Reference no: EM13925812
Ben Pratt started a moving company on January 1, 2013. On March 1, 2013, Pratt borrowed cash from a local bank by issuing a one year $80,000 face value note with annual interest based on a 12 percent discount. During 2013, Pratt provided services for $65,400 cash.
Required:
Answer the following questions.
Record the events in T- accounts prior to answering the questions.
a. What is the amount of total liabilities on the December 31, 2013, balance sheet?
b. What is the amount of net income on the 2013 income statement?
c. What is the amount of cash flow from operating activities on the 2013 statement of cash flows?
d. Provide the general journal entries necessary to record issuing the note on March 1, 2013;Â recognizing accrued interest on December 31, 2013; and repaying the loan on February 28, 2014.
Determine your annualized return on the loan
: If you have a financial calculator or spreadsheet with an IRR function, determine the internal rate of return and annualize it to determine your annualized return on the loan.
|
Comparing full absorption and variable costing
: Consider the following information for Presidio Inc.'s most recent year of operations. Additional information for Presidio's most recent year of operations follows:
|
What is the geometric average returns on the stock
: You have observed the following returns on ABC's stocks over the last five years: ?3.3%, 9.4%, 12.3%, 13.6%, 2.3%? What is the geometric average returns on the stock over this five-year period.
|
Determine the internal rate of return
: If you have a financial calculator or spreadsheet, determine the internal rate of return and annualize it to determine the cost of borrowing.
|
What is the amount of total liabilities on the december
: What is the amount of total liabilities on the December 31, 2013, balance sheet?
|
Determine how much the bank should receive for selling
: All rates are continuously compounded. Use the Black model to determine how much the bank should receive for selling this call for every $1 million of notional principal.
|
Provide a brief summary of your research
: Discuss any ethical or practical considerations that might arise from this application of the concept. These might include (but are not limited to) environmental impact, safety concerns, or issues of effectiveness.
|
Calculate hawk contribution margin per unit
: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,100 birdhouses this year. 2. Without any calculations, determine Hawk's total contribution margin if the company breaks even. 3. Calculate Hawk's contribution margin per u..
|
Determine a fair price for the cap using the black model
: The notional principal is $10 million, and the payoff is based on 90-day LIBOR. Use the Black model to determine a fair price for the cap.
|