A corporation, which had 15,000 shares of common stock outstanding, declared a 3-for-1 stock split. (a) What will be the number of shares outstanding after the split? (b) If the common stock had a market price of $240 per share before the stock split, what would be an approximate market price per share after the split?
Company ABC's earnings and dividends will grow at 0.7% monthly during the next five years. Its growth will stop after year 5. In year 6 and afterward, it will pay out all earnings as dividends. Assume next year's EPS is $12 and the dividend is $8 and the market capitalization rate is 8%.
3. On October 1, 2001, Coast Financial loaned Barr Corporation $300,000, receiving in exchange a nine-month, 12% note receivable. Coast ends its fiscal year on December 31 and makes adjusting entries to accrue interest earned on all notes receivable. The interest earned on the note receivable from Barr Corporation during 2002 w
The following information was taken from the annual manufacturing overhead cost budget of the Fernetti Company. Variable manufacturing overhead costs $33,000 Fixed manufacturing overhead costs $21,450 Normal production level in labor hours 16,500 Normal production level in units 4,125 Standard labor hour
A corporation issued $600,000 of 8%, 5-year bonds on January 1, at 102. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization, the amount of bond interest expense to be recognized on July 1 is a. $22,800. b. $24,000. c. $25,200. d. $48,000. Amway Comp
Sales for JaVon Apparel are expected to be 40,000 units in October. The company likes to maintain 20 percent of sales for each month in ending inventory (i.e. end of October). Beginning inventory is 10,000 units. 1) How many units should JaVon produce for the coming month?    ...
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Please see attached... The BeenThereDone Company has net income of $200, interest expense of $50, and depreciation of $50. The corporate tax rate is 50%. What is the cash coverage ratio?
J&J Enterprises is formed on December 31, 2000. At that point it has one asset costing $2,487. The asset has a three-year life with no salvage value and is expected to generate cash flows of $1,000 on December 31, in the years 2001, 2002, and 2003. Actual results are the same as planned. Depreciation is the firm's only expense.
O'Meara Inc. plans to issue $8 million of perpetual bonds. The face value of each bond is $1,000. The semi-annual coupon on the bond is 4.5% Market interest rate on one-year bonds are 8%. With equal probability, the long-term market interest rate will be either 12% or 6% next year. Assume investors are risk-neutral. a. If the
Should there be more of a standard regarding the income statement or is it acceptable that there is some room for variances? Support your response.
Company ABC's earnings and dividends will grow at 0.7% monthly during the next five years. Its growth will stop after year 5. In year 6 and afteward, it will pay out all earnings as dividends. Assume next year's EPS is $12 and the dividend is $8 and the market capitalization rate is 8%. What is ABC's stock price? Thanks.
Valencia Corporation, a U.S. corporation, has 2003 taxable income from U.S. sources of $300,000 and from foreign sources of $120,000 before considering the impact of foreign taxes. It paid $20,000 of foreign taxes during 2003. a. If Valencia's foreign taxes are not creditable, calculate its U.S. tax liability for 2003. b.
BE2-4 Becky Sherrick's regular hourly wage rate is $14, and she receives an hourly rate of $21 for work in excess of 40 hours. During a January pay period, Becky works 45 hours. Becky's federal income tax withholding is $95, her FICA tax withheld is $53.20, and she has no voluntary deductions. Compute Becky Sherrick's gross e
The state and local police department are trying to analyze crime rates so they can shift their patrols from decreasing-rate areas to areas where rates are increasing. The city and county have been geographically segmented into areas containing 5,000 residences. The police recognize that not all crimes and offenses are reported:
1. The cost of fire insurance for a manufacturing plant is generally considered to be a: a. product cost. b. period cost. c. variable cost. d. all of the above. 2. An opportunity cost is: a. the difference in total costs which results from selecting one alternative instead of another. b. the benefit forgone by selec
Illinois Power & Heat just spend $5 million repairing one of its electrical generating stations that was damaged by a tornado. The loss was uninsured. Management has asked the public service commission for approval to treat the $5 million as an asset for rate-making purpose rather than as an allowed expense. What difference w
Sales for Ross Pro's Sports Equipment are expected to be 4,800 units for the coming month. The company likes to maintain 10 percent of unit sales for each month in ending inventory. Beginning inventory is 300 units. How many units should the firm produce for the coming month?
I would like to know what the problem means by *Compute the amount of overhead to be allocated to each product under activity-based costing*. Isn't it the amount of overhead already calculate? (See attached file for full problem description)
An employee receives an hourly rate of $25, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46 federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100
Question 13: Identify each of the following expenditures as chargeable to (a) Land, (b) Land Improvements, (c) Buildings, (d) Machinery and Equipment, or (e) other account. (1) Cost of paving parking area for employees and customers. (2) Insurance during construction of building. (3) Interest incurred on loan du
1. As a general rule, the maturity of assets should be matched with the maturity of the financing. When (if ever) do you think financial managers should deviate from this principle? 2. In theory, stock price is based on the present value of future cash flows. Could you use this principle to explain the stock price of a start-
Hale's TV Productions has acquired a script for a pilot episode of a new television show. A competitor has heard of the script, and offered Hale $100,000 for the script and rights to the series concept. If Hale decides to produce the pilot and market the series themselves, they'll face after-tax production costs of $100,000.
(Computation of Bond Liability) Lance Armstrong Inc. manufactures cycling equipment. Recently the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise fund
(Recognition of Profit on Long-Term Contracts) During 2004 Pierson Company started a construction job with a contract price of $1,500,000. The job was completed in 2006. The following information is available. 2004 2005 2006 Costs incurred to date $400,000 $935
(Assumptions, Principles, and Constraints) Presented below are assumptions, principles, and constraints: 1. Economic entity assumption 5. Historical cost principle 9. Materiality 2. Going concern assumption 6. Matching principle 10. Industry practices 3. Monetary unit assumption 7. Full disclosure principle 11. Con
On December 31,2003, Bercalir, Inc. had 200,000,000 shares of common stock and 3,000,000 shares of 9%, $100 par, value cumulative preferred stock issued and outstanding. There were no preferred dividends in mrears as of January I, 2004. On March I, 2004, Bercalir purchased 24,000,000 shares of its common stock as treasuIy stock.
Abnormal earnings are: AEt= Actual earning t-Required or "normal" earnings t Which may be expressed as Aet= NOPAT t- (r x BVt-1) Where NOPAT is the firm's net operating profit after taxes, r is the cost of equity capital and BV t-1. Required: Solve the following problems: 1. If NOPAT is $5,000, r=15%, and BVt-1 is $50
Organet Stamping Company manufactures a variety of products made of plastic and aluminum components. During winter months, substantially all production capacity is devoted to lawn sprinklers for the following spring and summer seasons. Other products are manufactures during the remainder of the year. Because a variety of pro
A machine with a CCA rate of 20% is purchased for $75,000 by a company with a marginal corporate tax rate of 40%. The expectation is that the machine could be sold after 10 years for $10,000. If the company has a required rate of return of 10%, what is the preset value of the perpetual CCA tax shield assuming the asset is not