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ser-zykov [4K]
2 years ago
5

A company had average total assets of $932,000. Its gross sales were $1,097,000 and its net sales were $965,000. The company's t

otal asset turnover equals:
Business
1 answer:
Alborosie2 years ago
3 0

Answer:

Total asset turnover is 1.035.

Explanation:

The total assets that the company had = $932000

Gross sales = $1097000

Net sales = $965000

The total asset turnover can be determined by dividing the net sales with average total assets. Here, the average total assets are $932000 and net sales is $965,000.  

Total asset turnover = net sales / average total assets

= 965000 / 932000

=1.035

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OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the
Sindrei [870]

Answer:

a. Interest expense to be recorded at December 31 at 11% is $330000.

b. Interest expense to be recorded at September 30 at 9% is $135000.

c. Interest expense to be recorded at October 31 at 10% is $200000.

d. Interest expense to be recorded at January 31 at 7% is $245000.

Explanation:

a.

The year end adjusting entry will be made on the accrual basis and will match that period's expenses with revenues. The note will pay interest at maturity however it will continue to accrue interest throughout its outstanding period evenly.

Considering year end to be on December 31 and 11% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.11 * 6/12 = $330000

b.

Considering year end to be on September 30 and 9% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.09 * 3/12 = $135000

c.

Considering year end to be on October 31 and 10% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.10 * 4/12 = $200000

d.

Considering year end to be on January 31 and 7% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.07 * 7/12 = $245000

3 0
3 years ago
Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s deb
QveST [7]

Answer: See explanation

Explanation:

a. What is the market value of Locomotive Corporation before and after the repurchase announcement?

Equity value = Debt value / Debt to equity ratio

= 3,300,000/0.3

= 11,000,000

Market value = Debt value + Equity value

= $3,300,000 + $11,000,000

= $14,300,000

b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan?

To solve this, we need to know the interest payment first which will be:

= $3,300,000 × 9%

= $3,300,000 × 0.09

= $297000

Return on equity will now be:

= (EBIT - interest) / Equity

= (1320000 - 297000) / 11000000

= 9.30%

c. What is the expected return on the equity of an otherwise identical all-equity firm?

This will be:

= Earnings before Interest / Unlevered firm value

= 1320000 / 14300000

= 9.23%

d. What is the expected return on the firm’s equity after the announcement of the stock repurchase plan?

This will be:

= 9.23% + 50% × (9.23% - 9%)

= 9.35%

5 0
3 years ago
How would you expect each of the following to affect the economy-wide demand for U.S. money (currency)? a. Competition among bro
Anna007 [38]

Answer:

Market interest rate is also known as nominal interest rate. The nominal interest rate is sum of real interest rate and inflation rate. Fed try to control the monetary condition and real interest rates by manipulating money supply. These interest rates also affect the demand of money in market.

Part (a)

When commission of brokers decreases then buying and selling of stocks becomes easier and cheaper and people would transact in more and more stocks which will decrease the demand of money as liquidity of stock has increased.

Part (b)  

When grocery store starts accepting credit cards then people would need to carry less cash and demand of money will decrease.

Part (c)

As financial investors are now worried about riskiness of stocks so they will decrease their investment in stocks and prefer holding more money so demand of money will increase.

5 0
3 years ago
How is email like a business letter? How is it different from a phone call?
Tanzania [10]

Answer:

an email is more like a online letter while a phone call is in voice in real time

5 0
3 years ago
Read 2 more answers
Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks
Colt1911 [192]

Answer:

Net income under absorption costing is $240,000

Explanation:

Sales   (825*$1075)                            $886,875

less variable costs

Variable production cost($375*825)  (309,375)

selling and admin. expense                ($95,000)

Contribution margin                             $482,500

less fixed costs:

fixed production cost                          ($107,500)

selling and admin. expense                ($135,000)

Net income                                           $240,000  

Net income under absorption was $25,000 more than the net income under the absorption costing, the difference is analyzed below:

Fixed product costs (1075-825)*$100=$25,000

That is the fixed production costs added to closing inventory under absorption method which was expensed under variable costing method

     

4 0
3 years ago
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