[SOLVED] Ritter Corporation’s accountants prepared the

> Wilma Bates is executive vice president of Mavis Industries Inc., a publicly held industrial corporation. She has just been elected to Gotham City’s council. Before assuming office, she asks you to explain the major differences in accounting and financia

> For each general fund transaction in items 1 through 12, select its appropriate recording next to letters A through O. A letter may be selected once, more than once, or not at all. Recording of Transactions A. Credit Revenues B. Debit Expenditures C

> After all noncash assets have been converted into cash in the liquidation of the Adam and Kay Partnership, the ledger contains the following account balances: Available cash should be distributed with $32,000 going to accounts payable and then $

> Governmental accounting gives substantial recognition to budgets, which are being recorded in the governmental unit’s accounts. Required: What is the purpose of a governmental accounting system, and why is the budget recorded in the accounts

> On the balance sheet, the net fixed assets (NFA) account is equal to the gross fixed assets (FA) account, which records the acquisition cost of fixed assets, minus the accumulated depreciation (AD) account, which records the total depreciation taken by t

> Imprudential, Inc., has an unfunded pension liability of $550 million that must be paid in 20 years. To assess the value of the firm’s stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 6.4 per

> Gordon Driving School’s 2014 balance sheet showed net fixed assets of $1.32 million, and the 2015 balance sheet showed net fixed assets of $1.51 million. The company’s 2015 income statement showed a depreciation expense of $137,000. What was the company’

> Barrett, Inc., has sales of $19,800, costs of $10,900, depreciation expense of $2,100, and interest expense of $1,250. If the tax rate is 40 percent, what is the operating cash flow, or OCF?

> You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account and $250 per month in a bond account. The return of the stock account is expected to be 11 percent per year, and the bond accoun

> In Problem 21, suppose the firm wishes to keep its debt–equity ratio constant. What is EFN now?

> Draw up an income statement and balance sheet for this company for 2014 and 2015.

> First Simple Bank pays 4.1 percent simple interest on its investment accounts. If First Complex Bank pays interest on its accounts compounded annually, what rate should the bank set if it wants to match First Simple Bank over an investment horizon of 10

> The discussion of EFN in the chapter implicitly assumed that the company was operating at full capacity. Often, this is not the case. For example, assume that Rosengarten was operating at 90 percent capacity. Full-capacity sales would be $1,000/.90 = $1,

> Consider the following abbreviated financial statements for Weston Enterprises: a. What is ownersâ equity for 2014 and 2015? b. What is the change in net working capital for 2015? c. In 2015, Weston Enterprises purchased $2,350 in new

> What is the future value in six years of $1,000 invested in an account with an APR of 7.5 percent, a. Compounded annually? b. Compounded semiannually? c. Compounded monthly? d. Compounded continuously? e. Why does the future value increase as the compoun

> The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expense

> Cusic Industries had the following operating results for 2015: sales 5 $20,300; cost of goods sold 5 $14,500; depreciation expense 5 $2,900; interest expense 5 $690; dividends paid 5 $660. At the beginning of the year, net fixed assets were $15,470, curr

> The discussion of EFN in the chapter implicitly assumed that the company was operating at full capacity. Often, this is not the case. For example, assume that Rosengarten was operating at 90 percent capacity. Full-capacity sales would be $1,000/.90 = $1,

> Shelton, Inc., has sales of $435,000, costs of $216,000, depreciation expense of $40,000, interest expense of $21,000, and a tax rate of 35 percent. What is the net income for the firm? Suppose the company paid out $30,000 in cash dividends. What is the

> In Problem 18, suppose Rainbow Umbrella Corp. paid out $34,000 in cash dividends. Is this possible? If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what was the change in the firm’s long-t

> One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per month. You will charge 1.1 percent per month interest on the overdue balance. If the current balance is $18,450, how long will

> The discussion of EFN in the chapter implicitly assumed that the company was operating at full capacity. Often, this is not the case. For example, assume that Rosengarten was operating at 90 percent capacity. Full-capacity sales would be $1,000/.90 = $1,

> During 2015, Rainbow Umbrella Corp. had sales of $590,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $455,000, $85,000, and $125,000, respectively. In addition, the company had an interest expense of $65,000

> Well-known financial writer Andrew Tobias argues that he can earn 177 percent per year buying wine by the case. Specifically, he assumes that he will consume one $10 bottle of fine Bordeaux per week for the next 12 weeks. He can either pay $10 per week o

> In addition to common- size financial statements, commonâbase year financial statements are often used. Commonâbase year financial statements are constructed by dividing the current year account value by the base year

> Corporation Growth has $82,500 in taxable income, and Corporation Income has $8,250,000 in taxable income. a. What is the tax bill for each firm? b. Suppose both firms have identified a new project that will increase taxable income by $10,000. How much

> First National Bank charges 10.3 percent compounded monthly on its business loans. First United Bank charges 10.5 percent compounded semiannually. As a potential borrower, to which bank would you go for a new loan?

> The DuPont identity presented in the chapter is commonly referred to as the three-factor DuPont identity. Another common way that the DuPont identity is expressed is the five-factor model, which is: Derive the five-factor DuPont identity (EBT is earnings

> Josipovich, Inc., is obligated to pay its creditors $11,300 very soon. a. What is the market value of the shareholders’ equity if assets have a market value of $12,400? b. What if assets equal $9,600?

> Compute the future value of $1,000 compounded annually for a. 10 years at 6 percent. b. 10 years at 12 percent. c. 20 years at 6 percent. d. Why is the interest earned in part (c) not twice the amount earned in part (a)?

> Find the APR, in each of the following cases: APR Number of Times Compounded EAR Semiannually 8.9% Monthly 18.8 Weekly 10.4 Infinite 13.6

> Panda Inc.’s net income for the most recent year was $9,620. The tax rate was 34 percent. The firm paid $2,380 in total interest expense and deducted $3,170 in depreciation expense. What was the company’s cash coverage ratio for the year?

> Given the following information for O’Hara Marine Co., calculate the depreciation expense: sales 5 $44,000; costs 5 $27,500; addition to retained earnings 5 $5,200; dividends paid 5 $1,670; interest expense 5 $1,850; tax rate 5 40 percent.