Answer:
A. $340 million
B. $40 million
Explanation:
A. Calculation for the amount that would appear in that statement for operating income
Sales revenue $2,200
Less: Cost of goods sold ($1,440)
Selling expense ($215)
General and administrative expense ($205)
Operating income $340 million
Therefore the amount that would appear in that statement for operating income will be $340 million
B. Calculation for the amount that would appear in that statement for non operating income
Interest expense $45
Less Gain on sale of investments $85
Non-operating income $40 million
Therefore the amount that would appear in that statement for nonoperating income will be $40 million
The total goods available for sale for the period is computed as follows:
Inventory, beg (200 @ $10) ----------------------------------------$2,000
1st Purchase (350 @ $15) ---------------------------------------------5,250
2nd Purchase (450 @ $20) ------------------------------------------9,000
3rd Purchase (100 @ $25) -------------------------------------------2,500
Total Goods Available for Sale -----------------------------------$18,750
(a) In computing the Ending Inventory and Cost of Goods Sold using FIFO method:
Total Goods Available for Sale ---------------------------------- $18,750
Less: Ending Inventory* -------------------------------------------- 4,900
Cost of Goods Sold --------------------------------------------------$13,850
*Ending Inventory
Inventory, beg ---------------------------------------------------------- 200
Total Purchases -------------------------------------------------------- 900
Total Available Units ------------------------------------------------- 1,100
Less: Units Sold ------------------------------------------------------- 880
Inventory, end --------------------------------------------------------- 220
Cost of Ending Inventory
100 × $25 = $2,500
120 × $20 = 2,400
220 $4,900
(b) In computing the Ending Inventory and Cost of Goods Sold using LIFO method:
Total Goods Available for Sale ---------------------------------- $18,750
Less: Ending Inventory* -------------------------------------------- 2,300
Cost of Goods Sold --------------------------------------------------$16,450
*Ending Inventory
Inventory, beg ---------------------------------------------------------- 200
Total Purchases -------------------------------------------------------- 900
Total Available Units ------------------------------------------------- 1,100
Less: Units Sold ------------------------------------------------------- 880
Inventory, end --------------------------------------------------------- 220
Cost of Ending Inventory
100 × $20 = $2,000
120 × $15 = 300
220 $2,300
(c) The Gross Margin for FIFO and LIFO
FIFO LIFO
Sales (880 @ $40) ------------------------$35,200 -------------------$35,200
Cost of Goods Sold ---------------------- 13,850 -------------------- 16,450
Gross Margin --------------------------------$21,350 ------------------- $18,750
Answer:
27.84
Explanation:
In order to find the price(value of the stock) after 4 years, we must have the growth rate to reach that level. In this question the growth rate will be identified first by the given information.
DATA
ROE = 26%
Plow back ratio = 0.20
Dividend this year = Do = $2.5
Rate of return = 14%
Time period = 4 years
Solution
growth rate = ROE x plow back ratio
growth rate = 26% * 0.2
growth rate = 5.2%
Dividend next year D1 = Do x (1-plowback ratio)
D1 = 2.5 x (1-0.2)
D1 = $2
Value of stock now Po = D1/(return - growth rate)
Value of stock now Po = 2/(0.14-0.052)
Value of stock now Po = $22.73
Value of stock in 4 years = Po * (1+growth rate)^4
Value of stock in 4 years = 22.73 * (1+0.052)^4
Value of stock in 4 years = $27.84
Answer:
Ans. Bond A =$20,800; Bond B =$55,125; Bond C =$69,068.29
Explanation:
Hello, First, we have to find the price of the bond, or in other words what is the percentage of its nominal rate that will match its face value, that is , for bond A (zero coupon, yield=4%, 1 year) $20,000, for bond B (zero coupon, yield=5%, 2 years) $50,000, and bond C (coupon=6%, yield=5.5%, 3 year) $70,000. The equation is as follows.
For the first 2 bonds, the math is as follows
For Bond C, remember that this is a coupon bond so we have to find the present value of this instrument by using the following equation.
So, the amount in Bond value for each one that will match each debt is:
Bond A = 20000/0.961538462=$20,800
Bond B = 50000/0.907029478=$55,125
Bond C = 70000/1.013489667=$69,068.29
Best of luck.