Presented here are the comparative balance sheets of Hames Inc. at December 31, 2020 and 2019. Sales for the year ended December 31, 2020, totaled $590,000.
|
Assets |
2020 |
2019 |
|
Cash |
$21,000 |
$19,000 |
|
Accounts receivable |
78,000 |
72,000 |
|
Merchandise inventory |
103,000 |
99,000 |
|
Total current assets |
$202,000 |
$190,000 |
|
Land |
50,000 |
40,000 |
|
Plant and equipment |
125,000 |
110,000 |
|
Less: Accumulated depreciation |
(65,000) |
(60,000) |
|
Total assets |
$312,000 |
$280,000 |
|
Liabilities |
||
|
Short-term debt |
$18,000 |
$17,000 |
|
Accounts payable |
$64,800 |
$75,000 |
|
Other accrued liabilities |
$20,000 |
$18,000 |
|
Total current liabilities |
$102,800 |
$110,000 |
|
Long-term debt |
$22,000 |
$30,000 |
|
Total liabilities |
$124,800 |
$140,000 |
|
Stockholders’ Equity |
||
|
Common stock, no par, 100,000 shares authorized |
$74,000 |
$59,000 |
|
Retained earnings: |
||
|
Beginning balance |
$81,000 |
$85,000 |
|
Net income for the year |
$52,200 |
$1,000 |
|
Dividends for the year |
(20,000) |
(5,000) |
|
Ending balance |
$113,200 |
$81,000 |
|
Total stockholders’ equity |
$187,200 |
$140,000 |
|
Total liabilities and stockholders’ equity |
$312,000 |
$280,000 |
e
In: Accounting
You borrow money on a self liquidating installemnt loan (equal payments at the end of each year, each payment is part principal part interest) Loan $708,000 Interest Rate 16.10% Life (years) 51 Date of Loan January 1, 2020 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. a) What is the annual payment? b) What are the total interest payments? c) After 21 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? d) After 21 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? Redo the problem if the interest rate is 1.00% (for a well designed spreadsheet this should take 30 seconds) e) What is the annual payment? f) What are the total interest payments? g) After 21 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? h) After 21 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
In: Finance
You borrow money on a self liquidating installemnt loan (equal payments at the end of each year, each payment is part principal part interest) Loan $318,000 Interest Rate 13.20% Life (years) 58 Date of Loan January 1, 2020 Annual Payment: 6206.484138 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. a) What is the annual payment? b) What are the total interest payments? c) After 25 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? d) After 25 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? Redo the problem if the interest rate is 2.00% (for a well designed spreadsheet this should take 30 seconds) e) What is the annual payment? f) What are the total interest payments? g) After 25 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? h) After 25 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
In: Finance
You are going to receive $100 after one month, $110 after two months, $121 after three and four months, $133.1 after five months, $146.41 from month seven to month thirty. What is the present value of all these future cash inflows if the discount rate is 3%?
In: Finance
You set up your own business in merchandising sector in Scranton, PA - opening a luxury watch shop on 1/1/2020.
The following is related information about the business:
- Specific sub-sector: Merchandising sector.
- Location: Scranton, PA
- Business model: merchandiser - buying and selling luxury watches.
- Investment by owner: $1,000,000
- You hired a shop manager. In order to handle different aspects of business, you had one employee responsible for the purchasing, receiving, and storing of watches purchased. A second employee is responsible for the maintenance of account receivable records and collection from customers. A third employee has responsibility for personal records, timekeeping, preparation of payrolls, and distribution of payroll checks. As a part of his job, the shop manager would do some internal control functions. In addition, you hired one security officer, and 4 full-time sales assistants.
Requirements:
1/1/2020: Opened the business, invested $1,000,000 cash in the business.
1/1/2020: bought a building for the business purpose for $100,000 cash. The building has a useful economic life of 10 years.
1/1/2020: purchased 100 luxury watches for $200,000 with $100,000 cash payment, the remaining amount payable on 2/1/2021. (each watch costs $2,000)
3/1/2020: purchased 50 luxury watches for $250,000 with cash. Each watch costs $5,000.
4/1/2020: purchased 40 luxury watches for $240,000 with cash. Each costs $6,000.
6/1/2020: Sold 130 watched for $1,300,000. Of which $300,000 cash was received at the time of sale. The remaining amount to be received on 5/2/2021.
7/1/2020: paid $1,200 in advance for 12 months’ property insurance (7/1/20 to 7/1/21).
8/1/2020: borrowed $500,000 from a local Chase bank. Interest rate is 12%/year. Interest is paid every 6 months- the first payment date is 2/1/2021. Principal would be paid on 8/1/2021.
9/1/2020: to expand business, you rent a showroom in the next building. Paid $24,000 cash in advance for 12 month’s rent.
12/31/2020: Paid 2020 utilities expense, advertising expense, and miscellaneous expense for $5000, $15,000, and $4,000, respectively.
Salary is paid on the last day of each month. Each month’s salary expense is $20,000.
Notes:
Requirement: Prepare an excel file that includes
In: Accounting
You set up your own business in merchandising sector in Scranton, PA - opening a luxury watch shop on 1/1/2020.
The following is related information about the business:
- Specific sub-sector: Merchandising sector.
- Location: Scranton, PA
- Business model: merchandiser - buying and selling luxury watches.
- Investment by owner: $1,000,000
- You hired a shop manager. In order to handle different aspects of business, you had one employee responsible for the purchasing, receiving, and storing of watches purchased. A second employee is responsible for the maintenance of account receivable records and collection from customers. A third employee has responsibility for personal records, timekeeping, preparation of payrolls, and distribution of payroll checks. As a part of his job, the shop manager would do some internal control functions. In addition, you hired one security officer, and 4 full-time sales assistants.
Requirements:
1/1/2020: Opened the business, invested $1,000,000 cash in the business.
1/1/2020: bought a building for the business purpose for $100,000 cash. The building has a useful economic life of 10 years.
1/1/2020: purchased 100 luxury watches for $200,000 with $100,000 cash payment, the remaining amount payable on 2/1/2021. (each watch costs $2,000)
3/1/2020: purchased 50 luxury watches for $250,000 with cash. Each watch costs $5,000.
4/1/2020: purchased 40 luxury watches for $240,000 with cash. Each costs $6,000.
6/1/2020: Sold 130 watched for $1,300,000. Of which $300,000 cash was received at the time of sale. The remaining amount to be received on 5/2/2021.
7/1/2020: paid $1,200 in advance for 12 months’ property insurance (7/1/20 to 7/1/21).
8/1/2020: borrowed $500,000 from a local Chase bank. Interest rate is 12%/year. Interest is paid every 6 months- the first payment date is 2/1/2021. Principal would be paid on 8/1/2021.
9/1/2020: to expand business, you rent a showroom in the next building. Paid $24,000 cash in advance for 12 month’s rent.
12/31/2020: Paid 2020 utilities expense, advertising expense, and miscellaneous expense for $5000, $15,000, and $4,000, respectively.
Salary is paid on the last day of each month. Each month’s salary expense is $20,000.
Notes:
Requirement: Prepare an excel file that includes
Tab 2 titled “income statement”: prepare a multiple-step income statement for year ended 12/31/2020.
In: Accounting
Project Monitoring and Control Process Plan:
You have a Project Budget for building a five-bedroom house in
Ashburn, VA. Assume that your building project is two months behind
and has a $100,000.00 cost overrun. This should not be a surprise
to you because of the monitoring processes. Identify and discuss
some of the monitoring processes that could have alerted you of the
schedule and cost problems. What are some of the controlling steps
you would take to bring both the schedule and the cost back on
track? Be sure to justify your answers. . Your Project Monitoring
and Control Process Plan should be at least two pages including a
summarization and conclusion page. If necessary, include data from
the Project Budget and Project Schedule in the table shown below to
support your schedule and cost problems.
