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The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.25 million in long-term debt, $730,000 in the common stock account, and $5.9 million in the additional paid-in surplus account. The 2018 balance sheet showed $4.2 million, $965,000, and $8.5 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $240,000. The company paid out $570,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $770,000, and the firm reduced its net working capital investment by $205,000, what was the firm's 2018 operating cash flow, or OCF? |
In: Finance
| Use this balance sheet to do horizontal analysis of the Howard Company. | ||||||||
| 2019 | 2018 | amount | percent | |||||
| Assets | ||||||||
| Current Assets | $13,000 | $10,000 | ||||||
| Plant Assets | $44,000 | $50,000 | ||||||
| Total Assets | $57,000 | $60,000 | ||||||
| Liabilities | $11,000 | $20,000 | ||||||
| Stockholders' Equity | $46,000 | $40,000 | ||||||
| Total Liabilities and Equity | $57,000 | $60,000 | ||||||
Financially, do you think this company is stronger in 2018 or 2019?
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2018 because there are more assets |
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2018 because there are fewer liabilities and more current assets to pay the bills. |
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2018 because the total liabilities and equity went up. |
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2019 because there are fewer liabilities and more current assets to pay those bills |
In: Accounting
Habiby, Inc., began operations in 2018 and has the following income and expenses for 2018 through 2021.
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a. What is the amount of tax that Habiby should pay each year? If an amount is zero, enter "0".
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b. How much would Habiby have paid in tax if the old NOL rules were in place but the corporate tax rate was 21 percent?. If an amount is zero, enter "0".
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In: Accounting
The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.85 million in long-term debt, $750,000 in the common stock account, and $6.05 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.6 million, $945,000, and $8.5 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $230,000. The company paid out $590,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $750,000, and the firm reduced its net working capital investment by $175,000, what was the firm's 2018 operating cash flow, or OCF?
In: Finance
Part B
During 2018, the Nicklaus Corporation participated in three
treasury stock transactions:
On June 30, 2018, the corporation reacquires 160,000 shares for the treasury at a price of $12 per share.
On July 31, 2018, 30,000 treasury shares are reissued at $15 per share.
On September 30, 2018, 30,000 treasury shares are reissued at $10 per share.
Required:
1. Prepare journal entries to record these
transactions.
2. Prepare the Nicklaus Corporation shareholders'
equity section as it would appear in a balance sheet prepared at
September 30, 2018. (Assume net income for the second and third
quarter was $2,800,000.)
In: Accounting
Thornton Industries began construction of a warehouse on July 1,
2018. The project was completed on March 31, 2019. No new loans
were required to fund construction. Thornton does have the
following two interest-bearing liabilities that were outstanding
throughout the construction period:
| $2,000,000, 7% note | |||
| $8,000,000, 3% bonds | |||
Construction expenditures incurred were as follows:
| July 1, 2018 | $ | 340,000 | |
| September 30, 2018 | 690,000 | ||
| November 30, 2018 | 690,000 | ||
| January 30, 2019 | 630,000 | ||
The company’s fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2018 and 2019.
In: Accounting
Thornton Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31, 2019. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
| $2,000,000, 7% note | |||
| $8,000,000, 3% bonds | |||
Construction expenditures incurred were as follows:
| July 1, 2018 | $ | 340,000 | |
| September 30, 2018 | 690,000 | ||
| November 30, 2018 | 690,000 | ||
| January 30, 2019 | 630,000 | ||
The company’s fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2018 and 2019.
In: Accounting
Jack & Mary Jones are married in December 30, 2018, they have no children or dependents. Their divorce became final on December 31, 2018. Of the Income earned, Jack’s total income is $500,000 but his taxable income is $425,000.
What is Jack’s Filing Status for 2018?
What is their Marginal Tax Rate for 2018?
What is his Tax Liability for 2018?
What is his Average Tax Rate
What is his effective Tax Rate of taxable income?
If Jack discover he has an additional tax deduction of $40,000 what is his new Marginal Tax Rate?
What is his Tax Savings at the New Rate?
In: Accounting
In: Accounting
The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.6 million in long-term debt, $740,000 in the common stock account, and $5.95 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.8 million, $965,000, and $8.05 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $200,000. The company paid out $570,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $670,000, and the firm reduced its net working capital investment by $155,000, what was the firm's 2018 operating cash flow, or OCF?
In: Finance