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On December 31, Sulfur Corporation has the following data available: Net Income $140,000 Market price of one share of common sto

Lostsunrise [7]

Answer:

Earnings per share

= Net income - Preferred dividend

No of common stocks outstanding at the end

= $140,000 - $36,000

160,000

= $0.65 per share

Explanation:

Earnings per share is the ratio of profit available for distribution to common stock holders to number of common stocks outstanding. Profit available for distribution to common stock holders is the diffrence between net income and preferred dividend.

6 0

3 years ago

The Wod Chemical Company produces a chemical compound that is used as a lawn fertilizer. The compound can be produced at a rate

stiks02 [169]

Answer:

A. What is the optimal size of the production run for this particular compound?

first we have to determine the holding cost per unit = h = (22% + 012%) x ($3.5) = $1.19 per unit, per year

then we have to calculate the modified holding cost per year = h' = h x [1 / (D/P)] = $1.19 x [1 / (600,000/2,500,000)] = $0.9044 per unit, per year

now we have to substitute h for h' in the EOQ formula:

Q' = √ [(2 x S x D) / h'] = √ [(2 x $1,500 x 600,000) / $0.9044] = 44,612.44 ≈ 44,612 units

B. What proportion of each production cycle consists of uptime and what proportion consists of downtime?

Time between production runs = Q' / D = 44,612 / 600,000 = 0.07435333

Uptime = Q' / P = 44,612 / 2,500,000 = 0.0178448

Downtime = total time - uptime = 0.07435333 - 0.0178448 = 0.05650853

uptime = 0.0178448 / 0.07435333 = 24% of total time

downtime = 0.05650853 / 0.07435333 = 76% of total time

C. What is the average annual cost of holding and setup attributed to this item? If the compound sells for $3.90 per pound, what is the annual profit the company is realizing from this item?

average annual holding cost and setup costs = (AD/Q') + (h'Q'/2) = [($1,500 x 600,000) / 44,612] + [($0.9044 x 44,612) / 2] = $40,144

profit per unit = $3.90 - $3.50 = $0.40 per pound

total annual profit = ($0.40 x 600,000) - $40,144 = $199,856

4 0

3 years ago

Which of the following is true about the leveraging effect? Interest on debt can be deducted from pre-tax income, resulting in a

pav-90 [236]

Interest on debt is a tax-deductible expense, which means that it can reduce a firm’s taxable income and tax obligation

Answer: Option 2.

Explanation:

The leveraging effect is explained in terms of the returns of the company in terms of the equity. It measures the returns that a company or an organisation will get because of the capital that it has employed in various places and the returns that it will get for the company.

It also measures the returns of the company in terms of the cost of the debt of the company. The leverage effect is the difference between Return on Equity and Return on Capital employed.

7 0

2 years ago

The difference between the situational interview and the behavioral description interview is that a. the situational interview i

Aneli [31]

Answer:

A. the situational interview is hypothetical, while the behavioral description interview is based upon actual experience

Explanation:

8 0

3 years ago

Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices and

drek231 [11]

Answer:

Olive Limited

1) Internal Control Weaknesses: Richard Palm is just an accounting clerk and obviously there is a lack of qualification for him to single-handedly complete his work without supervision. He handles the whole processes of identifying source documents, the accounts involved, and their correctness, preparing the journal, posting to the ledgers, and leger accounts reconciliation. This shows that there is no segregation of duties. There is no personnel that authorizes or reviews Richard's accounting processes. He engages in self-review (reconciliation) of his work.

2) The risks associated with Richard's process are:

a) Richard lacks the required professional experience and qualification to handle most of his work alone. Thus, the risk of misstatement of financial statement elements is high.

b) Since Richard works without appropriate supervision, there is an increased risk of fraudulent behaviors. Richard could post fictitious invoices to the accounting records.

c) Without separation of duties, a single individual handles a transaction from the beginning to the end. This does not augur well for internal controls, which can be easily compromised.

d) Designated managers should be required to authorize certain types of transactions to add an extra layer of responsibility to accounting records. This also proves that transactions have been seen, analyzed, and approved by appropriate authorities. The requirement that large payments and expenses be approved by specific managers stop unscrupulous employees from making large fraudulent transactions with company funds, for example.

e) Richard also self-reviews his work. Thus, it may be difficult for him to identify errors of misstatement. An invoice could be posted more than once in the accounting records without being identified.

Explanation:

Internal controls are business processes that provide reasonable assurance so that several key business objectives are met, processes are operating efficiently, the financial reporting is reliable, and that the business is in compliance with applicable regulations and internal procedures.

Weaknesses occur when there is an absence of internal controls or the controls are not being operated as specified or the control objectives are not being achieved. When any of these are prevalent, risks arise. The risks may lead to intentional and unintentional financial statement misstatements or fraudulent practices.

7 0

3 years ago

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