| Unit 5 Project: | ||||
| Activity Description | Start Date | End Date | Days to complete | Est $ |
| Architectural Design | 5/1/2018 | 5/15/2018 | 14 | 50,000 |
| Procurement of machinery | 5/15/2018 | 5/30/2018 | 15 | 60,000 |
| Hiring Labor | 5/31/2018 | 6/10/2018 | 10 | 120,000 |
| Work and Environmental Permits | 7/27/2018 | 8/6/2018 | 10 | 25,000 |
| Site Security | 8/18/2018 | 4/30/2020 | 731 | 20,000 |
| Concrete | 8/18/2018 | 8/31/2018 | 15 | 80,000 |
| Lumber Procurement | 9/1/2018 | 9/11/2018 | 10 | 80,000 |
| Material Storage | 9/1/2018 | 4/30/2020 | 637 | 10,000 |
| Scaffolding Erection | 9/12/2018 | 9/17/2018 | 5 | 25,000 |
| Framing | 9/15/2018 | 1/13/2019 | 120 | 130,000 |
| Roofing | 1/14/2019 | 2/13/2019 | 30 | 40,000 |
| Plumbing | 2/14/2019 | 3/17/2019 | 30 | 30,000 |
| Electrical | 3/18/2019 | 4/17/2019 | 30 | 30,000 |
| HVAC | 4/18/2019 | 6/2/2019 | 45 | 40,000 |
| Windows and Doors | 6/3/2019 | 8/2/2019 | 60 | 20,000 |
| Drywall | 8/3/2019 | 9/12/2019 | 40 | 45,000 |
| Interior Design | 9/13/2019 | 10/23/2019 | 40 | 15,000 |
| Paint and Wood Finishing | 10/24/2019 | 12/23/2019 | 60 | 40,000 |
| Cabinetry | 12/24/2019 | 1/8/2020 | 15 | 40,000 |
| Plumbing Fixtures | 12/24/2019 | 1/8/2020 | 15 | 20,000 |
| Lighting Fixtures | 12/24/2019 | 1/8/2020 | 15 | 20,000 |
| Flooring | 1/9/2020 | 1/30/2020 | 21 | 30,000 |
| Interior Decorator and Decorations | 1/31/2020 | 2/20/2020 | 20 | 20,000 |
| Exterior Rock | 2/21/2020 | 3/22/2020 | 30 | 50,000 |
| Landscaping | 3/23/2020 | 4/15/2020 | 23 | 30,000 |
| Cost of Construction | 1,040,000 | |||
| Contingency (2%) | 4/16/2020 | 4/30/2020 | 14 | 19,800 |
| Total | 1,059,800 | |||
In: Operations Management
Diva Limited is the parent company of a group of global subsidiaries that specializes in the design, production anddistribution of apparel and accessories for extreme sports. The extreme sports industry is defined by youth culture, youthsaged 12 to 24, and is forecasted to grow at a rate of 15% to 18% annually. The industry is made up of several dozens ofgiant global brands and is intensely competitive.
In the company’s quest for product innovation and design to pursue its differentiation strategy, Diva Limited incurredsubstantial research and development costs in the past few years, which amount to $90 million, $105 million, $120 million,and $135 million for the years ended 2012, 2013, 2014, and 2015 respectively. The research and development costs wereexpensed off in the company’s income statement in the years they were incurred.
Required
As part of the accounting analysis process, you decide that Diva’s accounting treatment to expense its research anddevelopment costs does not meaningfully reflect the company’s underlying business economics. You estimate that 40% ofDiva’s research and development costs in each year should be capitalized and amortized on a straight-line basis, from thebeginning of the following year over a three-year period. Compute the effect of capitalizing the research and development costson Diva’s income statements and balance sheets for the financial years 2014 and 2015. Ignore any potential tax effects.Answer the following questions.
In: Accounting
Following hurricane Katrina, many people were housed in trailers provided by the Federal Emergency Management Agency (FEMA). A potential health concern for individuals living in the trailers is exposure to formaldehyde (due to its use in adhesives). From Sept. 19 to Oct. 7, 2006, air samples were collected from 96 new, unused travel trailers from, at a staging area in Baton Rouge, LA. Only previously unoccupied trailers were tested in order to eliminate any effects from human activities that might cause formaldehyde levels to rise. The units tested had been closed for approximately six weeks before the sampling. The air sampling data was analyzed for FEMA by the Department of Health and Human Services' Agency for Toxic Substances and Disease Registry (ATSDR) in Atlanta, GA. The baseline concentration of formaldehyde in the units averaged 1.2 ppmv (parts per million by volume) at the beginning of the test. What was the average formaldehyde concentration within the trailers, expressed in units of g/m3? Assume that the temperature inside the units was 25oC and P = 1 atm. Molecular weight of formaldehyde is 30 g/mole.
In: Chemistry
6. Answer the following questions based on the following quotation. On October 1, 2007, S&P 500 closed at 1547 where the quotation of CALL options on S&P 500 was as follows. Those contracts expire in October 2007.
| Strike Price | Open | High | Low | Last | Sett |
| 1540 | -- | -- | -- | -- | 31.70 |
| 1600 | 1.70 | 3.60 | 1.70 | 3.00 | 3.35 |
(a) Which option is in the money?
(b) Decompose the value of 1540 call, $31.7, into intrinsic value and time value.
(c) Again using the call with exercise price of 1540, what would be your cash proceeds if you exercise the option on October 1 (index options are settled by cash)? Assume that both dividends and transaction costs are small enough to be ignored. Based on this answer and answer on (b), does it make sense to exercise an American call before expiration? Explain.
(d) Assume that put-call parity holds for these options (it does not exactly hold since the above options are all American). What should be the value of a PUT on S&P 500 with exercise price of 1600? Assume that the annual risk-free rate is 5%.
In: Finance