Reference no: EM132008276
Problem - Van Jordan established an insurance agency on March 1, 20Y5, and completed the following transactions during March:
a. Opened a business bank account in the name of Jordan Insurance Inc., with a deposit of $50,000 in exchange for capital stock.
b. Borrowed $25,000 by issuing a note payable.
c. Received cash from fees earned, $28,000.
d. Paid rent on office and equipment for the month, $3,000.
e. Paid automobile expense for the month, $1,800, and miscellaneous expense, $900.
f. Paid office salaries, $4,200.
g. Paid interest on the note payable, $100.
h. Purchased land as a future building site, paying cash of $55,000.
i. Paid dividends, $4,000.
Instructions:
1. Indicate the effect of each transaction and the balances after each transaction, using the integrated financial statement framework.
2. Briefly explain why the stockholders' investments and revenues increased stockholders' equity, while dividends and expenses decreased stockholders' equity.
3. Prepare an income statement and retained earnings statement for March.
4. Prepare a balance sheet as of March 31, 2015.
5. Prepare a statement of cash flows for March.
|
What is the component cost of debt
: The bonds will mature in 20 years at which time they will have a face value of $1,000. What is the component cost of debt?
|
|
Estimate the intrinsic value of noe technologies stock
: You must estimate the intrinsic value of Noe Technologies' stock. The end-of-year free cash flow (FCF1) is expected to be $24.50 million.
|
|
Cash flows associated with the depreciation tax saving
: What is the depreciation each year and what are the cash flows associated with the depreciation tax saving?
|
|
What is the present value of myrna winnings
: Myrna Loy has just won a lottery. The payout is $76514 a year for 20 years. Myrna will receive the first payment in one year. If the appropriate discount rate.
|
|
Prepare an income statement and retained earnings statement
: Purchased land as a future building site, paying cash of $55,000. Prepare an income statement and retained earnings statement for March
|
|
What is the npv of the investment
: Muncy, Inc., is looking to add a new machine at a cost of $4, 133, 250. The company expects this equipment will lead to cash flows of $816, 822, $863.
|
|
Currency risk and interest rate risk
: What are they ways that international banks can use to protect themselves against risk such as currency risk and interest rate risk?
|
|
Compute the cost of retained earnings
: Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $1.50 per share.
|
|
Prove the answer with a simple income statement
: Fixed costs, S 15,000, Unit selling price is S 18.00, Unit variable cost is S3 .00. Prove the answer with a simple income statement.
|