Answer:
The target stock price in one year is $264.75
Explanation:
We first calculate the ROE as below
ROE= Earnings / Book value of Equity
ROE= $948,600 / $6,200,000
ROE= 0.153
The payout ratio is:
b= Dividend / Net income
b = $493,272 / $948,600
b = 0.52
So the sustainable growth rate is:
g = ROE * (1-b)
g = 0.153 * (1-0.52)
g = 0.153 * 0.48
g = 0.07344
The earning in the first year are
EPS1 = $948,600 / 100,000 * (1 + 0.07344)
EPS1 = $9.486 * 1.07344
EPS1 = $10.1827
According to the benchmark PE ratio, the target stock price in one year is
Price = EPS1 * 26
Price = $10.1827 * 26
Price = $264.75
Answer:
Dr Salaries Payable $3000
Dr Salaries Expense $3600
Cr Cash $6600
Explanation:
Preparation of the entries to record the $6600 payment of salaries in January of the following year.
Based on the information given Appropriate journal entries to record the $6600 payment of salaries in January of the following year will be:
Dr Salaries Payable $3000
Dr Salaries Expense $3600
($6600-$3000)
Cr Cash $6600
(To record payment of salaries)
Answer:
carrying value after 2 years = $967.64
Explanation:
the journal entry to record the purchase of the bond:
Dr Investment in bonds 1,000
Dr Premium on investment in bonds 41.60
Cr Cash 1,041.60
Assuming a straight line amortization, the yearly amortization = $41.60 / 9 years = $4.62 per year
carrying value at moment of purchase = $958.40
carrying value after 1 year = $963.02
carrying value after 2 years = $967.64
Answer: $2100
Explanation:
From the question, we are informed that Oakley Company does not ring up sales taxes separately on the cash register and that the total receipts for February amounted to $32,100 and the sales tax rate is 7%.
The amount that must be remitted to the state for February's sales taxes will be:
= $32,100/(1+7%) × 7%
= $32100/(1 + 0.07) × 0.07
= $32100/1.07 × 0.07
= $2100
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