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3 years ago

The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:

Business

1 answer:

Simora [160]3 years ago

5 0

Answer:

Patrick Corporation Group

a. The amount of total assets is:

= $1,544,000.

b. The amount of total stockholders' equity that should be reported is:

= $1,136,000.

Explanation:

a) Data and Calculations:

BALANCE SHEETS December 31, 2017

Patrick Sean Consolidated

Cash $70,000 $70,000 $140,000

Accounts receivable (net) 146,000 38,000 184,000

Inventories 100,000 46,000 168,000

Plant and equipment (net) 622,000 262,000 884,000

Investment in Sean 470,000 - -

Goodwill 168,000

Total assets $1,414,000 $424,000 $1,544,000

Accounts payable 176,000 90,000 266,000

Long-term debt 102,000 40,000 142,000

Common stock ($10 par) 340,000 64,000 340,000

Additional paid-in capital 14,000

Retained earnings 796,000 216,000 796,000

Total liabilities and

shareholders' equity $1,414,000 $424,000 $1,544,000

b) Total stockholders' equity after consolidation is calculated as:

Common stock ($10 par) 340,000

Retained earnings 796,000

Total equity = $1,136,000

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a. Futuere Value = $19,245.86

b. Futuere Value = $3,060.86

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Explanation:

Note: The data in the question are merged. They are therefore sorted before answering the question as follows:

Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

a. $900 per year for 12 years at 10%. $ 19,245.85

b. $450 per year for 6 years at 5%. $ 3,060.86

c. $200 per year for 6 years at 0%. $

d. Rework parts a, b, and c assuming they are annuities due.

Future value of $900 per year for 12 years at 10%: $ 21,170.43

Future value of $450 per year for 6 years at 5%: $ 3,213.90

Future value of $200 per year for 6 years at 0%: $

Explanation of the answer is now provided as follows:

The formula for calculating the Future Value (FV) of an Ordinary Annuity given as follows:

FV = M * (((1 + r)^n - 1) / r) ................................. (1)

Where,

FV = Future value of the amount =?

M = Annuity payment

r = Annual interest rate

n = number of periods years

This formula is now applied as follows:

a. $900 per year for 12 years at 10%. $ 19,245.85

Therefore, we have:

FV = ?

M = $900

r = 10%, or 0.10

n = 12

Substituting the values into equation (1), we have:

FV = $900 * (((1 + 0.10)^12 - 1) / 0.10)

FV = $900 * 21.38428376721

FV = $19,245.855390489

Rounding the nearest cent, we have:

FV = 19,245.86

b. $450 per year for 6 years at 5%. $ 3,060.86

Therefore, we have:

FV = ?

M = $450

r = 5%, or 0.05

n = 6

Substituting the values into equation (1), we have:

FV = $450 * (((1 + 0.05)^6 - 1) / 0.05)

FV = $450 * 6.8019128125

FV = $3,060.860765625

Rounding the nearest cent, we have:

FV = $3,060.86

c. $200 per year for 6 years at 0%. $

Therefore, we have:

FV = ?

M = $200

r = 0%, or 0

n = 6

Substituting the values into equation (1), we have:

FV = $200 * (((1 + 0)^6 - 1) / 0)

FV = $200 * ((1^6 - 1) / 0)

FV = $200 * ((1 - 1) / 0)

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The formula for calculating the Future Value (FV) of an Annuity Due is given as follows:

FV = M * (((1 + r)^n - 1) / r) * (1 + r) ................................. (2)

Where,

FV = Future value

M = Annuity payment

r = Annual interest rate

n = number of periods years

This formula is now applied as follows:

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Therefore, we have:

FV = ?

M = $900

r = 10%, or 0.10

n = 12

Substituting the values into equation (2), we have:

FV = $900 * (((1 + 0.10)^12 - 1) / 0.10) * (1 + 0.10)

FV = $900 * 21.38428376721 * 1.10

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Rounding the nearest cent, we have:

FV = $2,1170.44

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Therefore, we have:

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FV = $3,213.90380390625

Rounding the nearest cent, we have:

FV = $3,213.90

d-3. Future value of $200 per year for 6 years at 0%: $

Therefore, we have:

FV = ?

M = $200

r = 0%, or 0

n = 6

Substituting the values into equation (2), we have:

FV = $200 * (((1 + 0)^6 - 1) / 0) * (1 + 0)

FV = $200 * ((1^6 - 1) / 0) * 1

FV = $200 * ((1 - 1) / 0) * 1

FV = $200 * (0 / 0) * 1

FV = $200 * 0 * 1

FV = $0

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