019 was 30%; however, during 2019 tax legislation was passed to raise the tax rate to 40% beginning in 2020. The 40% rate remained in effect through the years 2020 and 2021. Both the accounting and income tax periods end December 31. Required: Prepare the journal entries to record income taxes for the years 2018 through 2021

1.Record 2018 income taxes.

2Record 2019

3.record 2020

4.record 2021

Note: Enter debits before credits.