Share
Explore BrainMass

Finance

Personal Financial Management

13.1 Ray's Dilemma: Common Stocks or Mutual Funds? Ray Sutton has worked in the management services division of Strategic Consultants for the past 5 years. He currently earns a n annual salary of about %95,000. At 33, he's still a bachelor and has accumulated about $60,000 in savings over the past few years. He keeps his sa

Payable Shareholders of Record Stock Dividends

Instructions: You will complete each of the following problems using Microsoft Excel. In Excel, create a tab for each problem. Solve each problem on the excel tab in a professional manner (make sure your solution is clear and neatly organized). Problem One (Chapter 10): On January 1, 2011, the Seikely-Anderson Company sign

financial statement fraud exposure areas

Please help with the following problem. Provide at least 200 words and include references. What are the four different exposure areas that must be examined while detecting financial statement fraud? Provide a detailed answer.

Planning a Budget for Orlo Company

See excel attached: Orlo Company is planning their budget for the first half of 2012. Their budgeted sales for the last part of 2011 and the first 6 months of 2012 are as follows: Month Sales Nov-11 $200,000 Dec-11 $150,000 Jan-12 $100,000 Feb-

Kim had the following transactions for 2006: Salary: $Kim had the following transactions for 2006: Salary: $48,000 Damage award (compensatory) for city bus accident: $18,000 Loss on sale of stock investment: $5,600 Loan from father to purchase auto: $14,000 Alimony paid to ex-wife: $8,000 What is Kim's AGI for 2006? 2. John forms a corporation and transfers property having a basis to him of $18,000 and a fair market value of $26,000 to the corporation for 1,000 shares of $10 par stock. One year later, Hal transfers property having a basis to him of $2,500 and a fair market value of $3,500 for 100 shares of the stock. Hal is not related to John. The corporation issued no other stock. How much gain does John recognize on his exchange? What is the basis to John of his 1,000 shares? b. What gain or loss is recognized by the corporation when it issues its shares to John? What is the basis to the corporation of the property it received from John? c. How much gain does Hal recognize on his exchange? What is the basis to Hal of his 100 shares? 3. Shareholders in closely held C-corporations often pay themselves large salaries in order to avoid double taxation on corporate income. Briefly explain the double taxation problem and how paying large salaries to owners avoids it. b. Briefly discuss how the reasonable compensation issue applies to S-corporations. c. Briefly discuss the IRS s position on reasonable compensation for owner-employees of closely held C-corporations.

1. Kim had the following transactions for 2006: Salary: $48,000 Damage award (compensatory) for city bus accident: $18,000 Loss on sale of stock investment: $5,600 Loan from father to purchase auto: $14,000 Alimony paid to ex-wife: $8,000 What is Kim's AGI for 2006? 2. John forms a corporation and transfers property hav

business and financial environment

Consider a newly-listed company of interest to you and using the 2009/2010 annual accounting reports describe its business and financial environment. Subsequently, critically discuss the following topics: a) Write a report for senior managers on how they could improve the company's financial performance and achieve the primar

Finance: Sales or purchases of Treasury securities to increase the M1 money supply

Assume there is $400 billion of currency in circulation in the economy outside the banking system, that depository institutions in the economy have $800 billion in checkable deposits, and that those same depository institutions have $80 billion in reserves on deposit at the central bank. All depository institutions are "loaned o

Prepare budgeted financial statements for the Ma & Pa Kettle's Chili Company: 1. Ma & Pa Kettle's Chili Company has begun selling a new chili recipe and they want you to help them with next year's budgeted financial statements. Using the Ma & Pa Kettle information complete Ma & Pa's forecast and answer the questions which follow. Ma & Pa Kettle's Chili Company has begun selling a new chili recipe and they want you to help them with next year's budgeted financial statements. Using the worksheet below, complete Ma & Pa's forecast and answer the question which follows. Assumptions To begin with, Ma & Pa are sure sales will grow 50% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales (that means if sales grows a certain percentage, then the account in question will grow by that same percentage). Assume that fixed expenses will remain unchanged and that $1,000 worth of new Fixed Assets will be obtained next year. Lastly, the current dividend policy will be continued next year. Ma & Pa Kettle Chili Company, Inc. Financial Forecast for 2010 2009 Est for 2010 Sales $10,000 _______ COGS 4,000 _______ Gross Profit 6,000 _______ Fixed Expenses 3,000 _______ Before-Tax Profit 3,000 _______ Tax @ 33.3333% 1,000 _______ Net Profit $2,000 _______ Dividends $0 _______ Current Assets $25,000 _______ Net Fixed Assets 15,000 _______ Total Assets $40,000 ______ Current Liabilities $17,000 ______ Long-term debt 3,000 ______ Common Stock 7,000 ______ Retained Earnings 13,000 ______ Total Liabs & Eq $40,000 ______ Amount need to balance the balance sheet _____ This is the question. (Projected total assets minus projected total liabilities & equity *) If this number is positive it means Ma & Pa need additional external funding to finance their projected asset growth. If this number is negative it means Ma & Pa have programmed too much financing for the amount of assets they project.

