After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.:
| Retained Earnings | $3,551,000 |
| Dividends | 41,500 |
| Fees Earned | 1,200,000 |
| Wages Expense | 741,700 |
| Rent Expense | 68,600 |
| Supplies Expense | 14,950 |
| Miscellaneous Expense | 8,750 |
Journalize the four entries required to close the accounts. Refer to the Chart of Accounts for exact wording of account titles.
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||
| Nuclear Landscaping Co. | |||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||
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In: Accounting
1. When a business has a market share of 100% it is known as:
A. A competitive market
B. A monopoly
C. An oligopoly
D. Monopolistic competition
2. What happens in the long run in perfect competition?
A. Abnormal profits are earned
B. Businesses are allocatively inefficient
C. A firm produces where average revenue is greater than average cost
D. A firm produces where marginal revenue equals marginal cost
3. From the following, when do losses always occur?
A. Marginal revenue equals the price
B. Average revenue is less than average cost
C. Average revenue equals average cost
D. Marginal cost equals average cost
4. In a monopoly market...
A. there are no barriers to entry
B. abnormal profits are only earned in the short run
C. the demand curve for a business is downward sloping
D. a profit maximising business produces where average revenue equals marginal revenue
In: Economics
Compare the financial performance of the two organizations and provide suggestions (based on the comparison) for the Walden Conservatory of Music, both from a financial and operational perspective. In Memo Format.
New England Conservatory of Music (NEC) Based on 2017 Form 990
Liquid Funds Indicator = 4.25 months
Debt to Asset Ratio= 18.9%
Debt to NA ratio = 123.9%
Program Service Ratio = 85.9%
Savings Indicator = 22.5%
Current Ratio = 3.45
Defensive Interval = 3.24
Liquid Funds Amount = ($111,359,654)
Return on Investment = 4.94%
Times Interest Earned Ratio = 22.2
Walden Conservatory of Music Based on 2017 Form 990
Liquid Funds Indicator: 1.52 months
Debt to Asset Ratio: 18.3%
Debt to NA Ratio: 22
Program Service Ratio: 75.9%
Savings Indicator: 4.12%
Current Ratio: 2.34
Defensive Interval: 2.43
Liquid Funds Amount: ($580,418)
Return on Investment: 6.9%
Times Interest Earned Ratio: 6.36
In: Accounting
Smallville Bank has the following balance sheet, rates earned on
its assets, and rates paid on its liabilities.
| Balance Sheet (in thousands) | |||||||
| Assets | Rate Earned (%) | ||||||
| Cash and due from banks | $ | 6,100 | 0 | ||||
| Investment securities | 23,000 | 9 | |||||
| Repurchase agreements | 13,000 | 7 | |||||
| Loans less allowance for losses | 81,000 | 11 | |||||
| Fixed assets | 11,000 | 0 | |||||
| Other earning assets | 3,900 | 10 | |||||
| Total assets | $ | 138,000 | |||||
| Liabilities and Equity | Rate Paid (%) | ||||||
| Demand deposits | $ | 10,000 | 0 | ||||
| NOW accounts | 70,000 | 6 | |||||
| Retail CDs | 19,000 | 8 | |||||
| Subordinated debentures | 15,000 | 9 | |||||
| Total liabilities | 114,000 | ||||||
| Common stock | 11,000 | ||||||
| Paid-in capital surplus | 3,100 | ||||||
| Retained earnings | 9,900 | ||||||
| Total liabilities and equity | $ | 138,000 | |||||
If the bank earns $121,000 in noninterest income, incurs $81,000 in
noninterest expenses, and pays $2,510,000 in taxes, what is its net
income? (Enter your answer in dollars, not thousands of
dollars.)
In: Finance
Smallville Bank has the following balance sheet, rates earned on
its assets, and rates paid on its liabilities.
