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PSYCHO15rus [73]
3 years ago
8

Builtrite had sales of $700,000 and cogs of $280,000. in addition, operating expenses were calculated at 25% of sales. builtrite

also received dividends of $40,000 and paid out common stock dividends of $25,000 to its stockholders. a long-term capital gain of $55,000 was realized during the year along with a capital loss of $70,000
Business
1 answer:
Leni [432]3 years ago
3 0

This is the presentation of the income statement of Builtrite in order to compute the net income:

Sales                                                                                   $700,000

Less: COGS                                                                        $280,000

Gross Profit                                                                         $420,000

Less: Operating expenses ($700,000 x 25%)    $175,000

          Dividends expense                                   $25,000

          Capital loss                                               $70,000    $270,000

Total                                                                                     $150,000

Add: Dividend income                                         $40,000

          Capital gain                                               $55,000    $95,000

Net income                                                                           $245,000

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Lark had net income for 2018 of S103,000. Lark had 38,000 shares of common stock outstanding at the beginning of the year and 44
Kryger [21]

Answer:

price earning ratio = 19.44 times

so correct option is c. 19.44

Explanation:

given data

net income =  $103,000

common stock outstanding beginning = 38,000 shares

common stock outstanding ending = 44,000 shares

preferred stock outstanding = 5,000 shares

paid preferred dividends = $29,000

common stock = $35.00 per share

market price preferred stock = $55.00 per share

to find out

Lark's price earnings ratio

solution

first we get here average no of equity share that is

average no of equity share = common stock outstanding beginning + common stock outstanding ending ÷ 2

average no of equity share = \frac{38000+44000}{2}

average no of equity share = 41000 share

and

earning per share will be here as

earning per share = ( net income - paid preferred dividends ) ÷ average no of equity share

earning per share =  \frac{103000-29000}{41000}

earning per share = $1.80

so here price earning ratio will be as

price earning ratio = \frac{market\ price\ common\ share}{earning\ per\ share}

price earning ratio = \frac{35}{1.80}

price earning ratio = 19.44 times

so correct option is c. 19.44

7 0
3 years ago
What will most likely cause a lender to deny credit?
8090 [49]

Answer:

A historic credit score of 300

Explanation:

A credit score is a numeric record that expresses the reliability of a borrower to repay loans. The credit score or credit rating is determined by, among other things, credit history, income level, and the individual's income to debt ratio.

Credit scores range between 300 and 850. 300 is the lowest and the poorest score. A score of 300 indicates that the borrower has a bad history of debt repayment. They are always late on repayments,  miss on installments, or have defaulted on loans. Lenders consider such persons as high-risk borrowers and are likely to deny them credit facilities.

7 0
2 years ago
Zinc, Inc. has 10,000 shares of $5 par, 5% preferred stock, and 5,000 shares of $10 par common stock issued and outstanding. If
Anna11 [10]

Answer:

A. 2500

Explanation:

10,000 shares x $5 x .05= 2500

8 0
3 years ago
Cardinal Industries purchased a generator that cost $11,000. It has an estimated life of five years and a residual value of $1,0
atroni [7]

Answer:

Correct answer is letter D, $11,000 cost, five-year life and $1,000 salvage value

Explanation:

To compute depreciation expense of an asset using straight-line method of depreciation, the information we needed is 3,

1. cost of an asset

2. life of an asset (in year)

3. residual value (if available)

<em>* residual value of an asset is to be determined by the company, some asset don't have scrap value assigned.</em>

<em />

<em>FORMULA </em>

<em>The difference between the cost of an asset and the expected residual value over the number of years it is expected to be useful.</em>

<em>(cost of an asset - residual value ) / life of an asset</em>

6 0
3 years ago
What is the maximum amount a firm should pay for a project that will return $15,000 annually for 5 years if the opportunity cost
vampirchik [111]

Answer:

The firm should pay $46907.57 for the given project.

Explanation:

Given information:

Return = $15000 annually

Time = 5 years

Opportunity cost = 18%

The formula for payment is

PV=R(\frac{1}{OC}-\frac{1}{OC(1+OC)^t})

where, R is return, OC is opportunity cost, t is time in years.

Substitute R=15000, t=5 and OC=0.18 in the above formula.

PV=15000(\frac{1}{0.18}-\frac{1}{0.18(1+0.18)^5})

PV=46907.5653141

PV\approx 46907.57

Therefore the firm should pay $46907.57 for the given project.

8 0
2 years ago
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