Cost of Materials Issuances Under the FIFO Method

An incomplete subsidiary ledger of materials inventory for May is as follows:

a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO.

b. Determine the materials inventory balance at the end of May.
$

c. Journalize the summary entry to transfer materials to work in process. If an amount box does not require an entry, leave it blank.

d. Comparing   as reported in the materials ledger with predetermined order points would enable management to order materials before a(n)   causes idle time.

Below is the listing of a bond issued by Ford Motor Company (F). Below the detail of the bond is the information on a recent sale of part of the bond issue.

1. Explain what the price of $110.529 on a $100 par value bond means in this purchase.

2. Explain how the yield to maturity of 5.267% is calculated.

3. Contrast that with the calculation of the current yield of 5.994%.

4. Explain why it matters to know if the bond pays interest monthly, semi-annually or annually.

5. This bond does not mature for almost 10 years. Explain the concept of interest rate risk in context with this bond for both the issuer and the investor.

Rating - Baa/BBB, Moody’s

Issuer – CUSIP – Ford Motor Company (F)

Coupon – 6.625%

Maturity – 10/01/2028

Price - $110.529

Yield to Maturity – 5.267%

Current Yield – 5.994%

Dated – 04/01/1999

Minimum Size – 5K

Coupon Paid – Semi-Annual

Callable - No

Exercise 9-10 Incorrect answer. Your answer is incorrect. Try again. During 2017, Oriole Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Oriole for a lump sum of $60,700 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below. Type No. of Chairs Estimated Selling Price Each Lounge chairs 400 $90 Armchairs 200 80 Straight chairs 700 50 During 2017, Oriole sells 200 lounge chairs, 100 armchairs, and 120 straight chairs. What is the amount of gross profit realized during 2017? What is the amount of inventory of unsold straight chairs on December 31, 2017? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

Below is the listing of a bond issued by Ford Motor Company (F). Below the detail of the bond is the information on a recent sale of part of the bond issue.

1. Explain what the price of $110.529 on a $100 par value bond means in this purchase.

2. Explain how the yield to maturity of 5.267% is calculated.

3. Contrast that with the calculation of the current yield of 5.994%.

4. Explain why it matters to know if the bond pays interest monthly, semi-annually or annually.

5. This bond does not mature for almost 10 years. Explain the concept of interest rate risk in context with this bond for both the issuer and the investor.

Rating Issuer – CUSIP Coupon                 Maturity Price                       Yield to Maturity

Baa/BBB              Ford Motor                           6.625%                  10/01/2028           $110.529                      5.267%         

Moody’s                Company (F)

Current Yield Dated                     Minimum Size     Coupon Paid Callable

    5.994%                         04/01/1999                    5K                     Semi-Annual        No

(a)
Martin Company incurred the following costs for 70,000 units of produced and sold:
Variable costs $420,000
Fixed costs 392,000

Martin has received a special order from a foreign company for 3,000 units. There is sufficient capacity (at the current fixed costs of $392,000) to fill the order without jeopardizing regular sales of 70,000 units. Filling the order will require spending an additional $6,300 for shipping.

If Martin wants to break even on the special order from the foreign company, what should the unit sales price be?

(b)
If Martin wants to earn $6,000 on the order, what should the unit price be? Explain how you arrive at the answer?

(c)
If Martin Company anticipates that regular sales will be affected by the acceptance of a special order. Should the company accept or reject the special order and explain with reference to each option? The number of words should not exceed 100 words and include a word count.

3. The (inverse) equations for the supply and demand for French Champagne are given below. Supply: P = 40 + ¼Q Demand: P = 100 – ½Q [Half point for each question]

a) compute the equilibrium price and quantity of Champagne.

b) Suppose and excise tax (i.e. a tax paid by producers) of $18 per bottle is imposed. What are the equations for the new supply and demand curves? What is the new EQ price and quantity? Specify what the prices paid by consumers and received by producers are?

c) Do the same as (b) for a sales tax (i.e. a tax paid by consumers) of $18 per bottle and explain whether the burden has shifted from producers to consumers along with the incidence of the tax from excise to sales.

d) Calculate the Consumer Surplus and Producer Surplus before and after the tax is put into place. How much revenue is raised? Calculate any deadweight loss from the tax.

Carl enjoys Coffee (q1) and smoothie (q2) and the utility function is: U=q1^2 + q2^2 Suppose that Carl has $100 spend on coffee and smoothies and the price of a pitcher of smoothie is $10 and the price of a coffee jar is $4.

e) Derive Carl’s optimal bundle. Draw the graph of the budget constraint and show the optimal bundle on the graph. Draw a free hand indifference curve. It is not necessary to use the given utility function to draw the exact indifference curve.

f) On the same graph draw a new budget line to show the effect of a gift of three jars of coffee. Show another optimal bundle on the new budget line. Again use a free hand drawn indifference curve.

g) Compare the two optimal bundles. Is Carl better off with the gift? Explain why or why not.

h) Based on the graph you have drawn, explain if the gift has the same effect as a compensation.

In 2020 Our Company had Net Income of $550,000. On 1/1/20, there were 100,000 shares of common stock outstanding. On 4/1/20, we issued 36,000 shares of common stock. On 6/1/20, we issued 24,000 shares of $100 par value, 6% cumulative preferred stock. This preferred stock is convertible into 48,000 shares of common stock. On 9/1/20, we issued $6,000,000 of 4% bonds at par. These bonds are convertible into 48,000 shares of common stock. The marginal tax rate is 25%. In addition, there are 90,000 options outstanding at 12/31/20. Each option entitles the holder to exchange it for 1 share of common stock at an exercise price of $20 per share. The average market price for common stock for 2020 was $50.

required

how much is the basic earnings per share?

how much is diluted earnings per share ?

The following information relates to ABC Ltd., for the year ended 31^st December, 2019.

            Sales……………………………………………………………….. Rs.2,000,000.

            EBID ………………………………………………………………. 40% of sales.

            Ordinary Shares capital of par value Rs.10/each……………… Rs.800,000.

            8% Preference shares Capital of par value Rs.100/ each………. Rs.500,000.

            10% Bonds payable of par value Rs.1000/each…………………. Rs.400,000.

            Reserves and surplus………………………………………………Rs.250,000.

            Current liabilities…………………………………………………..Rs.250,000.

Tax rate is 30%.

            Market price of share is Rs.20 each.

            Dividend payout ratio is 60%.

Required; Compute and comments on each of the following ratios

a)Earning per share.                         b)         Dividend per share.

c)Price earning ration.                      d)         Earning yield ratio.

e)Dividend yield ratio.                       f)         Return on assets.

g)Return on Equity.                          h)         Capital/Assets turn over.

i) Equity multiplier.                           J)         Debt ratio