| Yearly Returns | Microsoft | Apple | Market | |||
| Jan 2010 - Dec 2010 | Year. 1 | -0.34% | 5.18% | 14.93% | ||
| Jan 2011 - Dec 2011 | Year. 2 | -0.37% | 7.93% | 2.06% | ||
| Jan 2012 - Dec 2012 | Year. 3 | 0.40% | 5.15% | 15.84% | ||
| Jan 2013 - Dec 2013 | Year 4 | 2.81% | 5.99% | 32.21% | ||
| Jan 2014 - Dec 2014 | Year. 5 | 1.91% | 4.62% | 13.53% | ||
| Jan 2015 - Dec 2015 | Year. 6 | 1.75% | 3.32% | 1.34% | ||
| Jan 2016 - Dec 2016 | Year. 7 | 1.37% | 3.94% | 11.80% | ||
| Jan 2017 - Dec 2017 | Year. 8 | 2.72% | 2.84% | 21.69% | ||
| Jan 2018 - Dec 2018 | Year. 9 | 1.41% | 2.13% | -4.45% | ||
| Jan 2019 - Dec 2019 | Year. 10 | 4.06% | 5.58% | 31.29% | ||
| Average Return | 1.57% | 4.67% | 14.02% | |||
| Std Deviation | 1.42% | 1.69% | 12.21% | |||
| Correlation with the market | 0.61 | 0.29 | 1.00 | |||
| Beta | 0.07 | 0.04 | 1.00 | |||
In: Finance
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:
| Current Year | Previous Year | |||
| Accounts payable | $510,000 | $130,000 | ||
| Current maturities of serial bonds payable | 320,000 | 320,000 | ||
| Serial bonds payable, 10% | 1,270,000 | 1,590,000 | ||
| Common stock, $1 par value | 60,000 | 80,000 | ||
| Paid-in capital in excess of par | 660,000 | 660,000 | ||
| Retained earnings | 2,280,000 | 1,810,000 | ||
The income before income tax was $588,300 and $514,800 for the current and previous years, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.
| Current year | |
| Previous year |
b. Determine the times interest earned ratio for both years. Round to one decimal place.
| Current year | |
| Previous year |
c. The ratio of liabilities to stockholders' equity has (improved or deteriorated) and the times interest earned ratio has (improved or deteriorated) from the previous year. These results are the combined result of a (larger or smaller) income before income taxes and (larger or lower) interest expense in the current year compared to the previous year.
In: Accounting
Rebecca is 29 and considering going to graduate school so she
sits down to calculate whether it is worth the large sum of money.
She knows that her first year tuition will be $54,000, due at the
beginning of the year (that is, right away). She estimates that the
2nd year of tuition would be $56,000. She also estimates that her
living expenses above and beyond tuition will be $10,000 per year
(assume this extra expense occurs at the end of each year only when
she is in graduate school) for the first year and will increase to
$11,000 the next year. She expects to earn $24,000 for an
internship (Assume this inflow occurs one year from now). Were she
to forgo graduate school she would be able to make $65,000 at the
end of this year and expects that to grow 4% annually. With a
graduate degree, she estimates that she will earn $116,000 per year
after graduation, again with annual 4% increases. Either way, she
plans to work until 64. The interest/discount rate is 5%. What is
the NPV of her graduate education?
A2745138.44
B 895157.84
C900268.95
D898497.46
In: Finance
On November 1, Year 6, Bob the Builder purchases a cookie after having a dream in which a stranger gave him a giant fortune cookie. A week later, he finds out that he won $100,000. On December 1, Year 6, he cashes in his lottery ticket and forms a corporation called Fortune Cookie Inc. (FCI) with his lottery money. When FCI is formed, there is no other assets or liabilities. From the formation of FCI to the end of Year 11, the following transaction is the only transaction that has happened:
FCI issues an installment note on February 1, Year 7 (with a required yield of 6%) in exchange for the land that it purchases from Mr. Mac. Mr. Mac’s real estate agent had listed the land on the market for Box3A: 240,000 . The note calls for four equal blended payments of
Box3B: 60,000 that are to be made at February 1, Year 8, Year 9, Year 10, and Year 11. Note that FCI’s fiscal year end is December 31.
What is the amount of total current liabilities that should be reported on December 31, Year 8 Statement of Financial Position?
In: Accounting
Problem 7-18 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2]
Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 29 |
| Direct labor | $ | 21 |
| Variable manufacturing overhead | $ | 5 |
| Variable selling and administrative | $ | 1 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 330,000 |
| Fixed selling and administrative expenses | $ | 150,000 |
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company’s product is $64 per unit.
Required:
2. Assume the company uses variable costing:
b. Prepare an income statement for Year 1, Year 2, and Year 3.
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses variable costing.
