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Busi 320 Dev Shell - 2012 Fall B Assignment 1

Question # 00001446
Subject: Business / Accounting
Due on: 09/21/2013
Posted On: 09/21/2013 04:35 AM
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1.Problem 2-1 Income statement [LO1]

Frantic Fast Foods had earnings after taxes of $1,200,000 in the year 2009 with 322,000 shares outstanding. On January 1, 2010, the firm issued 30,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 24 percent.

(a)

Compute earnings per share for the year 2009.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Earnings per share

(b)

Compute earnings per share for the year 2010.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Earnings per share

2.Problem 2-3 Gross profit [LO1]

Hillary Swank Clothiers had sales of $428,000 and cost of goods sold of $260,000.

(a)

What is the gross profit margin (ratio of gross profit to sales)?(Round your answer to the nearest whole percentage. Omit the "%" sign in your response.)

Gross profit margin

(b)

If the average firm in the clothing industry had a gross profit of 35 percent, how is the firm doing?

The firm is .

3.Problem 2-4 Operating profit [LO1]

A-Rod Fishing Supplies had sales of $2,160,000 and cost of goods sold of $1,550,000. Selling and administrative expenses represented 10 percent of sales. Depreciation was 6 percent of the total assets of $4,450,000.

What was the firm’s operating profit? (Omit the "$" sign in your response.)

Operating profit

4.Problem 2-6 Income statement [LO1]

Given the following information, prepare an income statement for the Dental Drilling Company. (Input all amounts as positive values. Omit the "$" sign in your response.)

Selling and administrative expense

$

72,000

Depreciation expense

71,000

Sales

536,000

Interest expense

45,000

Cost of goods sold

179,000

Taxes

53,000


5.Problem 2-7 Income statement [LO1]

Given the following information, prepare an income statement for Jonas Brothers Cough Drops. (Input all amounts as positive values. Omit the "$" sign in your response.)

Selling and administrative expense

$

326,000

Depreciation expense

196,000

Sales

1,600,000

Interest expense

124,000

Cost of goods sold

551,000

Taxes

167,000


6.Problem 2-11 Depreciation and earnings [LO1]

Stein Books, Inc., sold 2,300 finance textbooks for $200 each to High Tuition University in 2010. These books cost $170 to produce. Stein Books spent $12,300 (selling expense) to convince the university to buy its books.

Depreciation expense for the year was $15,500. In addition, Stein Books borrowed $102,000 on January 1, 2010, on which the company paid 17 percent interest. Both the interest and principal of the loan were paid on December 31, 2010. The publishing firm’s tax rate is 30 percent.

Prepare an income statement for Stein Books. (Input all amounts as positive values. Omit the "$" sign in your response.)

7.Problem 2-15 Development of balance sheet [LO3]

Arrange the following items in proper balance sheet presentation (Be sure to list the assets in order of their liquidity. Input all amounts as positive values. Omit the "$" sign in your response):

Accumulated depreciation

$

347,000

Retained earnings

46,000

Cash

14,000

Bonds payable

137,000

Accounts receivable

51,000

Plant and equipment—original cost

668,000

Accounts payable

38,000

Allowance for bad debts

6,000

Common stock, $1 par, 100,000 shares outstanding

100,000

Inventory

71,000

Preferred stock, $52 par, 1,000 shares outstanding

52,000

Marketable securities

28,000

Investments

24,000

Notes payable

39,000

Capital paid in excess of par (common stock)

91,000


8.Problem 2-16 Earnings per share and retained earnings [LO1, 3]

Okra Snack Delights, Inc., has an operating profit of $241,000. Interest expense for the year was $35,800; preferred dividends paid were $34,100; and common dividends paid were $39,600. The tax was $61,400. The firm has 23,700 shares of common stock outstanding.

(a)

Calculate the earnings per share and the common dividends per share.(Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Earnings per share

Common dividends per share


(b)

What was the increase in retained earnings for the year?(Omit the "$" sign in your response.)

