Sunday, 8 September 2013

The SGS Co. had \$131,000 in taxable income. Use the rates from Table 2.3. Required: Calculate the company’s income taxes. (Do not include the dollar sign (\$). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations.) Income taxes \$

The SGS Co. had \$131,000 in taxable income. Use the rates from Table 2.3.

 Required: Calculate the company’s income taxes. (Do not include the dollar sign (\$). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations.)

 Income taxes \$

Arredondo, Inc., has current assets of \$2,290, net fixed assets of \$10,500, current liabilities of \$1,410, and long-term debt of \$4,100. Requirement 1: What is the value of the shareholders’ equity account for this firm? (Do not include the dollar sign (\$).) Shareholder's equity \$ Requirement 2: How much is net working capital? (Do not include the dollar sign (\$).) Net working capital \$

Arredondo, Inc., has current assets of \$2,290, net fixed assets of \$10,500, current liabilities of \$1,410, and long-term debt of \$4,100.

 Requirement 1: What is the value of the shareholders’ equity account for this firm? (Do not include the dollar sign (\$).)

 Shareholder's equity \$

 Requirement 2: How much is net working capital? (Do not include the dollar sign (\$).)

 Net working capital \$

Lifeline, Inc., has sales of \$593,000, costs of \$265,000, depreciation expense of \$67,000, interest expense of \$34,000, and a tax rate of 35 percent. Required: What is the net income for this firm? (Do not include the dollar sign (\$).) Net income \$

Lifeline, Inc., has sales of \$593,000, costs of \$265,000, depreciation expense of \$67,000, interest expense of \$34,000, and a tax rate of 35 percent.

 Required: What is the net income for this firm? (Do not include the dollar sign (\$).)

 Net income \$

Lifeline, Inc., has sales of \$593,000, costs of \$265,000, depreciation expense of \$67,000, interest expense of \$34,000, and a tax rate of 35 percent. The firm paid out \$40,000 in cash dividends. Required: What is the addition to retained earnings? (Do not include the dollar sign (\$).) Addition to retained earnings \$

Lifeline, Inc., has sales of \$593,000, costs of \$265,000, depreciation expense of \$67,000, interest expense of \$34,000, and a tax rate of 35 percent. The firm paid out \$40,000 in cash dividends.

 Required: What is the addition to retained earnings? (Do not include the dollar sign (\$).)

 Addition to retained earnings \$

Lifeline, Inc., has sales of \$588,000, costs of \$270,000, depreciation expense of \$69,500, interest expense of \$36,500, and a tax rate of 40 percent. The firm paid out \$37,500 in cash dividends and has 43,000 shares of common stock outstanding. Requirement 1: What are the earnings per share? (Do not include the dollar sign (\$). Round your answer to 2 decimal places (e.g., 32.16)) Earnings per share \$ Requirement 2: What are the dividends per share? (Do not include the dollar sign (\$). Round your answer to 2 decimal places (e.g., 32.16)) Dividends per share \$

Lifeline, Inc., has sales of \$588,000, costs of \$270,000, depreciation expense of \$69,500, interest expense of \$36,500, and a tax rate of 40 percent. The firm paid out \$37,500 in cash dividends and has 43,000 shares of common stock outstanding.

 Requirement 1: What are the earnings per share? (Do not include the dollar sign (\$). Round your answer to 2 decimal places (e.g., 32.16))

 Earnings per share \$

 Requirement 2: What are the dividends per share? (Do not include the dollar sign (\$). Round your answer to 2 decimal places (e.g., 32.16))

 Dividends per share \$

Klingon Widgets, Inc., purchased new cloaking machinery three years ago for \$4.2 million. The machinery can be sold to the Romulans today for \$6.4 million. Klingon’s current balance sheet shows net fixed assets of \$3.0 million, current liabilities of \$730,000, and net working capital of \$132,000. If all the current assets were liquidated today, the company would receive \$845,000 cash. Requirement 1: What is the book value of Klingon’s assets today? (Do not include the dollar sign (\$).Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Book value \$ Requirement 2: What is the market value? (Do not include the dollar sign (\$). Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Market value \$

Klingon Widgets, Inc., purchased new cloaking machinery three years ago for \$4.2 million. The machinery can be sold to the Romulans today for \$6.4 million. Klingon’s current balance sheet shows net fixed assets of \$3.0 million, current liabilities of \$730,000, and net working capital of \$132,000. If all the current assets were liquidated today, the company would receive \$845,000 cash.

 Requirement 1: What is the book value of Klingon’s assets today? (Do not include the dollar sign (\$).Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

 Book value \$

 Requirement 2: What is the market value? (Do not include the dollar sign (\$). Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

 Market value \$

Irrational, Inc., is obligated to pay its creditors \$8,550 during the year. Required: (a) What is the value of the shareholders’ equity if assets equal \$9,600? (Do not include the dollar sign (\$).) Shareholders’ equity \$ (b) What is the value of the shareholders’ equity if assets equal \$7,200? (Do not include the dollar sign (\$).) Shareholders’ equity \$

Irrational, Inc., is obligated to pay its creditors \$8,550 during the year.
 Required:
 (a) What is the value of the shareholders’ equity if assets equal \$9,600? (Do not include the dollar sign (\$).)

