Reference no: EM133189716
Question 1 - Product Cost Markup Percentage - Apex Lighting Inc. produces and sells lighting fixtures. An entry light has a total cost of $64 per unit, of which $32 is product cost and $32 is selling and administrative expenses. In addition, the total cost of $64 is made up of $44 variable cost and $20 fixed cost. The desired profit is $12 per unit.
Determine the markup percentage on product cost. Round the answer to nearest whole number.
Question 2 - The following items are reported on a company's balance sheet:
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Cash
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$500,200
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Marketable securities
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390,800
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Accounts receivable (net)
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510,400
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Inventory
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161,700
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Accounts payable
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539,000
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Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.
Question 3 - A project is estimated to cost $186,846 and provide annual net cash flows of $38,000 for six years.
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Present Value of an Annuity of $1 at Compound Interest
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Year
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6%
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10%
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12%
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15%
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20%
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1
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0.943
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0.909
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0.893
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0.870
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0.833
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2
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1.833
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1.736
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1.690
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1.626
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1.528
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3
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2.673
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2.487
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2.402
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2.283
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2.106
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4
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3.465
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3.170
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3.037
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2.855
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2.589
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5
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4.212
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3.791
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3.605
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3.352
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2.991
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6
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4.917
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4.355
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4.111
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3.784
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3.326
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7
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5.582
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4.868
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4.564
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4.160
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3.605
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8
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6.210
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5.335
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4.968
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4.487
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3.837
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9
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6.802
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5.759
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5.328
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4.772
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4.031
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10
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7.360
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6.145
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5.650
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5.019
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4.192
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Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.
Question 4 - The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:
a. If sales for the current year were $655,200 and accounts receivable decreased by $47,200 during the year, what was the amount of cash received from customers?
b. If income tax expense for the current year was $53,200 and income tax payable decreased by $6,800 during the year, what was the amount of cash payments for income taxes?
c. Briefly explain why the cash received from customers in part (a) is different from sales.
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