Compaq Ltd has a net income after tax of $2 000 000 for the year ended 30 June 2018. At the beginning of the period Compaq Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 January 2018 Compaq Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2018 Compaq Ltd made a one-for-five bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Compaq Ltd also had 500 000, $1.00, 5% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2017 was $1.50 per share.

Required: a) Calculate the basic EPS amount for 2018.

b) Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS.

Compare Nike and Adidas estimated stock prices with actual stock prices as of January 2, 2019. Then tell whether each stock is undervalued or fair-valued or overvalued based on your estimation. What’s your decision if you hold these stocks? What’s your decision if you don’t hold these stocks?

1. Using annual stock price between 2013 and 2018, compute the following returns. For stock price data, use the closing price of the last trading day of the year:

1) Total Dollar Return for 2014, 2015, 2016, 2017, 2018

2) Total Percent Return for 2014, 2015, 2016, 2017, 2018

2. Using annual stock price between 2013 and 2018, compute the following returns. For stock price data, use the closing price of the last trading day of the year: (25 points)

1) Arithmetic Average Return

2) Geometric Average Return

3) Holding Period Return

4) 2-year forecast Return

5) 3-year forecast Return

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:

1. Based on the above data for both years, compute for the two years 2018 , and 2017 with explanation (give your comments on each ratio) .
   1. times interest earned

2. fixed charge

3. debt ratio

4. debt/equity ratio

5. debt to tangible net worth

2. Comment on the firm's long-term borrowing ability based on the analysis.

Arnold Industries has pretax accounting income of $62 million for the year ended December 31, 2018. The tax rate is 40%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2018. An $12 million advance rent payment at the inception of the lease is tax-deductible in 2018 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term.

Required:
1. Complete the following table given below and prepare the appropriate journal entry to record Arnold’s income taxes for 2018.
2. Prepare the appropriate journal entry to record Arnold’s income taxes for 2019. Pretax accounting income was $49 million for the year ended December 31, 2019.
3. Assume a new tax law is enacted in 2019 that causes the tax rate to change from 40% to 30% beginning in 2020. Complete the following table given below and prepare the appropriate journal entry to record Arnold’s income taxes for 2019.

TOPIC: Hypothesis Testing (Statistic Question)

In 2015, I taught my first semester at Yale University, a standard deviation was calculated based on the scores on the SDF, the question was asking whether or not I encourage student questions in my classroom. The standard deviation for the 2015 class (economics class) was 1.03 with 31 responses. In 2018, the standard deviation for that same question came out to be 0.88 with 24 responses in my calculus class. [2015 = economics class, 2018 = calculus class] Questions are below.

(a). Please test the hypothesis that the Standard Deviation of the 2015 class on this question is larger than it is for the 2018 class at a significance level of 0.05. Please do problem by hand and find the correct critical value using the R Studio (software program). If you statisticians are familiar with that software.

(b). Please test the hypothesis that the Standard Deviation of the 2015 class on this question is different than it is for the 2018 class at a significance level of 0.05. Please do problem by hand and find the correct critical value using the R Studio (software program).

THANK YOU CHEGG EXPERTS

The 2018 income statement of Adrian Express reports sales of $15,015,000, cost of goods sold of $8,863,500, and net income of $1,570,000. Balance sheet information is provided in the following table.

Industry averages for the following four risk ratios are as follows:

Required:

1. Calculate the four risk ratios listed above for Adrian Express in 2018. (Use 365 days in a year. Round your answers to 1 decimal place.)

On January 1, 2018, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $827,368 and has an expected economic life of five years. Nevels expects the residual value at December 31, 2021, will be $103,000. Negotiations led to the lessee guaranteeing a $146,000 residual value.

Equal payments under the lease are $203,000 and are due on December 31 of each year with the first payment being made on December 31, 2018. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:

1. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2018, to record the lease.
2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2018, related to the lease.

On July 31, 2018 oxford Inc. purchased a machine by signing an 8-month $40,000 zero interest bearing promissory due March 31, 2019. The market rate of interest on similar notes is 6%. The machine will be depreciated using the double-declining method with a useful life of 10 years and salvage value of $ 3,000. Oxford has a 12/31 year-end.

1) Prepare journal entry to record the purchase of the machine on July 31, 2018?

2a) In space provided blow, please prepare the necessary adjusting journal entry at December 31, 2018 related to the short-term note?

2b) In space provided blow, please prepare the necessary adjusting journal entry at December 31, 2018 related to the machine?

3) Prepare the journal entry when the note matures on March 31, 2019?

4a) Calculate the amount of depreciation Oxford would record on the machine during 2019 (i.e., the second year the asset is being depreciate)?

4b) What is the carrying value of the machine at December 31, 2019?

On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,085,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $820,000, retained earnings of $370,000, and a noncontrolling interest fair value of $465,000. 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.

During the next two years, Smashing reported the following:

Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 50 percent of the current year purchases remain in Smashing's inventory.

1. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018.
2. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.

On January 1, 2018, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $929,000 and has an expected useful life of five years. Allied expects the residual value at December 31, 2022, will be $313,000. Negotiations led to the lessee guaranteeing a $366,000 residual value.

Equal payments under the finance/sales-type lease are $213,000 and are due on December 31 of each year with the first payment being made on December 31, 2018. Karrier is aware that Allied used a 6% interest rate when calculating lease payments. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:

1. Prepare the appropriate entries for both Karrier and Allied on January 1, 2018, to record the lease.

2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2018, related to the lease.