If you are using a direct quote from a source, you need to put those words in quotation marks when you are borrowing:

West Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $75,000 from the bank with a 3-

ale4655 [162]

Answer:

b. The ratio decreased

Explanation:

The current ratio is a financial performance measure that compares current assets to current liabilities, hence, in ascertaining the impact of the short-term borrowing on the current ratio, we would compute the current ratio before and after having taken the short term loan as shown thus"

current ratio=current assets/current liabilities

Before borrowing:

current ratio=$375,000/$150,000

current ratio=2.50

After borrowing:

current ratio=$375,000/($150,000+$75000)

current ratio=1.67(it has declined from earlier 2.50 to 1.67)

4 0

3 years ago

St. Kilda Enterprises produces parts for the electronics industry. The production manager and cost analyst reviewed the accounts

SOVA2 [1]

Answer:

a. Budgeted production cost for next month is $ 487,900

b Total production cost per unit for the previous month - $ 31.16 per unit

Total production cost per unit for the next month - $ 30.02 per unit

Explanation:

Computation for production cost for previous month

Variable manufacturing overhead $ 48,000

Direct Labor $ 187,500

Direct materials $ 92,500

Total variable costs $ 328,000

Fixed manufacturing overhead $ 61,500

Total manufacturing costs $ 391,500

No of units produced 12,500

Variable cost per unit ( $ 328,000 / 12,500) $ 26.24 per unit

Fixed cost per unit $ 4,92 per unit

Total production cost per unit for previous month $ 31.16 per unit

Computation of total production cost for next month

Variable production costs per unit $ 26.24 per unit

Budgeted production 16,250 units

Total variable production costs for next month

$ 26.24 per unit * 16,250 units $ 426,400

Add: Fixed production costs $ 61,500

Total production costs for next month $ 487,900

Computation or per unit cost for next month

Total production cost/ No of units budgeted

$ 487,900/ 16,250 = $ 30.02 per unit

6 0

4 years ago

The Evanec Company's next expected dividend, D1, is $3.95; its growth rate is 4%; and its common stock now sells for $37.00. New

Trava [24]

Answer:

rs=14.68%

F=15%

re=16.56%

Explanation:

using the constant growth model:

$P0=\frac{D1}{rs-g}$

where P0 is the current stock price

D1 is the dividend expected at the end of the 1st year

rs is cost of retained earnings.

Rearranging to make rs subject of the formula:

$rs=\frac{D1}{P0}+ g$

$rs=\frac{3.95}{37}+ 0.04 = 0.1468$

if Evanec issues new stock, they will only net $31.45 down from $37 per share due to floatation costs. The difference, ie $37-$31.45 = $5.55 is due to floation costs.

The percentage floatation costs (F) are $\frac{5.55}{37} = 0.15 = 15%$

alternatively, one can recognise that $37(1-F)=31.45$ and F = 15%

Cost of new common stock re is calculated as follows:

$re=\frac{D1}{P0(1-F)}+ g$

$re=\frac{3.95}{37(1-0.15)}+ 0.04 = 0.1656 = 16.56%$

6 0

3 years ago

Sheri and Jake Woodhouse have one daughter, Emma, who is 16 years old. They also have taken in Emma's friend, Harriet, who has l

vfiekz [6]

Answer:

A

Explanation:

Harriet isnt their official child nor their relative.

4 0

4 years ago

This year Randy paid $28,900 of interest on his residence. (Randy borrowed $462,000 to buy his residence, and it is currently wo

Romashka [77]

Answer:

a. Interest Deductible = $31,100

b. Interest Deductible = $28,900

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

This year Randy paid $28,900 of interest on his residence. (Randy borrowed $462,000 to buy his residence, and it is currently worth $512,000.) Randy also paid $2,800 of interest on his car loan and $4,650 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?

a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.

Interest Deductible $.......

b. Randy had no investment income this year, and his AGI is $75,000.

Interest Deducttible $.......

The explanation of the anwer is now given as follows:

a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.

Randy may choose to deduct the interest of $28,900 on his residence as an itemized deduction.

The $2,800 of interest on his car loan is a nondeductible personal interest.

The $2,200 interest income received can be regarded as an investment income.

The $4,500 margin interest to his stockbroke is likely investment interest. But since Randy has only $2,200 interest income, his deduction is limited to the $2,200.

Therefore, we have:

Interest Deductible = Interest on his residence + $2,200 = $28,900 + $2,200 = $31,100

b. Randy had no investment income this year, and his AGI is $75,000.

Since there is no investment income, Randy can only dedcut the interest of $28,900 on his residence based on the explanation in part a above.

Therefore, we have:

Interest Deductible = $28,900

4 0

3 years ago