Garlington Technologies Inc.'s 2018 financial statements are shown below: Balance Sheet as of December 31, 2018 Cash $ 180,000 Accounts payable $ 360,000 Receivables 360,000 Notes payable 156,000 Inventories 720,000 Line of credit 0 Total current assets $1,260,000 Accruals 180,000 Fixed assets 1,440,000 Total current liabilities $ 696,000 Common stock 1,800,000 Retained earnings 204,000 Total assets $2,700,000 Total liabilities and equity $2,700,000 Income Statement for December 31, 2018 Sales $3,600,000 Operating costs 3,279,720 EBIT $ 320,280 Interest 18,280 Pre-tax earnings $ 302,000 Taxes (40%) 120,800 Net income 181,200 Dividends $ 108,000 Suppose that in 2019 sales increase by 20% over 2018 sales and that 2019 dividends will increase to $174,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2018. Use an interest rate of 8%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new-debt will be in the form of a line of credit. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar.
| Garlington Technologies Inc. Pro Forma Income Statement December 31, 2019 |
|||
| Sales | $ | ||
| Operating costs | $ | ||
| EBIT | $ | ||
| Interest | $ | ||
| Pre-tax earnings | $ | ||
| Taxes (40%) | $ | ||
| Net income | $ | ||
| Dividends: | $ | ||
| Addition to RE: | |||
In: Finance
Garlington Technologies Inc.'s 2018 financial statements are shown below:
Balance Sheet as of December 31, 2018
| Cash | $ 180,000 | Accounts payable | $ 360,000 | |
| Receivables | 360,000 | Notes payable | 156,000 | |
| Inventories | 720,000 | Line of credit | 0 | |
| Total current assets | $1,260,000 | Accruals | 180,000 | |
| Fixed assets | 1,440,000 | Total current liabilities | $ 696,000 | |
| Common stock | 1,800,000 | |||
| Retained earnings | 204,000 | |||
| Total assets | $2,700,000 | Total liabilities and equity | $2,700,000 |
Income Statement for December 31, 2018
| Sales | $3,600,000 |
| Operating costs | 3,279,720 |
| EBIT | $ 320,280 |
| Interest | 18,280 |
| Pre-tax earnings | $ 302,000 |
| Taxes (40%) | 120,800 |
| Net income | 181,200 |
| Dividends | $ 108,000 |
Suppose that in 2019 sales increase by 20% over 2018 sales and that 2019 dividends will increase to $174,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2018. Use an interest rate of 8%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new-debt will be in the form of a line of credit. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar.
| Garlington Technologies Inc. Pro Forma Income Statement December 31, 2019 |
|||
| Sales | $ | ||
| Operating costs | $ | ||
| EBIT | $ | ||
| Interest | $ | ||
| Pre-tax earnings | $ | ||
| Taxes (40%) | $ | ||
| Net income | $ | ||
| Dividends: | $ | ||
| Addition to RE: | $ | ||
| Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2019 |
|||
| Cash | $ | ||
| Receivables | $ | ||
| Inventories | $ | ||
| Total current assets | $ | ||
| Fixed assets | $ | ||
| Total assets | $ | ||
| Accounts payable | $ | ||
| Notes payable | $ | ||
| Accruals | $ | ||
| Total current liabilities | $ | ||
| Common stock | $ | ||
| Retained earnings | $ | ||
| Total liabilities and equity | $ | ||
In: Finance
The following information is computed from Katy Inc.'s annual report for 2018.
|
2018 |
2017 |
|
|
Current assets |
$ 2,731,020 |
$ 2,364,916 |
|
Property and equipment, net |
10,960,286 |
8,516,833 |
|
Intangible assets, at cost less applicable |
||
|
amortization |
294,775 |
255,919 |
|
$13,986,081 |
$11,137,668 |
|
|
Current liabilities |
$ 3,168,123 |
$ 2,210,735 |
|
Deferred federal income taxes |
160,000 |
26,000 |
|
Mortgage note payable |
456,000 |
- |
|
Stockholders' equity |
10,201,958 |
8,900,933 |
|
$13,986,081 |
$11,137,668 |
|
|
Net sales |
$33,410,599 |
$25,804,285 |
|
Cost of goods sold |
(30,168,715) |
(23,159,745) |
|
Selling and administrative expense |
(2,000,000) |
(1,500,000) |
|
Interest expense |
(216,936) |
(39,456) |
|
Income tax expense |
(400,000 ) |
(300,000 ) |
|
Net income |
$ 624,948 |
$ 805,084 |
Note: One-third of the operating lease rental charge was $100,000
in 2018 and $50,000 in 2017. Capitalized interest totaled $30,000
in 2018 and $20,000 in 2017.