| Balance Sheet (in thousands) | |||||||
| Assets | Rate Earned (%) | ||||||
| Cash and due from banks | $ | 6,500 | 0 | ||||
| Investment securities | 27,000 | 8 | |||||
| Repurchase agreements | 17,000 | 6 | |||||
| Loans less allowance for losses | 85,000 | 10 | |||||
| Fixed assets | 15,000 | 0 | |||||
| Other earning assets | 5,000 | 9 | |||||
| Total assets | $ | 155,500 | |||||
| Liabilities and Equity | Rate Paid (%) | ||||||
| Demand deposits | $ | 14,000 | 0 | ||||
| NOW accounts | 74,000 | 5 | |||||
| Retail CDs | 23,000 | 7 | |||||
| Subordinated debentures | 19,000 | 8 | |||||
| Total liabilities | 130,000 | ||||||
| Common stock | 15,000 | ||||||
| Paid-in capital surplus | 3,500 | ||||||
| Retained earnings | 7,000 | ||||||
| Total liabilities and equity | $ | 155,500 | |||||
If the bank earns $125,000 in noninterest income, incurs $85,000 in
noninterest expenses, and pays $2,550,000 in taxes, what is its net
income? (Enter your answer in dollars, not thousands of
dollars.)
In: Finance
Smallville Bank has the following balance sheet, rates earned on
its assets, and rates paid on its liabilities.
| Balance Sheet (in thousands) | |||||||
| Assets | Rate Earned (%) | ||||||
| Cash and due from banks | $ | 6,000 | 0 | ||||
| Investment securities | 22,000 | 8 | |||||
| Repurchase agreements | 12,000 | 6 | |||||
| Loans less allowance for losses | 80,000 | 10 | |||||
| Fixed assets | 10,000 | 0 | |||||
| Other earning assets | 4,000 | 9 | |||||
| Total assets | $ | 134,000 | |||||
| Liabilities and Equity | Rate Paid (%) | ||||||
| Demand deposits | $ | 9,000 | 0 | ||||
| NOW accounts | 69,000 | 5 | |||||
| Retail CDs | 18,000 | 7 | |||||
| Subordinated debentures | 14,000 | 8 | |||||
| Total liabilities | 110,000 | ||||||
| Common stock | 10,000 | ||||||
| Paid-in capital surplus | 3,000 | ||||||
| Retained earnings | 11,000 | ||||||
| Total liabilities and equity | $ | 134,000 | |||||
If the bank earns $120,000 in noninterest income, incurs $80,000 in
noninterest expenses, and pays $2,500,000 in taxes, what is its net
income? (Enter your answer in dollars, not thousands of
dollars.
In: Finance
Tesla is planning to open its first manufacturing plant (for the production of batteries) outside the US. You are one of the financial analyst that will help assessing the feasibility of the investment.
2. Tesla has commissioned one of the Big Four Consulting firm to provide some recommendations with regard to the current legal regulations in China. The consulting service fees will amount to 1 million dollars.
3. The Chinese government has in place a support scheme for foreign companies that invest in the manufacturing industry. The Chinese government will pay a 10% cash grant of the initial capital investment (this will be paid as a lump sum at the time of the investment).
4. Suppose that the life of the project is 10 years and the initial investment in the project today is 500 million dollars.
5. The plant will be depreciated to $0 book value over the 10 years and can be sold by Tesla in year 20 for 150 million dollars.
6. It has been estimated that Tesla would be able to generate gross revenues of 75 million dollars per year (starting at the end of the first year).
7. The new production of batteries in China will have a direct impact on the production of batteries in the US. The revenues generated in US are estimated to drop by 8 million dollars each year.
8. The annual variable costs are expected to be 25% of the “incremental annual revenues”.
9. The current weighted average cost of capital for Tesla is 12%, and the project has the same risk profile and financial structure of the company. The company tax rate is 30%.
What would happen to the WACC and NPV in the case Tesla would be using a higher proportion of debt to finance this project? Under what conditions the WACC can be used as a discount rate for the cash flows of a specific project?
In: Accounting
Question No.4: {10marks}
In: Economics
In: Economics
The nebular theory is a name for the idea that the Solar System formed from a rotating cloud (nebula) of gas and dust. Is it really possible for science to inform us about things that may have happened billions of years ago? To address this question, test the nebular theory of the formation of the solar system against each of the three hallmarks of science discussed in the posted note Nature of Science in Week 1. Be as detailed as possible in explaining whether nebular theory does or does not satisfy these hallmarks. Use your explanations to decide whether the theory can really tell us about how our solar system formed. Explain and defend your answer.
Hallmarks of Science:
Science seeks explanations for observed phenomena that rely solely on natural causes.
Science progresses through the creation and testing of models of nature that explain the observations as simply as possible.
A scientific model must make testable predictions about natural phenomena that would force us to revise or abandon the model if the predictions do not agree with observations.
In: Physics