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3 years ago

The following information is available from the current period financial statements:

Business

1 answer:

ArbitrLikvidat [17]3 years ago

5 0

Answer:

The correct answer is option (a).

Explanation:

According to the scenario, the computation for given data are as follows:

Net cash flow = Net income + Depreciation expense - Increase in accounts receivable - Decrease in accounts payable

Net cash flow = $165,000 + $28,000 - $16,000 - $21,000

= $193,000 - $37,000

= $156,000

Hence, the net cash flow from operating activities using the indirect method is $156,000.

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Income statement data for Huffman Pharmaceuticals are provided below. Income Statements 12/31/201712/31/2016 Sales Revenue$598,0

koban [17]

Answer:

Huffman Pharmaceuticals

The percentage that should be assigned to Gross Profit, using trend analysis, is:

= 42%.

Explanation:

a) Data and Calculations:

Income Statements 12/31/2017 12/31/2016

Sales Revenue $598,000 $724,000

Cost of Goods Sold 337,000 427,000

Gross Profit 261,000 297,000

Operating Expenses 137,000 146,000

Operating Income 124,000 151,000

Other Income (Expense) 60,000 23,000

Income before Tax 184,000 174,000

Income Tax Expense 71,000 76,000

Net Income $113,000 $98,000

Income Statements 12/31/2017 12/31/2016

Sales Revenue $598,000 $724,000

Cost of Goods Sold 337,000 427,000

Gross Profit 261,000 297,000

Ratio of Gross profit to

Sales Revenue

2017 = $261,000/$598,000 * 100 = 43.65% = 44%

2016 = $297,000/$724,000 * 100 = 41%

Average Gross profit ratio for the two years = 42.5% (44 + 41)/2.

b) Huffman's trend analysis is the use of its past financial performance indices to predict its future financial performances. Past performances are expressed in percentages, forming the basis for predicting and comparing future performances of an entity.

6 0

2 years ago

The receiving department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leas

stepladder [879]

Answer:

Calculating the cost of each activity,

Unloading = $ 80,100

Counting = $ 37,500

Inspecting = $54,450

Explanation:

Given:

Unloading lease = $15,000 per year

Fuel for the forklift = $3,600 per year

Maintenance for the forklift = $1,500 per year

Inspection uses some special testing equipment that has depreciation of $1,200 per year

Operating cost = $750.

Receiving employees average salary = $50,000 per year

Salaries; 3 × 50,000 = 150,000

Unloading salary = 40% × 150,000 = 60,000

Counting salary = 25% × 150,000 = 37,500

Inspecting salary = 35% × 150,000 = 52,500

Unloading Counting Inspection

Equipment 15,000 1,200

Fuel 3,600

Operation cost 1,500 750

Labor 60,000 37,500 52,500

Total cost 80,100 37,500 54,450

6 0

3 years ago

Suppose that $2500 is placed in a savings account at an annual rate of 5%, compounded quarterly. Assuming that no withdrawals ar

babymother [125]

Answer:

number of periods = 8 years.

Explanation:

We know,

Future Value = Present value × $(1 + r)^{n}$

Here,

Present value = PV = $2,500

Future value = FV = $3,500

Interest rate (Compounding) = 5% = 0.05

We have to determine how many years (Periods) it will take, n = ?

Putting the values into the above formula,

$3,500 = $2,500 × $(1 + 0.05)^{n}$

or, $(1 + 0.05)^{n}$ = $3,500 ÷ $2,500

or, n log 1.05 = 1.4

or, n × 0.17609 = 1.4

or, n = 1.4 ÷ 0.17609

Therefore, number of years = 7.95 or 8 years.

5 0

3 years ago

On June 30, Sharper Corporation’s stockholders' equity section of its balance sheet appears as follows before any stock dividend

Stolb23 [73]

Answer:

Sharper Corporation's Stockholders' Equity Section of Balance Sheet:

Common Stock:

Authorized Capital 120,000, $10 par value $0

Issued capital 90,000 at $10 par = $900,000

APIC = $400,000

Retained Earnings = $310,000

Total Stockholders' Equity = $1,610,000

2 Number of shares outstanding after the dividend distribution is 90,000 shares.

Explanation:

1. The dividend per share was calculated as follows:

50% of $10 = $5 per share

Total dividends = $5 x 90,000 = $450,000.

2. The Retained Earnings changed from $760,000 to $310,000 ($760,000 - $450,000). Dividends are paid out of retained earnings.

3. The number of shares outstanding after the distribution of dividends did not change. It could change if there were a stock split or some shares were repurchased under Treasury Stock.

5 0

3 years ago

You are valuing the stock of Microsoft Corp. You estimate the fair value of the stock of $270. Currently the stock is trading at

Setler [38]

Answer: buy the stock

Explanation:

Fair value refers to the price of an asset that's determined by the buyer and the seller. It's the worth of an asset. The market value is the price an an asset is sold in the marketplace.

By comparing the fair value and the market price, one can know if to invest in a asset or not. Since the fair value is more than the market price, then the should be bought.

8 0

3 years ago