Required:
|
a. |
Based on the above data for both years, compute: |
|
|
1. |
times interest earned |
|
|
2. |
debt ratio |
|
|
3. |
debt/equity ratio |
|
|
b. |
Comment on the firm's long-term borrowing ability based on the analysis. |
|
In: Accounting
Garlington Technologies Inc.’s 2018 financial statements are shown here: Balance Sheet as of December 31, 2018 Cash $ 180,000 Accounts payable $ 360,000 Receivables 360,000 Notes payable 156,000 Inventories 720,000 Line of credit 0 Total current assets $1,260,000 Accruals 180,000 Fixed assets 1,440,000 Total current liabilities $ 696,000 Common stock 1,800,000 Retained earnings 204,000 Total assets $2,700,000 Total liabilities and equity $2,700,000 Income Statement for December 31, 2018 Sales $3,600,000 Operating costs 3,279,720 EBIT $ 320,280 Interest 18,280 Pre-tax earnings $ 302,000 Taxes (40%) 120,800 Net income $ 181,200 Dividends $ 108,000
Suppose that in 2019 sales increase by 10% over 2018 sales and that 2019 dividends will increase to $112,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2018. Use an interest rate of 13%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all-new debt will be in the form of a line of credit.
In: Finance
| KORBIN COMPANY | |||||||||
| Comparative Income Statements | |||||||||
| For Years Ended December 31, 2019, 2018, and 2017 | |||||||||
| 2019 | 2018 | 2017 | |||||||
| Sales | $ | 378,269 | $ | 289,785 | $ | 201,100 | |||
| Cost of goods sold | 227,718 | 181,116 | 128,704 | ||||||
| Gross profit | 150,551 | 108,669 | 72,396 | ||||||
| Selling expenses | 53,714 | 39,990 | 26,545 | ||||||
| Administrative expenses | 34,044 | 25,501 | 16,691 | ||||||
| Total expenses | 87,758 | 65,491 | 43,236 | ||||||
| Income before taxes | 62,793 | 43,178 | 29,160 | ||||||
| Income tax expense | 11,679 | 8,852 | 5,919 | ||||||
| Net income | $ | 51,114 | $ | 34,326 | $ | 23,241 | |||
| KORBIN COMPANY | |||||||||
| Comparative Balance Sheets | |||||||||
| December 31, 2019, 2018, and 2017 | |||||||||
| 2019 | 2018 | 2017 | |||||||
| Assets | |||||||||
| Current assets | $ | 59,115 | $ | 39,566 | $ | 52,890 | |||
| Long-term investments | 0 | 1,100 | 4,780 | ||||||
| Plant assets, net | 111,492 | 101,056 | 59,747 | ||||||
| Total assets | $ | 170,607 | $ | 141,722 | $ | 117,417 | |||
| Liabilities and Equity | |||||||||
| Current liabilities | $ | 24,909 | $ | 21,117 | $ | 20,548 | |||
| Common stock | 66,000 | 66,000 | 48,000 | ||||||
| Other paid-in capital | 8,250 | 8,250 | 5,333 | ||||||
| Retained earnings | 71,448 | 46,355 | 43,536 | ||||||
| Total liabilities and equity | $ | 170,607 | $ | 141,722 | $ | 117,417 | |||
Required:
1. Complete the below table to calculate each
year's current ratio.
