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schepotkina [342]
3 years ago
9

Myriad Solutions, Inc. issued 12% bonds, dated January 1, with a face amount of $420 million on January 1, 2021, for $375,505,45

2. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity the market yield is 14%. Interest is paid semiannually on June 30 and December 31.
Required:
Complete the table below to calculate the amounts related to the bonds that Myriad would report in its financial. Indicate the amounts repotted on the financial statements below the year ending December 31.2021.
Business
2 answers:
faust18 [17]3 years ago
3 0

Calculation

Period   Cash Interest   Bond Interest    Discount     Carrying  

 End          paid            Expense         Amortization     Value

 01-Jan-21                                                            $375,505,452            

30-Jun-21 $25,200,000 $26,285,38 $1,085,382 $376,590,834

1-Dec-21 $25,200,000   $26,361,358  $1,161,358  $377,752,192

Total    $50,400,000     $52,646,740

Pani-rosa [81]3 years ago
3 0

Answer:

<u>In the cash flow statement </u>

<em><u>under financing operation:</u></em>

proceeds from bonds      375,505,452

<u><em>payment to bondholder</em></u>

420,000,000 x 6% x 2 = (50,400,000)

<u>in the income statement:</u>

<u><em>interest expense</em></u> for each payment:

26.285.381,64‬

<u>26.361.358,35</u>

total   52.646.739,99‬

<u>Balance sheet</u>

Bonds payable     420,000,000

Discount on BP  <u>  (42.247.808,01‬)</u>

Carrying Value        377,752,191.99

Explanation:

The cash flow will consider the proceeds and the coupon payment made during the year.

Income estamtent: will be the interest expense:

carrying value x market rate

375,505,452 x 0.14  x 1/2 = 26.285.381,64‬

cash proceed

420,000,000 x 0.12 x 1/2  =<u>     25,200,000    </u>

amortization                                1,085,381.64‬  

second interest payment

carrying value

375,505,452 + 1,085,381.64 = 376.590.833,64‬

interest expense

37590833.64 x 0.07 =         26.361.358,35

cash proceed

420,000,000 x 0.12 x 1/2  =<u>     25,200,000    </u>

amortization                              1.161.358,35

carrying value at the end of the year:

376,590,833.64 + 1,161,358.35 = 377.752.191,99

the difference withthe face value is the discount at year-end

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7 0
1 year ago
Vertis Corporation is interested in cutting the amount of time between when a customer places an order and when the order is com
morpeh [17]

Answer:

12

Explanation:

Computation for throughput time

Using this formula

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Let plug in the formula

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Throughput time=12

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3 years ago
P13–11 EPS calculations Southland Industries has $60,000 of 6% (annual interest) bonds outstanding, 1,500 shares of preferred st
777dan777 [17]

Answer:

$1.28

Explanation:

The computation of the earning per share is shown below:

As we know that

Earning per share = Net income ÷ Number of shares outstanding

where,

Net income is

Earning before interest and taxes      $24,600

Less: Interest

($60,000 × 6%)                                      - $3,600

Income before tax                                  $21,000

Less: tax for 40%                                    - $8,400

Earning after tax                                     $12,600

Less: Preference dividend

(1,500 shares × $5)                                  -$7,500

Income available                                       $5,100

So the earning per share is

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3 0
3 years ago
Damon Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows:
Shkiper50 [21]

Answer:

d. a $10,000 decrease.

Explanation:

The computation of the impact on the income is given below:

In case of making the product

= Direct material + direct labor + variable manufacturing overhead  + rented

= $100,000 + $160,000 + $60,000 + $10,000

= $330,000

And, in case of buying the product

= 20,000 × $17

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So there is a decrease of $10,000

8 0
3 years ago
The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. The company expects
romanna [79]

Answer:

present worth = $7380

Explanation:

given data

initial cash flow = $23,000

geometric gradient = 2%

interest rate i = 10% per year

time period = 5 year

solution

we get here present worth  cost that is

present worth = initial cash flow  × \frac{1-(\frac{1+g}{1+i})^t}{1-g}    ......................1

put here value and we get

present worth =  $23,000  × \frac{1-(\frac{1+0.02}{1+0.10})^5}{1-0.02}    

present worth = $23,000  × 0.32087

present worth = $7380

3 0
2 years ago
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