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Accounting and Finance Problems

1. In 2003, David Corp. acquired 15,000 shares of its own $1 par value common stock at $18 per share. In 2004, David issued 10,000 of these shares at $25 per share. David uses the cost method to account for its treasury stock transactions. What accounts and what amounts should David credit in 2004 to re

Product Cost Hierarchy

For the following list of costs, indicate by the appropriate letter which category of activities each cost applies to: unit level (U), batch level (B), product line (P), or facility support (F): 1. Machine fine-tuning adjustment cost (required after the production of each unit) 2. Salary of vice president of finance 3. Mach

Finance/Accounting : Cost-Volume-Profit

9. What is the basic C-V-P equation? What is a more detailed version of this equation? 10. What is the contribution margin, and why is it important for managers to know the contribution margins of their products? 11. How much will profits increase for every unit sold over the break-even point? 12. What is the maj

Cash Budget for Higgins and Griffin Financial Planners

Cash Budget for Higgins and Griffin Financial Planners Higgins and Griffin Financial Planners have forecasted revenue for the first six months of 2005 as shown on the following table: Month Nov. 2004 Dec-04 Jan-05 Feb Mar Apr May June Revenue $48,000.00 $45,000.00 $25,000.00 $27,000.00 $30,000.00 $38,000.00 $40,000.00

Finance and Decision-Making : Alternative Investments, Building Use and Marketing

7.5 Benson Enterprises is evaluating alternative uses for a three-story manufacturing and warehousing building that it has purchased for $225,000. The company can continue to rent the building to the present occupants for $12,000 per year. The present occupants have indicated an interest in staying in the building for at leas

LONG LIVED NONMONETARY ASSETS AND THEIR AMORTIZATION

Cleanburn Coal Co. purchased coal-leasing land that contains 800,000 tons of coal for $21,700,000. Soil test by geologist cost $35,250 for the purchased land, but test at other sites that yielded negative results cost $116,250. Clearburn uses the full-cost method for exploration cost (ie., the company's total exploration and tes

NONMONETARY ASSETS AND THEIR AMORTIZATION

Pemberton Corp. purchased a machine costing $300,000 that had an estimate useful life of six years and residual value of $18,000. The machine is expected to produce 3,525,000 units during its useful life, as follow: YEAR UNITS 1

Forward Rates and Arbitrage

1. Deriving the Forward Rate: Assume that annual interest rates in the U.S. are 4 percent, while interest rates in France are 6 percent. a. According to IRP, what should the forward rate premium or discount of the euro be? b. If the euro's spot rate is $1.10, what should the one-year forward rate of the euro be? 2. Co

Finance/ Accounting question

1. What are some examples of fixed and variable costs from your workplace? Which costs may have both variable and fixed components? How can this be resolved for analysis purposes? 2. When is it appropriate for companies to use activity-based costing? How might activity-based costing be used in your company? What are some diff

Accounting/Financial Markets Multiple Choice

1).Which of the following is not considered an acceptable inventory cost method according to GAAP? A) First in , First out (B) First in Last out (C) Last in Fist out (D) Average cost 2) The cost flow assumption selected by a company need not correspond to the actual physical movement of the company's merchandise A) True (B)

Financial Health of EBay

Please review the financial information provided, and give your recommendation of the financial health of eBay. Please explain your reasoning. I have uploaded the finances over the last 3 years to help in recommendation.

Stock valuation using DDM

The current price of ADM's stock, Po, is $20 and the company is expected to pay a $2.20 dividend next year. If the appropriate required rate of return for ADM's stock is 15 percent, what should be the price of the stock in one year, P-hat sub 1? Assume that the company has achieved constant growth.

Finance/ Accounting Problem

The following journal entries are from the books of Kara Elizabeth Company: a. Buildings 90,000 cash 35,000 Mortgage Payable 55,000 b. Cash 25,000 Capital Stock 25,000 c. Cash 40,000 Loan Payable 40,000 D. Salary Expense 12,000 Cash

The Best Manufacturing Company

The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. Cash flows are in $thousands, and the corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operating costs are income taxes are paid in cash, and all cash flows occur at

Finance Calculation : DuPont (Du Pont) Analysis

DuPont Analysis. See attached file for full problem description. The Fern Furniture Company, a manufacturer and wholesaler of high-quality home furnishings, has been experiencing low profitability in recent years. As a result, the board of directors has replaced the president of the firm with a new president, Helen Adams, who h

The C.V.P Equation

A company sells lawnmowers for $895 each. The variable cost per lawnmower is $520. The company's monthly fixed costs are $84,500. Using the C-V-P equation, compute the amount of profit the company will have for a month in which the company sells 375 lawnmowers.

What financial information does the current ratio measure?

Please help with the following problems. Provide at least 200 words in the solution. What financial information does the current ratio measure? When you calculate a current ratio, what does the calculated number mean? What is the difference between the current ratio and the quick ratio, and why do these differences matter in

Personal Financial Questions

1)Many financial planners recommend that you hold emergency reserve assets equal to ___ months of after tax income A)3-6 (B) 5-7(C) 7-12 (D)12-15 2)From a federal income tax perspective, interest on U.S Series EE bonds A) May be deferred until redemption (B) may be deferred until redemption and may be avoided if it is used

IBM Short Selling Stock

Assume that IBM stock is selling for $110 per share and that you short sell 200 shares of the stock. A) What would be your dollar return if the price of IBM stock drops to $95 per share? B) What would be your dollar return if the price of IBM stock increases to $120 per share? C) Is there a limit to your gains? Is there

Cost of Goods Sold & the Tax Gap; Trade & Cash Discounts; Ratios

Use the Library to go to the SBA (United States Government, Small Business Administration) web site. There is a vast amount of information available on this site. You are encouraged to spend some time there exploring the links within the site. Minimally, click on the link titled: "Financing Your Business". Read at least one of t

Business Growth and Finance

1. What is the sustainable growth rate of a firm with the following selected financial results? Sales $20,300 Earnings after taxes $1,015 Equity multiplier 2X Assets $10,150 Annual Dividend $406 a. 12% b. 8% c. 10% d. 6% 2. Stock and bond markets a. are independent of each other as to prevailing ra

Variable Cost and using Whats Best software

Illumina Inc. makes cardboard signs. The most popular signs they make are the Bronx, and Veterans, which require material and labor. They have a contract with Devon Publishing to make 1600 of the Bronx, which sell for $ .75 and require 20 ounces of paper and 5 minutes of labor. They plan on making 2000 of the Veterans, which sel

Amount changes on stock transactions

Given that Humphrey Dog Toys Inc.'s stock is currently selling for $50 a share, calculate the amount that Elmer D. will make, or lose, on each of the following transactions (assume that all transactions involve 100 shares of stock, and ignore brokerage commissions.) a. If Elmer sold the stock short at $50 per share and repu

Operating, Financial and Combined Leverage of ITC

Illinois Tool Company's (ITC) fixed operating costs are $1,260,000 and its variable cost ratio (ie variable costs as a fraction of sales) is 0.70. The firm has $3,000,000 in bonds outstanding at an interest rate of 8%. ITC has 30,000 shares of $5 preferred stock and 150,000 of common stock outstanding. ITC is in the 50%