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Ratling [72]
3 years ago
12

Question 26 The Paper Mill is operating at full capacity. Assets, costs, and current liabilities vary directly with sales. The d

ividend payout ratio is constant. The firm has sales of $42,700, net income of $5,500, total assets of $48,900, current liabilities of $3,650, long-term debt of $18,100, owners' equity of $27,150, and dividends of $1,925. What is the external financing need if sales increase by 14 percent
Business
1 answer:
Lesechka [4]3 years ago
7 0

Answer:

$2,260

Explanation:

The computation is shown below:

Present sales revenue $42,700

Expected sales revenue ($42,700 × 114 ÷ 100) $48,678

Current profit margin ($5,500 ÷ $42,700 × 100) 12.88%

Payout Ratio:  

Dividends (a) $1,925

Net Income (b) $5,500

Payout Ratio (a ÷ b × 100) 35%

Retention Ratio (100% - 35%) 65%

due to 14% rise in sales Increase in retained earnings  ($48,678 × 12.88 ÷ 100 × 65 ÷ 100) $4,075.32

due to 14% rise in sales, Increase in assets  ([$48,678 - $42,700] × $48,900 ÷ $42,700) $6,846

due to 14% rise in sales, Increase in liabilities  ([$48,678 - $42,700] ×  $3,650 ÷ $42,700) $511

when sales rise by 14% External Financing Needed ($6,846 - $4,075.32 - $511) $2,260        

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Elise, an emergency medical technician renders aid to a participant in Forest Trail Marathon, an athletic event. Regarding a sui
viktelen [127]

Answer:

an applicable Good Samaritan statute.

Explanation:

Good Samaritan law protects those that act to help someone the perceive to be injured, ill, in peril, or incapacitated.

This law was put in place to protect bystanders that want to help a person that is injured. They will not be held liable in case of wrongful death or unintentional injury.

So the suit against Elise for negligence by the Forest Trail Marathon participant is not enforceable as she is immune from liability under the good samaritan statute.

4 0
3 years ago
A gift of money or goods from the groom or his kin to the bride's kin is referred to as:
Bond [772]
Bride wealth or bride price
6 0
3 years ago
why might a bank offer to make a loan to a consumer at a low initial rate which will increase after a set period of time?a. too
Whitepunk [10]

I believe the answer is: c. to make the loan look more attractive and competitive now

By offering it at low initial rate, the people who borrow money would experience low burden if they plan to return the money within short period of time. This would make them much more likely to obtain a loan, and it also would make the bank that create the loan program looks better compared to their competitors.

8 0
3 years ago
A firm purchased raw materials on account and paid for them within 30 days. The raw materials were used in manufacturing a finis
Nataly_w [17]

Answer: 130 days

Explanation:

The Cash Conversion Cycle is a measure that attempts to show how many days on average it takes a company to convert resources into cash.

It is calculated with the following formula,

= Days of Inventory Outstanding + Days of Sales Outstanding - Days of Payables Outstanding

Where,

Days of Inventory Outstanding is the amount of days it takes to convert inventory to sales

Days of Sales Outstanding is the amount of time it takes debtors to pay the company for goods they bought and,

Days of Payables Outstanding is the time it took the company to pay for the goods it bought

Plugging in the figures we have,

= 100 + 60 - 30

= 130 days

The firm's cash conversion cycle is 130 days.

7 0
3 years ago
2019: Ending inventory was overstated by $30,000 while depreciation expense was overstated by $24,000. 2020: Ending inventory wa
KIM [24]

Answer:

$25,000

Explanation:

The computation of the adjusted balance of retained earning is shown below:

Since the depreciation expense is overstated on 2019 which decreased the earnings so it would be added

Since the  depreciation expense is understated on 2020 which increased the earnings so it would be deducted

And, the ending inventory for 2020 is understated which decreased the earning so it would be added

Therefore, the adjusted balance is

= $24,000 - $4,000 + $5,000

= $25,000

3 0
3 years ago
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