In: Accounting
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:
| Current Year | Previous Year | |||
| Accounts payable | $744,000 | $198,000 | ||
| Current maturities of serial bonds payable | 460,000 | 460,000 | ||
| Serial bonds payable, 10% | 1,890,000 | 2,350,000 | ||
| Common stock, $1 par value | 90,000 | 110,000 | ||
| Paid-in capital in excess of par | 970,000 | 980,000 | ||
| Retained earnings | 3,360,000 | 2,670,000 | ||
The income before income tax was $564,000 and $493,500 for the current and previous years, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.
| Current year | |
| Previous year |
b. Determine the times interest earned ratio for both years. Round to one decimal place.
| Current year | |
| Previous year |
c. The ratio of liabilities to stockholders' equity has and the times interest earned ratio has from the previous year. These results are the combined result of a income before income taxes and interest expense in the current year compared to the previous year.
In: Accounting
A Belgium subsidiary's beginning and ending trial balances appear below:
|
Dr (Cr) |
|
January 1 |
December 31 |
|
|
Cash, receivables |
€ 1,500 |
€ 1,200 |
|
Inventories |
3,000 |
3,500 |
|
Plant & equipment, net |
30,000 |
39,000 |
|
Liabilities |
(18,500) |
(27,200) |
|
Capital stock |
(4,000) |
(4,000) |
|
Retained earnings, beginning |
(12,000) |
(12,000) |
|
Sales revenue |
-- |
(15,000) |
|
Cost of sales |
9,500 |
|
|
Out-of-pocket selling & administrative expenses |
-- |
4,000 |
|
Depreciation expense |
-- |
1,000 |
|
Total |
€ 0 |
€ 0 |
Exchange rates ($/€) are:
|
Beginning of year |
$1.25 |
|
Average for year |
1.22 |
|
End of year |
1.20 |
The subsidiary was acquired at the beginning of the year. Its
sales, inventory purchases, and out-of-pocket selling and
administrative expenses occurred evenly during the year. Equipment
was purchased for €10,000 when the exchange rate was $1.23.
Depreciation for the year includes €200 related to the equipment
purchased during the year. The ending inventory was purchased at
the end of the year, and the beginning inventory was purchased at
the end of the previous year.
If the subsidiary's functional currency is the U.S. dollar,
what is the remeasurement gain or loss for the year?
Select one:
A. $ 810 loss
B. $2,020 loss
C. $1,130 gain
D. $1,030 gain
In: Accounting
Rosie Dry Cleaning was started on January 1, Year 1. It
experienced the following events during its first two years of
operation:
Events Affecting Year 1
Provided $25,990 of cleaning services on account.
Collected $20,792 cash from accounts receivable.
Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.
Events Affecting Year 2
Wrote off a $195 account receivable that was determined to be uncollectible.
Provided $30,330 of cleaning services on account.
Collected $26,842 cash from accounts receivable.
Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.
Required
a. Record the events for Year 1 and Year 2 in
T-accounts.
b. Determine the following amounts:
(1) Net income for Year 1.
(2) Net cash flow from operating activities for Year 1.
(3) Balance of accounts receivable at the end of Year 1.
(4) Net realizable value of accounts receivable
at the end of Year 1.
c. Repeat Requirements b for the Year 2 accounting period.
In: Accounting
Inner Secret T Shirt Company produces and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 29 Direct labor $ 14 Variable manufacturing overhead $ 4 Variable selling and administrative $ 1 Fixed costs per year:
Fixed manufacturing overhead $ 570,000
Fixed selling and administrative expenses $ 170,000
During its first year of operations, O’Brien produced 92,000 units and sold 75,000 units.
During its second year of operations, it produced 84,000 units and sold 96,000 units.
In its third year, O’Brien produced 89,000 units and sold 84,000 units.
The selling price of the company’s product is $79 per unit.
4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, and Year 3.
b. Prepare an income statement for Year 1, Year 2, and Year 3.
In: Accounting
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:
| Current Year | Previous Year | |||
| Accounts payable | $260,000 | $224,000 | ||
| Current maturities of serial bonds payable | 340,000 | 340,000 | ||
| Serial bonds payable, 10% | 1,680,000 | 2,020,000 | ||
| Common stock, $1 par value | 70,000 | 100,000 | ||
| Paid-in capital in excess of par | 840,000 | 840,000 | ||
| Retained earnings | 2,890,000 | 2,290,000 | ||
The income before income tax was $666,600 and $583,300 for the current and previous years, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.
| Current year | |
| Previous year |
b. Determine the times interest earned ratio for both years. Round to one decimal place.
| Current year | |
| Previous year |
c. The ratio of liabilities to stockholders' equity has and the times interest earned ratio has from the previous year. These results are the combined result of a income before income taxes and interest expense in the current year compared to the previous year.
In: Accounting