Increase in retained earnings

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Solution to Busi 320 Dev Shell - 2012 Fall B Assignment:1

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Tutorial Preview …2-6 xxxxxx statement xxxxx Given the xxxxxxxxx information, prepare xx income xxxxxxxxx xxx the xxxxxx Drilling Company xxxxxx all amounts xx positive xxxxxx xxxx the xxx sign in xxxx response ) xxxxxxx and xxxxxxxxxxxxxx xxxxxxx $ xxxxxx Depreciation expense xxxxxx Sales 536,000 xxxxxxxx expense xxxxxx xxxx of xxxxx sold 179,000 xxxxx 53,000 DENTAL xxxxxxxx COMPANY xxxxxx xxxxxxxxx Sales x 536,000 Cost xx goods sold xxxxxxx Gross xxxxxx xxxxxxx Selling xxx administrative expense xxxxxxxxxxxx expense Operating xxxxxx 214,000 xxxxxxxx xxxxxxx 45,000 xxxxxxxx before taxes xxxxxxx Taxes…
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BUSI-320_Corporate_Finance-2013_Fall-B_(Moten)_assignment-_Homework_1.docx (265.67 KB)
Preview: Earnings xxx the xxxx ended December xxx 2010 and xxxxxxxxxxx Balance xxxxxx xxx 2009 xxx 2010 of xxxxx Corporation:   JETER CORPORATIONIncome xxxxxxxxxxxx the xxxx xxxxx December xxx 2010  Sales$4,190,000    Cost xx goods sold 2,820,000 xxxxxxxxxxxxxxxxxxxxx profits 1,370,000 xxxxxxxxxxxxx xxx administrative xxxxxxxxxxxxxxxx    Depreciation expense 319,000 xxxxxxxxxxxxxxxxxxxxxxxxx income 366,000    Interest xxxxxxxxxxxxxxx         Earnings xxxxxx xxxxxxxxxxxxxx    Taxes 227,000 xxxxxxxxxxxxxxxxxxxxxxxx after taxes 49,700 xxxxxxxxxxxxxxx stock dividends 10,000 xxxxxxxxxxxxxxxxxx available xx xxxxxx stockholders$39,700 xxxxxxxxxxxx outstanding 150,000    Earnings xxx share$ 26 xxxxxxxxxxxxxxx of xxxxxxxx xxxxxxxxxxx the xxxx Ended December xxx 2010  Retained earnings, xxxxxxxx January xx xxxxxxxxxxx       Add: xxxxxxxx available to xxxxxx stockholders, 2010 39,700       Deduct: xxxx dividends xxxxxxxx xxx paid xx 2010 25,000    Retained xxxxxxxxx balance, December xxx 2010$60,600 xxxxxxxxxxxxxxxxx xxxxxxx SheetsFor xxxx and 2010  Year-End2009 Year-End2010   Assets       Current xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx   $60,000       Accounts xxxxxxxxxx (net) 549,000 xxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx    686,000 xxxxxxxxxxxxxxxxxxx expenses 61,600    37,800 xxxxxxxxxxxxxxxxxxxxxxxxxxx current assets 1,428,600    1,356,800 xxxxxxxxxxxxxxxxxxxxxxx (long-term xxxxxxxxxxxxxxxxxxx xxxxxxxxxxxx       Plant xxx equipment 2,240,000    2,930,000 xxxxxxxxxxxxxxxxx Accumulated depreciation 1,990,000 xxxxxxxxxxxxxxx          Net xxxxx xxx equipment 250,000 xxxxxxxxxxxxx       Total assets$1,768,700 xxxxxxxxxxxxxx       Liabilities and xxxxxxxxxxxxxxx Equity       Current xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx   $555,000 xxxxxxxxxxxxxxxxx payable 558,000    558,000 xxxxxxxxxxxxxxxxxxx expenses 72,800    50,900 xxxxxxxxxxxxxxxxxxxxxxxxxxx current xxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx    Long-term xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx payable, 2015 195,000 xxxxxxxxxxxxx            Total liabilities 1,132,800 xxxxxxxxxxxxxxx    Stockholders’ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxx $100 xxx value 90,000    90,000 xxxxxxxxxxxxxxxxxx stock, $1 xxx value 150,000 xxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxx paid xx excess of xxxxxxxxxxxx    350,000       Retained xxxxxxxxxxxxxxxx    60,600 xxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx equity 635,900 xxxxxxxxxxxxx       Total liabilities xxx stockholders’ equity$1,768,700 xxxxxxxxxxxxxx       If xxx xxxxxx value xx a share xx common stock xx 3 x xxxxx book xxxxx for 2010, xxxx is the xxxxxxxx P/E xxxxx xxx 2010? (Round xxxx intermediate calculations xx 2 decimal xxxxxx Enter xxxx xxxxxxx value xxxxxxx to the xxxxxxx whole number xxxxxxxxxxxx ratio   Explanation:Book xxxxx xxx share=Stockholders’ xxxxxx ? Preferred xxxxxxxxxxxxx shares outstanding       Book xxxxx per xxxxx xxxxxxxxxxxxxxxx ? $90,000)=$560,600  = xx 74150,000150,000 Market value= 3 x × $3 xx = xxx xxxxxxx ratio= $11 xx / $ xx = 46 xx or xxxxx xxxxxxx 3-14 xx Pont system xx analysis [LO3]The xxxx Card xxxxxxx xxx a xxxxxxxxxxxxxxxx (investment) ratio xx 19 percent xxxxx the xxxxxxxxxxxxxxxxxxxx xxxxx is xx percent, what xx the return xx equity? (Round xxxx xxxxxx to x decimal places xxxx the "%" xxxx in xxxx xxxxxxxx )  Return xx equity47 50  % xxxxxxx the firm xxx no xxxxx xxxx would xxx return-on-equity ratio xxxxxxxxxx the "%" xxxx in xxxx xxxxxxxx )  Return xx equity19  %  19 xxxxxxx 3-15 Du xxxx system xx xxxxxxxx [LO3]Using xxx Du Pont xxxxxxx evaluate the xxxxxxx of xxx xxxxxxxxx relationships xxx the Lollar xxxxxxxxxxx (a)Lollar Corporation xxx a xxxxxx xxxxxx of x 5 percent xxx its return xx assets xxxxxxxxxxxx xx 8 xx percent   xxxx is its xxxxxx turnover xxxxxxxxxxxx xxxxxxxxxxxxx value xxxxxxxxxxx 2 decimal xxxxxx )  Assets turnover xxxxxx 59   (b)If xxx xxxxxx Corporation xxx a debt-to-total-assets xxxxx of 65 xxxxxxxx what xxxxx xxx firm’s xxxxxx on equity xxxxxxxxxxx your answer xx 2 xxxxxxx xxxxxx Omit xxx "%" sign xx your response xxxxxxxxxxx on xxxxxxxx xxxxxxx  (c)What xxxxx happen to xxxxxx on equity xx the xxxxxxxxxxxxxxxxxxxx xxxxx decreased xx 60 percent? (Round xxxx answer to x decimal xxxxxx xxxx the xxx sign in xxxx response )  Return xx equity21 xxxxxxx xxxx Problem xxxx Du Pont xxxxxx of analysis xxxxxxxxxx Rice xxx xxxxx Stores xxx $4,670,000 in xxxxxx sales The xxxx earns x x percent xx each dollar xx sales and xxxxx over xxx xxxxxx 3 x times per xxxx It has xxxxxxxx in xxxxxxx xxxxxxxxxxx and xxxxxxxx in long-term xxxxxxxxxxx  (a)What is xxx return xx xxxxxxxxxxxxxxx equity? (Do xxx round intermediate xxxxxxxxxxxx Round your xxxxxx to x xxxxxxx places xxxx the "%" xxxx in your xxxxxxxx )  Return xx xxxxxxxxxxxxx equity27 xxxxxxx   (b)If the xxxxx base remains xxx same xx xxxxxxxx in xxxxxxxx but total xxxxx turnover goes xx to x xxx what xxxx be the xxx return on xxxxxxxxxxxxxxx equity? xxxxxx xxxx the xxxxxx margin stays xxx same as xx current xxx xxxxxxxxx liabilities xxxxx not round xxxxxxxxxxxx calculations  Round xxxx answer xx x decimal xxxxxx  Omit the xxx sign in xxxx response xxxxxxxx xxxxxx on xxxxx holders' equity31 xxxxxxx  21 Problem xxxx Interpreting xxxxxxx xxxx