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3 years ago

If during the current year, liabilities of hayden travel decreased by $50,000 and owners' equity increased by $75,000, then:

1 answer:

3 0

The answer is "then assets increased during the year by $25,000".

liabilities of Hayden travel decreased by = $50,000
owners' equity increased by = $75,000
assets increased during the year = $75,000 - $50,000
= $25,000

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Provo, Inc., had revenues of $10 million, cash operating expenses of $5 million, and depreciation and amortization of $1 million

Sauron [17]

Provo's free cash flow for 2008 is $2,600,000

Income Statement

Revenue $10,000,000

Operating expenses - $5,000,000

Depreciation - $1,000,000

EBIT $4,000,000

Interest expenses - $0

Taxes - $1,600,000 (40% * $4,000,000)

Net Income $2,400,000

Depreciation +$1,000,000

Operating cash flow $3,400,000

Free cash flow = Operating Cash flow - Purchase of equipment - Increase in Inventory

Free cash flow = $3,400,000 - $500,000 - $300,000

Free cash flow = $2,600,000

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5 0

3 years ago

Pesto Company possesses 80 percent of Salerno Company’s outstanding voting stock. Pesto uses the initial value method to account

hichkok12 [17]

Answer:

The retainesd earnings figure will increase by 464,400 dollars

Explanation:

Parent Company premium:

Premium: 750,000 / 20 years = 37,500 depreciation per year

unamortized portion at Dec 31th 2013:

amortized: 750,000 - 37,500 x 4 years = 150,000

unarmortized: 750,000 - 150,000 = 600,000

We must reverse 40% of the premium as is within the same company:

600,000 x 40% = 240,000

Subsidiary Discount:

16,500,000 X 40% = 6,600,000

Purchase at 96.6

Discount of 3.4 = 6,600,000 x 3.4% = 224,400

We must reverse this as is part of the same company.

In total retained earnings will increase by

240,000 + 224,400 = 464,400 dollars

8 0

3 years ago

Lloyd Inc. had sales of $200,000, a net income of //415,000, and the following balance sheet:

Tju [1.3M]

Answer:

The firm's new quick ratio is 2.9

Explanation:

The current ratio is calculated as

Current ratio = Current assets / Current liabilities

2.5 times = (Cash + receivables + Inventories ) / (Accounts payable + Other current liabilities)

2.5 = ($10,000 + $50,000 + Inventories) / $50,000

$60,000 + inventories = $125,000

Inventories = $65,000

Therefore, $85,000 worth of inventories were sold off.

If the funds generated are used to reduce the common equity that is by repurchasing the equity at book value.

Hence, the common equity amounts to $115,000

Calculating the ROE before the inventory is sold off:

ROE = Net income / Stockholder's equity

= $15,000 / $200,000

= 0.075 or 7.5%

Calculating the ROE after selling off the inventory:

ROE = $15,000 / $115,000

= 0.13 or 13%

The firm's new quick ratio is

Quick ratio = (Current assets - Inventories) / Current liabilities

= ($210,000 - $65,000) / $50,000

= 2.9

4 0

3 years ago

Which level of quality of information would eventually exist in the market for lemons assuming there was no way to gain assuranc

Neko [114]

The level of quality of information would eventually exist in the market for lemons assuming there was no way to gain assurance regarding the accuracy of the information would be low only.

In the given scenario we are given that there is no way to reassure ourselves that the information is accurate about the lemons in the existing market.

So we can not be a hundred percent sure that the information regarding the lemons existing in the market is correct.

As a result, if there was no method to verify the authenticity of the information, only low-quality information would eventually be available in the market for lemons.

Learn more about the market:

brainly.com/question/25754149

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3 0

1 year ago

If $13,000 is borrowed at 5.8% simple interest for 10 years, how much interest will be paid for the loan

Anni [7]

Answer:

7,540

Explanation:

Principle is $13,000

Rate is 5.8%

Time is 10 years

Therefore the simple interest can be calculated as follows

= principle × rate × time

= 13,000 × 5.8/100 × 10

= 13,000 × 0.058×10

= 7,540

Hence the simple interest is 7,540

4 0

3 years ago