Discount Amortization

On the first day of the fiscal year, a company issues a $1,400,000, 8%, 4-year bond that pays semiannual interest of $56,000 ($1,400,000 × 8% × ½), receiving cash of $1,266,974.

Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

It is January 1 of Year 2. Sales for Harry Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. 80% of sales are credit sales; the remaining 20% of sales are cash sales. Of these credit sales, 10% are collected during the month of sale, 30% in the following month, and 60% in the second following month. TOTAL sales for November and December of Year 1 were $200,000 and $400,000, respectively.

What is the forecasted amount of total CASH COLLECTIONS FROM SALES in January?

The Landers Corporation needs to raise $1.60 million of debt on a 5-year issue. If it places the bonds privately, the interest rate will be 10 percent. Thirty thousand dollars in out-of-pocket costs will be incurred. For a public issue, the interest rate will be 11 percent, and the underwriting spread will be 2 percent. There will be $140,000 in out-of-pocket costs. Assume interest on the debt is paid semiannually, and the debt will be outstanding for the full 5-year period, at which time it will be repaid. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. For each plan, compare the net amount of funds initially available—inflow—to the present value of future payments of interest and principal to determine net present value. Assume the stated discount rate is 16 percent annually. Use 8.00 percent semiannually throughout the analysis. (Disregard taxes.) (Assume the $1.60 million needed includes the underwriting costs. Input your present value of future payments answers as negative values. Do not round intermediate calculations and round your answers to 2 decimal places.) b. Which plan offers the higher net present value? Private placement Public issue

Suppose that you are considering investing in a four-year bond that has a face value of $1000 and a coupon rate of 5.5 %.

a.) If the market interest rate on similar bonds is 5.5 %, the price of the bond is $ (Round your response to the nearest cent.)

The bond's current yield is % (Round your response to two decimal places.)

b.) Suppose that you purchase the bond, and the next day the market interest rate on similar bonds falls to 4 .5 %.

The price of the bond will be $ . (Round your response to the nearest cent.)

c.) Now suppose that one year has gone by since you bought the bond, and you have received the first coupon payment. The market interest rate on similar bonds is still 4.5 %.

The price of the bond another investor will be willing to pay is ? $

The total return on the bond was $

if another investor had bought the bond a year ago for the amount that was calculated in? (b), the total return would have been %

d.) Now suppose that two years have gone by since you bought the bond and that you have received the first two coupon payments. At this? point, the market interest rate on similar bonds unexpectedly rises to

9?%.

The price of the bond another investor will be willing to pay is  $. (Round your response to the nearest? cent.)

The total return on the bond was     %. (Round your response to two decimal? places.)

Suppose that another investor had bought the bond at the price you calculated in? (c).

The total return would have been

     %. (Round your response to two decimal? places.)

Assume that

MawnMawn

Associates began the year with

76,000

outstanding shares and implemented a

10 %

stock dividend on

January

1 of the current year.

MawnMawn

employees held

80,000

options that were granted on

April

1. If​ exercised, there would be

21,600

incremental shares. On

June

​1,

MawnMawn

implemented a​ 3-for-1 stock split.​ Finally, on

August

​1, the company purchased

133,800

shares to be held in the treasury.

Requirement

Compute the denominator for basic and diluted earnings per share. Assume that the stock split also applies to the options.

Complete the table below to compute the denominator for basic and diluted earnings per share​ (EPS). Assume that the stock split also applies to the options. ​(Assume the options are dilutive. Combine the opening balance and the

January

1 stock dividend on the first line of the table. Complete all answer boxes. Enter a​ "0" for any zero balances. Enter a decrease in shares with a minus sign or​ parentheses.)

Last year, the mean dollar spent for online purchases on the AMAZING WEBSITE for the week (7 days) before Labor Day among customers who use their Vista Charge Card was $350. The population standard deviation is not known. Because of increased use of on-line purchasing, Vista’s Vice President of Electronic Marketing believes that purchasing on the AMAZING WEBSITE has changed. He randomly selects 100 customer accounts. The results of the sample found that customers that used Vista charge card spent a mean dollar amount of $295 on purchases with s = $55. (use alpha 1%)

a) State the null and alternative hypothesis in symbols and in words. (3pts)

b) Calculate the expected results for the hypothesis test sampling distribution, assuming the null hypothesis is true. (i.e., name and graph of sampling distribution, mean and standard error) (3pts)

c) Identify the standard distribution that best approximates the sampling distribution. (1pts)

d) Formulate the decision rule(use can use either critical test scores or p-values) (3pts)

e) Determine the statistical results: test statistic, critical test statistic and p-value ( 6pts)

f) Determine the conclusion in terms of the null and alternative hypotheses. Do the sample results indicate that the vice president’s claim is supported at alpha = 1%? (4pts)