 Shareholders’ equity \$

 (b) What is the value of the shareholders’ equity if assets equal \$7,200? (Do not include the dollar sign (\$).)

 Shareholders’ equity \$

During the year, Belyk Paving Co. had sales of \$2,388,000. Cost of goods sold, administrative and selling expenses,

During the year, Belyk Paving Co. had sales of \$2,388,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were \$1,437,000, \$436,200, and \$491,200, respectively. In addition, the company had an interest expense of \$216,200 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)

 Required: (a) What is Belyk’s net income? (Do not include the dollar sign (\$). Negative amount should be indicated by a minus sign.)

 Net income \$

 (b) What is Belyk’s operating cash flow? (Do not include the dollar sign (\$).)

 Operating cash flow \$

Titan Football Manufacturing had the following operating results for 2010: sales = \$19,780; cost of goods

Titan Football Manufacturing had the following operating results for 2010: sales = \$19,780; cost of goods sold = \$13,980; depreciation expense = \$2,370; interest expense = \$345; dividends paid = \$550. At the beginning of the year, net fixed assets were \$13,800, current assets were \$2,940, and current liabilities were \$2,070. At the end of the year, net fixed assets were \$16,340, current assets were \$3,280, and current liabilities were \$2,160. The tax rate for 2010 was 35 percent.

 Requirement 1: What is net income for 2010? (Do not include the dollar sign (\$). Round your answer to the nearest whole dollar amount (e.g., 32))

 Net income \$

 Requirement 2: What is the operating cash flow during 2010? (Do not include the dollar sign (\$). Round your answer to the nearest whole dollar amount (e.g., 32))

 Operating cash flow \$

 Requirement 3: What is the cash flow from assets during 2010? (Do not include the dollar sign (\$). Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar amount (e.g., 32))

 Cash flow from assets \$

 Requirement 4: Assume no new debt was issued during the year.

 (a) What is the cash flow to creditors during 2010? (Do not include the dollar sign (\$).)

 Cash flow to creditors \$

 (b) What is the cash flow to stockholders during 2010? (Do not include the dollar sign (\$). Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar amount (e.g., 32))

 Cash flow to stockholders \$

Graffiti Advertising, Inc., reported the following financial statements for the last two years.

Graffiti Advertising, Inc., reported the following financial statements for the last two years.

 2010 Income Statement Sales \$ 572,200 Costs of goods sold 273,955 Selling & administrative 124,719 Depreciation 54,562 EBIT \$ 118,964 Interest 19,604 EBT \$ 99,360 Taxes 39,744 Net income \$ 59,616 Dividends \$ 11,000 Addition to retained earnings \$ 48,616

 GRAFFITI ADVERTISING, INC. Balance Sheet as of December 31, 2009 Cash \$ 13,460 Accounts payable \$ 9,490 Accounts receivable 18,980 Notes payable 14,494 Inventory 13,808 Current liabilities 23,984 Current assets \$ 46,248 Long-term debt \$ 135,680 Net fixed assets \$ 344,846 Owner's equity \$ 231,430 Total assets \$ 391,094 Total  liabilities and owners’ Equity \$ 391,094

 GRAFFITI ADVERTISING, INC. Balance Sheet as of December 31, 2010 Cash \$ 14,446 Accounts payable \$ 10,526 Accounts receivable 21,085 Notes payable 16,480 Inventory 22,768 Current liabilities 27,006 Current assets \$ 58,299 Long-term debt \$ 153,400 Net fixed assets \$ 406,297 Owner's equity \$ 284,190 Total assets \$ 464,596 Total liabilities and owners’ Equity \$ 464,596

 Requirement 1: Calculate the operating cash flow. (Do not include the dollar sign (\$).)

 Operating cash flow \$

 Requirement 2: Calculate the change in net working capital. (Do not include the dollar sign (\$).)

 Change in net working capital \$

 Requirement 3: Calculate the net capital spending. (Do not include the dollar sign (\$).)

 Net capital spending \$

 Requirement 4: Calculate the cash flow from assets. (Do not include the dollar sign (\$). Negative amount should be indicated by a minus sign.)

 Cash flow from assets \$

 Requirement 5: Calculate the cash flow to creditors. (Do not include the dollar sign (\$).)

 Cash flow to creditors \$

 Requirement 6: Calculate the cash flow to stockholders. (Do not include the dollar sign (\$). Negative amount should be indicated by a minus sign.)

 Cash flow to stockholders \$

A sole proprietorship: provides limited liability for its owner. involves significant legal costs during the formation process. has an unlimited life. has its profits taxed as personal income. can generally raise significant capital from nonowner sources.

A sole proprietorship:
 provides limited liability for its owner. involves significant legal costs during the formation process. has an unlimited life. has its profits taxed as personal income. can generally raise significant capital from nonowner sources.