Prepare budgeted financial statements for the Ma & Pa Kettle's Chili Company: 1. Ma & Pa Kettle's Chili Company has begun selling a new chili recipe and they want you to help them with next year's budgeted financial statements. Using the Ma & Pa Kettle information complete Ma & Pa's forecast and answer the questions which

Monetary Impact, Cost Benefit and Additional Benefit

1. Identify one each (1) benefit, (2) disbenefit, and (3) monetary cost that would impact each of the following projects: a. A new electrical distribution station in a developing part of the city, with feeds from the city power plant and from a regional electrical grid b. Annexation of an adjoining semirural area into th

S&R Rentals rents and services different types of yard-improvement equipment. Information about the company's financial performance for a recent fiscal period is provided below:

The following document contains some brain teasers randomly selected for another study template by my peers for an upcoming study session 1. S&R Rentals rents and services different types of yard-improvement equipment. Information about the company's financial performance for a recent fiscal period is provided below: Average

Post-2008 Economic and Financial Realities

Given the new economic and market realities prevailing since the 2008 great recession, first list and then explain in detail four behavioral finance lessons that can be of value to anyone going forward in life. You may answer this question from the perspective of your own personal life as an individual, or the perspective of you

Finance Problem: Basic Valuation

B5. (Expected return and risk) General Eclectic Corporation is considering three possible capital investment projects. The projected returns depend on the future state of the economy as given here. a. Calculate each project's expected return, variance, and standard deviation. b. Rank the projects on the basis of (1) expected

fraud red flags

While performing an audit of CCC Corporation, the audit team noticed something that didn't look right. The company's receivables aging report showed that bank loan receivables were approximately $91 million. That audit team calculated the bank loan edible receivables to be approximately $50 million. The client didn't identify sp

Transaction Analysis and Financial Statements

Expert Consulting Services Inc. was organized on March 1, 2010 by two former college roommates. The corporation provides computer consulting services to small businesses. The following transactions occurred during the first month of operations: March 2: Received contributions of $20,000 from each of the two principa

Subchapter S; S corporations; Lang Corporation; S corporation stock purchases

1. What are the eligibility requirements that a corporation must meet in order to qualify under Subchapter S? 2. What limits are placed on the selection of a tax year of an S corporation? How do these limits differ from those applicable to C corporations and partnerships? 3. Durrabusiness is organized as a regular C corpo

Characteristics of MACS; efficiency in handling insurance claims

Chow Company is an insurance company in Hong Kong. Chow hires 55 people to process insurance claims. The volume of claims is extremely high and all claims examiners are kept extremely busy. The number of claims in which errors are made runs about 10%, If a claim has an error, it must be corrected by the claims examiners. Aft

Financial Management Theory

1. Much of financial management theory is based upon the assumption that individuals act rationally in their decision making. Text has noted several areas where the conclusion is that individuals do not act rationally. What is the implication of this conclusion on our understanding of traditional financial management. 2. How

Differential analysis and financial analysis

A frequent activity in managerial accounting is differential analysis. Differential analysis is about relevant costs for decision-making in management accounting. Only those costs and benefits that "differ" between alternatives are relevant in a decision. All other costs and benefits are irrelevant and should be ignored. Differe

Calculating Arc Elasticity of Demand and Optimal Price

Please help with the following problem: Stinging Pesticides, Inc., provides scorpion control services, to residential and business customers in the El Paso area. The company recently raised its service price from $70 to $80 per annual treatment. As a result, sales fell to 37,500 from 52,500 treatments in the year earlier peri

Integrative Descriptions of Income Statements

Please see attachment for full problem description. Note: The blue cells are for data entry. Enter text in the T cells, formulas in the F cells, dollars or numbers in the $ cells Integrative The following income statement, statement of cash flows, and additional information are available for P

Beta Coefficients

I need help trying to solve the below problem. I understand that B is at more risk but not understanding what the formula would be to come up to the rM and beta coefficients of A and B. Security A has an expected return of 10.4 percent with a standard deviation of 15 percent, and a correlation with the market of 0.85. Securi

International Finance Market

What would happen in the market if an investor were compensated for diversifiable risk in addition to market risk? Why might accounting income not equal new cash flow?

Public Debt in the United States Security Issues

Suppose the public debt of the United States consisted of the following types of security issues (all figures in billions of dollars): Treasury bills $750 Savings bonds and notes 180 Government account series 1,500 Federal

Cost of preferred stocks

Taylor systems have just issued preferred stock. The stock has a 12% annual dividend and a $100 par value and was sold at $97.50 per share. In addition, flotation costs of $2.50 per share must be paid 1. Calculate the cost of the preferred stock 2. If the firm sells the preferred stock with a 10% annual dividend and nets $90.0

Hubbard's Pet Foods Financial Analysis

13-13. Hubbard's Pet Foods is financed 80% by common stock and 20% by bonds. The expected return on the common stock is 12% and the rate of interest on the bonds is 6%. Assuming that the bonds are default- risk- free, draw a graph that shows the expected return of Hubbard's common stock ( r E ) and the expected return on the pac