In: Accounting
| Comparative Balance Sheet of “Alpha- Beta” | ||||||
| Assets | 2018 | 2017 | Liabilities & Stockholders’ Equity |
2018 | 2017 | |
| Fixed Assets Property, Plant and Equipment Accumulated depreciation Net Property, Plant and Equipment Other Assets Total Fixed Assets Current Assets Cash and Cash Equivalents Accounts receivables Inventory Prepaid Expenses Total Current Assets Total Assets |
3,250,000 (425,000) 2,825,000 725,000 3,550,000 300,000 900,000 1,100,000 100,000 2,400,000 5,950,000 |
2,100,000 (250,000) 1,850,000 550,000 2,400,000 300,000 750,000 800,000 100,000 1,950,000 4,350,000 |
|
1,250,000 997,600 2,247,600 2,200,000 2,200,000 502,400 1,000,000 1,502,400 3,702,400 5,950,000 |
1,250,000 600,000 1,850,000 1,150,000 1,150,000 450,000 900,000 1,350,000 2,500,000 4,350,000 |
| Comparative Income Statement of “Alpha- Beta” | ||
| 2018 | 2017 | |
| Sales Cost of Goods Sold Gross Profit Selling and Administrative Expenses Net Operating Income Interest Expenses Income Before Taxes Tax Net Income |
5,000,000 (3,200,000) 1,800,000 (1,000,000) 800,000 (240,000) 560,000 (162,400) 397,600 |
3,000,000 (1,800,000) 1,200,000 (900,000) 300,000 (110,000) 190,000 (55,100) 134,900 |
Given answer from Cheggs expert for quick ratio: Quick Ratio (QR) = (Cash&Cash Equivalents + Current Receivables+Prepaid Expenses or (CA-Inventory)/CL where CA: Current Assets and CL: liabilities
Given answer from Cheggs expert for Days’ Sales in Inventory = (Ending Inventory * 365) / Cost of Goods Sold
Given answer from Cheggs expert for Operating cycle:
Operating Cycle = Days of Sales Inventory + Days of Sales Outstanding - Days payable outsatanding
My Questions:
1) For quick ratio calculation why weren't 'prepaid expenses' substructed, too?
2) I have the impression that the 'Operating cycle' was asked to be calculated not the 'net operating cycle'. Can you please help since all the formula used in the answer confused me? I did not find any reference for the formula day payable outstanding and the average inventory can be found only for year 2018....
3) Can 'Days' sales in inventory' be calculated by using 'sales' instead of CoGs? (that was our tutor's suggestion)
In: Accounting
Horton v. JPMorgan Chase Bank, N.A. Court of Appeals of Texas, Dallas, 2018 WL 494776 (2018).
Background and Facts: Robbie Horton, a paralegal for the law firm of Stovall & Associates, P.C., opened an individual checking account with JPMorgan Chase Bank (Chase) with a signature card. The terms of the account required Horton to notify Chase, in writing, of any unauthorized item within thirty days of when a statement showing the item was made available. A failure to provide the notice would preclude a claim based on the item. Two months later, Chase received a second signature card purportedly signed by Horton and Kimberly Stovall, an attorney at the firm, to convert the account to a joint account. Less than a year later, Stovall terminated Horton’s employment, and on the same day, Stovall withdrew all of the funds from the joint account. Almost two years after the withdrawal, Horton filed a suit in a Texas state court against Chase, alleging breach of contract. Horton asserted that she had not agreed to the withdrawal by Stovall. Chase filed a motion for summary judgement, which the court granted. Horton appealed.
Decision and Remedy: A state intermediate appellate court affirmed the lower court’s summary judgement in favor of the bank. Chase required thirty days’ written notice of any errors in its monthly account statements. Because Horton did not notify the bank in writing until long after the thirty-day deadline had passed, the summary judgement dismissing her claim was appropriate.
Questions:
a. Legal Environment: Horton claimed that she had not agreed to the conversion of the account or to the withdrawal of the funds. These contentions did not affect the court’s decision. Why not?
b. Economic: Why does the UCC “absolutely” limit the time that a customer has to report an altered check or unauthorized signature?
In: Operations Management
Compare GDP growth of GCC over the past 3 years. I want for (2017-2018-2019 )
B. Compare FDI exposure of GCC countries for past 3 years. I want for (2017-2018-2019 )
please help me with it , I need much information and numbers
In: Economics
Assume that you purchased a share of the Company at the beginning of 2018 for $54.58. One year later the stock was worth $53.53, but during 2018 you received a cash dividend of $2.32
Calculate the following:
1. Income
2. Capital gain (loss)
3. Total return – a. in dollars; b. as a percent
In: Finance
On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,155,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $840,000, retained earnings of $390,000, and a noncontrolling interest fair value of $495,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.Net IncomeDividends DeclaredInventory Purchases from Corgan2017$290,000$49,000$240,0002018270,00059,000260,000Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing's inventory.A.
Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018.B. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018.Investment balance 12/31/18Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In: Accounting