Answer and Explanation:
The computation is shown below:
a. Current PE ratio is
For Pacific energy company
= Price ÷ Earnings
= ($967,000 ÷ 0.13) ÷ ($967,000)
= 7.69 times
For U.S Bluechips
= Price ÷ Earnings
= ($967,000 ÷ 0.13) ÷ ($967,000)
= 7.69 times
b. The new PE ratio is
= Price ÷ Earnings
= (($967,000 + $117,000) ÷ 0.13) ÷ ($967,000)
= 8.62 times
c. The new PE ratio is
= Price ÷ Earnings
= (($967,000 + $217,000) ÷ 0.13) ÷ ($967,000)
= 9.42 times
Answer and Explanation:
The computation is shown below;
a. The net income or loss for the year 2018 is
Sales $763,000
Less: COGS $462,000
Less: A&S expenses $103,000
Less: Depreciation $148,500
EBIT $49,500
Less: Interest $73,800
Taxable income -$24,300
Less: Taxes(22%) $0
Net income(loss) -$24,300
Net loss = $24,300
b. The operating cash flow is
OCF = EBIT + Depreciation - Taxes
= $49,500 + $148,500 - $0
= $198,000
Answer:
D Temporary differences reverse themselves in subsequent accounting periods, whereas permanent differences do not reverse.
Option C -Operating Cash Flow = Current Liabilities / Operating Cash Flow s not a correct way of calculating a liquidity ratio.
Liquidity ratios are a measure of a company's ability to settle its short-term payments. A company has the ability to quickly exchange its revenues and is using them to pay his obligations is dictated by its liquidity ratios. The potential to pay back debts and keep engaged on installments is simpler the better the ratio. Since this can vary by industry, and current ratio of 1.0 usually signals that a group's debt do not exceeding its liquid assets. In enterprises in which there is a quicker product changeover and/or shorter payment cycles, ratings below 1.0 may be acceptable.
Absolute liquidity ratio =(Cash + Marketable Securities)÷ Current Liability.
Learn more about Liquidity ratios here:
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Answer:
Equipment and notes payable
Explanation:
Since the equipment is purchased by signing the note payable which affected the two accounts i.e equipment and the note payable. In this, the cash transaction is not involved, so cash should not be considered
The journal entry would be
Equipment A/c Dr $10,000
To Notes payable $10,000
(Being the equipment is purchased by signing a note payable)
