Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Problem
Below are current year financial statements for two companies in the same industries and direct competitors. Both companies have been in operation approximately the same length of time.
Company A
Company B
Balance Sheet
Cash
31,000
16,000
Accounts receivable (net)
29,000
24,000
Inventory
87,000
Property and equipment, net
125,000
394,000
Other assets
79,000
298,000
Total assets
351,000
761,000
Current liabilities
91,000
47,000
Long-term debt (5% interest)
62,000
58,000
Capital stock ($5 par)
145,000
505,000
Contributed capital in excess of par
18,000
103,000
Retained earnings
35,000
48,000
Total liabilities and stockholders' equity
Income Statement
Sales revenue (1/3 of sales on credit)
452,000
799,000
Cost of goods sold
(250,000)
(396,000)
Expenses (including interest and taxes)
(161,000)
(308,000)
Net income
41,000
95,000
Selected data from prior year
33,000
81,000
42,000
110,000
375,000
Long-term debt
65,000
70,000
Other data
Market price per share at end of current year
$16
$13
Average income tax rate
25%
Dividends declared and paid in current year
22,000
88,000
Required:
1) Prepare a schedule reflecting a ratio analysis of each company. Compute all ratios from the module for which you have enough data.
2) If an investor were considering an investment in one of these companies, which would you recommend based on this data? Explain your response.
Selling and administrative expenses budget
Consider the issue of limitation on deduction of personal losses of capital assets (such as stock trading) to $3,000 per year. What effect does that limitation have on wealth distribution and day trading?
Assume that the quantity demanded at the price calculated in part a is only 600 units. Illustrate what are the full costs of the globe, and what is the price with a 25 percent markup?
On Jan 5, 2011, the company determined that the copyright would expire at the end of 2016. Explain how much should the co. record as amortization expense for copyright for 2011?
Fill in the data in the above chart to find out how much additional profit could the company have generated in 2010 if it had made optimal decisions at split-off?
Explain to Wendy at least 4 key controls she must establish to protect herself against fraud. You should state specific internal control principles and relate your answer to her hair salon business.
Compute the depreciation expense for year 2011 on the building using the straight-line method, assuming a 15-year life and a $25,650 salvage value.
A government accounts for inventory on the purchases basis. Why must it offset its year end inventory asset balance with an entry to nonspendable fund balance?
Calculating Additional Finance Requirements and Average Collection Period and what amount will this increase in the average collection period increase the financing needed by the company over the next year?
BBX records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2011, the fair value of the bonds was $370,000 as determined by their market value on the NYSE. Create the journal entry t..
To record the purchase of direct materials, the general ledger would include illustrate what entry to the Materials Price Variance Account
Illustrate what is the company's total tax liability to both jurisdictions for each of the two alternative transfer pricing scenarios?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd