![= CETTE Toatly capita (wwco] -Ico Accounts Payable - $230,000. EBITI-T Sterling Imaginary Products recently reported the foll](http://img.homeworklib.com/questions/504b5780-7599-11ea-920b-bf048777673d.png?x-oss-process=image/resize,w_560)
Homework Answers
Solution of Question-8
EBIT= Net Income + Taxes + Interest
= 900,000+ (900,000*0.40/(1-0.40))+200,000
= 900,000+ 600,000+200,000
= $ 1700,000
NOPAT= EBIT- Taxes+ Non cash Expenses
= 1700,000 - 600,000 + Nil
= $ 1100,000
Non-cash Expenses are not provided so taken as NIL.
Invested capital= Total Assets- Non- Interest Bearing Liabilities + Non- cash adjustments
= 7900,000 - ( 230,000+,170,000) + 0
= $ 7500,000
Interest Expenses= $ 200,000
After Tax Cost of Debt= 10%
before tax Cost of debt= 10*/(1-.40)
= 16.67%
Debt= Interest Expenses/ before tax cost of debt : = $ 1200,000
Total assets= Equity + Debt+ Current assets
7900,000 = Equity + 1200,000 + (230,000+170,000+120,000)
Equity = 7900,000-1720,000
Equity = $ 6180,000
Cost of Equity= Net profit/Shareholder's Equity
= 900,000/6180,000
= 14.56%
Weighted Average Cost of capital (WAAC) = %of Equity* cost of equity + % of debt* after tax cost of debt
= (6180/7380)*14.56 + 10*(1200/7380)
= 12.19 + 1.62
= 13.81%
EVA = NOPAT- Capital Charge
= 1100,000 - ( 7500,000*13.81%)
= $ 64250
So, EVA is $ 64250 which comes in option E of question 8
(Capital Charge= Invested Capital *WACC)
Note- Assuming Notes payable being a interest bearing liabilities thats why not excluded in Invested Capital)
-- I'm only allowed to do 1 question as per guidelines.
If u like my answer, please Up-vote as it will be motivating.
Add Answer to:
= CETTE Toatly capita (wwco] -Ico Accounts Payable - $230,000. EBITI-T Sterling Imaginary Products recently reported...
900.000-80,000 Use the following for questions 37-39 T Corp has provided their accounts in alphabetical order....
900.000-80,000 Use the following for questions 37-39 T Corp has provided their accounts in alphabetical order. Use these accounts to answer the following questions. Accounts payable $10,000 Accounts Receivable 15,000 Accumulated depreciation 80,000 Cash 18,000 Common stock 300,000 Depreciation expense 40,000 Dividends 30,000 Equipment 800,000 Deferred revenue 6,000 Notes payable 250,000 Rent expense 6,000 Retained earnings 63,000 Salaries expense 256,000 Service revenue 458,000 Supplies Supplies expense 1,800 - 37. $ 33200 Total current assets 38. $120.000 Book value of the...
*Specifically looking for help with t-accounts and question 4, thank you!!* As a recently hired accountant...
*Specifically looking for help with t-accounts and
question 4, thank you!!*
As a recently hired accountant for a small business, SMC, Inc.,
you are provided with last year’s balance sheet, income statement,
and post-closing trial balance to familiarize yourself with the
business.
You are also given the following information that summarizes the
business activity for the current year,2018
a.
Issued 10,000 additional shares of common stock for $25,000
cash on January 1st.
b.
Borrowed $10,000 on March 1, 2018, from...
Landsbury Inc. Balance Sheet December 31, 2016 Assets Liabilities and Stockholders’ Equity Cash $20,000 Accounts payable...
Landsbury Inc. Balance Sheet December 31, 2016 Assets Liabilities and Stockholders’ Equity Cash $20,000 Accounts payable $30,000 Accounts receivable 21,200 Notes payable (long-term) 41,000 Investments 32,000 Common stock 100,000 Plant assets (net) 81,000 Retained earnings 23,200 Land 40,000 $194,200 $194,200 Lansbury Inc. sold part of its debt investment portfolio for $15,000. This transaction resulted in a gain of $3,400 for the firm. The company classifies its investments as available-for-sale. 2. A tract of land was purchased for $18,000 cash. 3....
scenario SuperSports Inc.reported pretax financial income of $260,000 for the year 2016. Taxable income of SuperSports...
scenario SuperSports Inc.reported pretax financial income of $260,000 for the year 2016. Taxable income of SuperSports is however different from its pretax financial income because of the items given below. Depreciation deducted on the tax return is $40,000 greater than the depreciation charged on Income Statement. Estimated Warranties Expenses charged to Income Statement is $30,000 but Warranties expenses deductible on tax return are $20,000 $3,200 appear in the income statement of SuperSports as Fines and penalties paid. SuperSports received $...
Sherman Company reported the following financial statements for 2016 and 2017 E: (Click the icon to...
Sherman Company reported the following financial statements for 2016 and 2017 E: (Click the icon to view the income statement.) : (Click the icon to view the comparative balance sheet.) Read the requirements a. Compute the financing cash flows from new borrowing or payment of long-term notes payable. Sherman Company had only one long-term note payable transaction during the year (this long-term note payable is the only long-term liability that the company has). First, enter the formula and then compute...
Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as...
Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 2016 2015 Assets Cash and equivalents 14,000 15,000 Accounts receivable 30,000 35,000 33,070 29,000 Inventories $ 83,070 Total current assets $73,000 Net plant and equipment 50,000 46,000 Total assets $133,070 $119,000 Liabilities and Equity Accounts payable $10,500 9,000 Accruals 7,100 6,000 Notes payable 6,600 5,050 $ 24,200 20,050 Total current liabilities Long-term bonds 10,000 10,000 Total liabilities 34,200 30,050 Common stock...
Balance Sheets as of December 31 2016 2015 $ 14,000 1 Cash and equivalents Accounts receivable...
Balance Sheets as of December 31 2016 2015 $ 14,000 1 Cash and equivalents Accounts receivable Inventories 12,000 25,000 23,000 $71.705 60,000 48,000 $120,705 $108,000 30,000 27,705 Total current assets Net plant and equipment Total assets 49,000 Liabilities and Equity $ 10.9008,500 7,000 5.050 s 25,20020,550 20,000 s 45.200 40.550 40,000 27.450 $75.5055 67450 $108.000 Accounts payable 7.500 Notes payable 6.800 Total current liabilities Long-term bonds 20,000 Total liabilities Common stock (4,000 shares) Retained earnings 40,000 Common equity Total liabilities...
nix Wednesday TAX-4: Hanks Company The Hanks Company has the following income statement for the year...
nix Wednesday TAX-4: Hanks Company The Hanks Company has the following income statement for the year ended December 31, 2016: Subscription revenue Interest revenue on municipal bonds Total revenues $250,000 4.500 254,500 Expenses: Subscription costs Wages Rent expense Depreciation on equipment Insurance expense Total expenses Income before tax 120,000 30.000 15,000 45,000 8,000 218.000 36,500 Hanks Company has the following partially completed comparative balance sheets as of December 31: 2016 2015 $ 92,775 19.250 3,000 2,500 $ 10,000 19,250 2.800...
At December 31, 2019, the partial adjusted accounts for Ozark Ltd. included the following: Accounts payable...
At December 31, 2019, the partial adjusted accounts for Ozark Ltd. included the following: Accounts payable Accounts receivable Accumulated depr - Building Accumulated depr - Furniture AFDA Bank loan payable Building Cash Common shares Cost of goods sold (COGS) Dividends $40,000 $95,000 $35,000 $20,000 $9,000 $220,000 $150,000 $45,000 $38,000 $180,000 $10,000 Furniture Income tax expense Income taxes payable Insurance expense Inventory Land Prepaid expenses Retained earnings Salaries payable Unearned revenue Utilities $160,000 $4,000 $17,000 $6,000 $25,000 $370,000 $2,500 $? $3,000...
Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2016....
Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2016. Assume that all balance sheet items reflect account balances at December 31, 2016, and that all income statement items reflect activities that occurred during the year then ended. Interest expense $ 30,000 Paid-in capital 89,000 Accumulated depreciation 29,000 Notes payable (long-term) 283,000 Rent expense 70,000 Merchandise inventory 839,000 Accounts receivable 192,000 Depreciation expense 10,000 Land 124,000 Retained earnings 490,000 Cash 137,000 Cost of goods...
900.000-80,000 Use the following for questions 37-39 T Corp has provided their accounts in alphabetical order. Use these accounts to answer the following questions. Accounts payable $10,000 Accounts Receivable 15,000 Accumulated depreciation 80,000 Cash 18,000 Common stock 300,000 Depreciation expense 40,000 Dividends 30,000 Equipment 800,000 Deferred revenue 6,000 Notes payable 250,000 Rent expense 6,000 Retained earnings 63,000 Salaries expense 256,000 Service revenue 458,000 Supplies Supplies expense 1,800 - 37. $ 33200 Total current assets 38. $120.000 Book value of the...
*Specifically looking for help with t-accounts and
question 4, thank you!!*
As a recently hired accountant for a small business, SMC, Inc.,
you are provided with last year’s balance sheet, income statement,
and post-closing trial balance to familiarize yourself with the
business.
You are also given the following information that summarizes the
business activity for the current year,2018
a.
Issued 10,000 additional shares of common stock for $25,000
cash on January 1st.
b.
Borrowed $10,000 on March 1, 2018, from...
Sherman Company reported the following financial statements for 2016 and 2017 E: (Click the icon to view the income statement.) : (Click the icon to view the comparative balance sheet.) Read the requirements a. Compute the financing cash flows from new borrowing or payment of long-term notes payable. Sherman Company had only one long-term note payable transaction during the year (this long-term note payable is the only long-term liability that the company has). First, enter the formula and then compute...
Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 2016 2015 Assets Cash and equivalents 14,000 15,000 Accounts receivable 30,000 35,000 33,070 29,000 Inventories $ 83,070 Total current assets $73,000 Net plant and equipment 50,000 46,000 Total assets $133,070 $119,000 Liabilities and Equity Accounts payable $10,500 9,000 Accruals 7,100 6,000 Notes payable 6,600 5,050 $ 24,200 20,050 Total current liabilities Long-term bonds 10,000 10,000 Total liabilities 34,200 30,050 Common stock...
Balance Sheets as of December 31 2016 2015 $ 14,000 1 Cash and equivalents Accounts receivable Inventories 12,000 25,000 23,000 $71.705 60,000 48,000 $120,705 $108,000 30,000 27,705 Total current assets Net plant and equipment Total assets 49,000 Liabilities and Equity $ 10.9008,500 7,000 5.050 s 25,20020,550 20,000 s 45.200 40.550 40,000 27.450 $75.5055 67450 $108.000 Accounts payable 7.500 Notes payable 6.800 Total current liabilities Long-term bonds 20,000 Total liabilities Common stock (4,000 shares) Retained earnings 40,000 Common equity Total liabilities...
nix Wednesday TAX-4: Hanks Company The Hanks Company has the following income statement for the year ended December 31, 2016: Subscription revenue Interest revenue on municipal bonds Total revenues $250,000 4.500 254,500 Expenses: Subscription costs Wages Rent expense Depreciation on equipment Insurance expense Total expenses Income before tax 120,000 30.000 15,000 45,000 8,000 218.000 36,500 Hanks Company has the following partially completed comparative balance sheets as of December 31: 2016 2015 $ 92,775 19.250 3,000 2,500 $ 10,000 19,250 2.800...
At December 31, 2019, the partial adjusted accounts for Ozark Ltd. included the following: Accounts payable Accounts receivable Accumulated depr - Building Accumulated depr - Furniture AFDA Bank loan payable Building Cash Common shares Cost of goods sold (COGS) Dividends $40,000 $95,000 $35,000 $20,000 $9,000 $220,000 $150,000 $45,000 $38,000 $180,000 $10,000 Furniture Income tax expense Income taxes payable Insurance expense Inventory Land Prepaid expenses Retained earnings Salaries payable Unearned revenue Utilities $160,000 $4,000 $17,000 $6,000 $25,000 $370,000 $2,500 $? $3,000...
Most questions answered within 3 hours.
-
Question Three
Suppose you as project manager are using the Waterfall
development methodology on a large...
asked 1 minute from now -
Which statement is not true about welfare in Canada?
A.Benefits typically vary based on one's ability...
asked 30 minutes ago -
Please help me with FLOWCHART and UML diagram for class,
thank you!
#include <iostream>
#include <fstream>...
asked 1 hour ago -
3. Describe the “logic circuit” of the Lac operon. Which
proteins are bound or not to...
asked 1 hour ago -
Ayesha’s adjusted gross income is $60,000 in 2019. She donated a
piece of artwork with a...
asked 1 hour ago -
For Dijkstra’s shortest path algorithm:
a. Give the Big-O time for Dijkstra’s shortest path algorithm
and...
asked 1 hour ago -
Phosphorus violates the 'octet rule' in biological molecules,
forming more covalent bonds than expected based on...
asked 1 hour ago -
A 1.3 eV electron has a 10-4 probability of tunneling
through a 2.4 eV potential barrier....
asked 1 hour ago -
What is the one ingredient that is common to being successful
with all stakeholders?
profit
trust...
asked 1 hour ago -
Write an assembly language 32 bit program that reads in lines of
text by a .txt...
asked 1 hour ago -
what is the density ( in g/L) of hydrogen gas at 29 degrees C and a...
asked 2 hours ago -
5-6. You are considering three investment alternatives for some
spare cash: Old Reliable Corporation stock (A1),...
asked 1 hour ago