the xx Pont system xx analysis [LO3]Assume xxx following xxxx xxx Cable xxxxxxxxxxx and Multi-Media, xxx   CableCorporationMultiMedia, Inc xxxxxxx income$30,700 $139,000   Sales 314,000  2,120,000   Total xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx equity 274,000  447,000  (a-1)Compute xxxxxx on stockholders’ xxxxxx for both xxxxx  (Round xxxx xxxxxxx to x decimal places xxxx the "%" xxxx in xxxx xxxxxxxx )  Return xxxxxxxxxxxxxxxxx equity  Cable Corporation11 xxxxxxx    Multi Media, xxx 31 xxxxxxx xxxxxxxxxxxxxx firm xxx the higher xxxxxxxxxxxxxxxxxxxxxxxx Inc    xxxxx  Compute xxx xxxxxxxxx additional xxxxxx for both xxxxx  (Enter only xxxxxxx values xxxxxxx xx 2 xxxxxxx places Omit xxx "%" sign xx your xxxxxxxx xxxxxxxxxx CorporationMulti-Media, xxx   Net income x Sales9 77  % xxx 56  % xxxxxxxxx xxxxxx / xxxxx assets6 56  % xxxx 03  %    Sales x Total xxxxxx xxxxxxxxxxxxxxxxx 29         Debt x Total assets41 xxxxxxx  51 68  % xxxx Problem xxxx xxxxxxx ratio xxxxxxxx [LO2]The balance xxxxx for the xxxxx Corporation xx xxxxx below xxxxx for the xxxx were $3,680,000, xxxx 75 xxxxxxx xx sales xxxx on credit xxxxx CORPORATIONBalance Sheet xxxxxxxxxxxxxxxxxxxxx and xxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx       Accounts xxxxxxxxxxxxxxx     Accounts receivable 324,000 xxxxxxxxxxxxxxxxxxx taxes 93,000     Inventory 244,000 xxxxxxxxxxxxxxxxx payable xxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxx and xxxxxxxxxxxxxxxxxx       Common stock 100,000 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx capital 150,000          Retained xxxxxxxxxxxxxxxxx            Total xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx liabilities xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx equity$1,050,000      Compute xxx following ratios (Enter xxxxxxxxxxxxx values xxxxxxxxxxx x decimal xxxxxx Omit the xxx sign in xxxx response):    (a)Current xxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ratio %(d)Asset xxxxxxxxxxxxxxxxxxxx collection period daysrev: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ratio  =  Current xxxxxxxxxxxxx liabilities  = xxxxxxxxxxxxxxxxxxxxx xxx 87x(b)Quick xxxxx  =  (Current xxxxxx – inventory)Current xxxxxxxxxxxxxx  $345,000$315,000 = xxx xxxxxxxxxxxx to xxxxx assets  = xxxxxxx debtTotal assets = xxxxxxxxxxxxxxxxxxxxxxxxx  48 xxxxxxxxxxx xxxxxxxxxxxxx  SalesTotal xxxxxxxxx  $3,680,000$1,050,000 =  3 xxxxxxxxxxxxxxxxxxxxxxxxxx period = xxxxxxxxxx receivableAverage xxxxx xxxxxx sales = xxxxxxxxxx ÷($3,680,000 × x 75)360 days= xxxxxxxxxxxxxxxx per xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxx 26 xxxxxx Problem 3-24 xxxx utilization and xx Pont xxxxxx xx analysis xxxxxxxxxx the income xxxxxxxxx for J xx Wedding xxxxxx xxxxxxx the xxxxxxxxx ratios:J LO xxxxxxx GOWNSIncome Statement  Sales$281,000 xxxxxxxxxxxxxxxxx Cost xx xxxxx sold 169,000 xxxxxxxxxxxxxxx profit 112,000       Less: xxxxxxx and administrative xxxxxxxxxxxxxxx       Less: xxxxx xxxxxxxxxxxxxxx      Operating xxxxxxxxxxxxxx       Less: Interest xxxxxxxxxxxxxx      Earnings before xxxxxxxxxxxx
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