There are 5 questions in the question part and for each question write 2 paragraphs.

Ahnberg Corporation had 680,000 shares of common stock issued and outstanding at January 1. No common shares were issued during

liberstina [14]

Answer:

EPS is $2.9 per share

Diluted EPS is $1.54 per share

Explanation:

Basic Earning per share is calculated dividing Earning for the year excluding preferred dividend by weighted average number of shares.

Basic EPS = (Net Income - Preferred dividends) / Weighted Average numbers of share

Basic EPS = ($2,152,000 - $180,000) / 680,000 = $2.9 per share

Diluted earning per share is calculated by adjusting all the convertible share options or securities in the outstanding share.

Diluted EPS = (Net Income - Preferred dividends) / Diluted numbers of share

Diluted EPS = ($2,152,000 - $180,000) / ( 680,000 + 600,000 )

Diluted EPS = $1.54 per share

8 0

3 years ago

Tell me in your own words what differentiation and commoditization are. Please provide examples of each. Why do managers care ab

Furkat [3]

Answer:

Commoditization of a market means that the goods or services offered will be homogeneous. This means that they will be practically identical and customers will be indifferent when choosing one product or any other product because they are identical or very similar. E.g. think about gold, which is one of the most important commodities in the world. A consumer doesn't care if they are buying gold from Alaska, Canada, Brazil, etc., they are simply buying gold.

On the other hand, differentiation means that the products or services offered are heterogeneous or different. When products are differentiated, customers will buy them because they like them more than the competition. E.g. you buy Coke because you like it more than Pepsi or any other brand.

Some products will naturally tend to be commodities, e.g. agricultural products, but others go through a commoditization process that is not natural. E.g. banks offering homogeneous checking or savings account. The problem with commoditization happens when one company simply decides to offer something different. Before Amazon, internet retail was basically non-existent. But when Amazon came by, they decimated or virtually eliminated the major brick and mortar players. During many years Sears was the number 1 retailer in the world, then came Walmart. But after Amazon came, even Walmart's long term survival is doubtful and Sears, JC Penny, Toys R Us, Radio Shack, and many others are either extinct or about to become extinct. The new norm is online retailing now.

8 0

3 years ago

Exercise 6-4A Calculate inventory amounts when costs are rising (LO6-3) [The following information applies to the questions disp

VladimirAG [237]

Answer:

1. Ending inventory = $2,408; Cost of goods sold = $16,837; Sales revenue = $22,770; and Gross profit = $5,933.

2. Ending inventory = $2,094; Cost of goods sold = $17,151; Sales revenue = $22,770; and Gross profit = $5,619.

3. Ending inventory = $2,293; Cost of goods sold = $16,952; Sales revenue = $22,770; and Gross profit = $5,818.

Explanation:

Note: This question is not complete. The complete question is therefore presented before answering the question. See the attached pdf file for the complete question.

Explanation to the answer is now presented as follows:

1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

Note: See part 1 of the attached excel for the calculation of calculation of Cost of goods available for sale, Cost of goods sold, and Ending inventory using FIFO.

First In, First Out (FIFO) refers to an inventory accounting method in which inventory items purchased first are sold first, while the one that are purchased last are sold last.

In the attached excel file, since the inventory purchased on Oct. 6 is purchased last, the number of unit of inventory purchased on Oct. 6 sold is calculated by deducting the sum of the beginning inventory and inventory purchased before Oct. 6 from the total inventory sold as follows:

Number of unit of inventory purchased on Oct. 6 that are sold = Number of units sold - (Beginning inventory + Apr. 7 Purchases + Jul. 16 Purchases) = 414 - (45 + 125 + 195) = 49

Therefore, the number of ending inventory is obtained as follows:

Number of unit of ending inventory = Number of inventory purchased on Oct. 6 - Number of inventory purchased on Oct. 6 sold = 105 – 49 = 56

Sales revenue = Number of unit units of inventory sold for the entire year * Selling price per unit = 414 * $55 = $22,770

From the attached excel file, we have:

Cost of goods sold = $16,837

Ending inventory = $2,408

Therefore, we have:

Gross profit = Sales revenue - Cost of goods sold = $22,770 - $16,837 = $5,933

2. Using LIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

Note: See part 2 of the attached excel for the calculation of calculation of Cost of goods available for sale, Cost of goods sold, and Ending inventory using LIFO.

Last In, First Out (LIFO) refers to an inventory accounting method in which inventory items purchased last are sold first, while the one that are purchased first are sold last.

In the attached excel file, the number of unit of inventory purchased on April 7 that are sold and the ones remaining that are NOT sold that forms part of ending inventory are calculated as follows:

Number of unit of inventory purchased on April 7 that are sold = 414 – (195 + 105) = 114

Number of unit of inventory purchased on April 7 that are NOT sold = Number of unit of inventory purchased on April 7 - Number of unit of inventory purchased on April 7 that are sold = 125 – 114 = 11

Sales revenue = Number of unit units of inventory sold for the entire year * Selling price per unit = 414 * $55 = $22,770

From the attached excel file, we have:

Cost of goods sold = $17,151

Ending inventory = $2,094

Therefore, we have:

Gross profit = Sales revenue - Cost of goods sold = $22,770 - $17,151 = $5,619

3. Using weighted average cost, calculate ending inventory, cost of goods sold, sales revenue, and gross profit. (Round "Average Cost per unit" to 4 decimal places and all other answers to the nearest whole number.)

Note: See part 3 of the attached excel for the calculation of calculation of Cost of goods available for sale, Cost of goods sold, and Ending inventory using weighted average cost.

Weighted average cost method refers to a method of costing inventory in which the total cost of the goods available for sale is divided by the total number of units available for sales in order to obtain weighted average cost per unit.

In the attached excel file, weighted average cost per unit is therefore calculated and rounded to 4 decimal places as follows:

Weighted average cost per unit = $19,245 / 470 = $40.9468

Number of unit of ending inventory = Total number of units available for sales – Number of unit sold = 470 – 414 = 56

Sales revenue = Number of unit units of inventory sold for the entire year * Selling price per unit = 414 * $55 = $22,770

From the attached excel file, we have:

Cost of goods sold = $16,952

Ending inventory = $2,293

Therefore, we have:

Gross profit = Sales revenue - Cost of goods sold = $22,770 - $16,952 = $5,818

Download pdf

8 0

3 years ago

Katherine was working as a part of team in her film however due to project requirements she was sent to the client site to compl

pishuonlain [190]

Katherine would require skills of being able to work with confidence. At client's site, she must have highly polished managerial and observable skills. She must also realize that guidance should be seeked for important stuff.

6 0

3 years ago

Hazel Morrison, a mutual fund manager, has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%, and the mar

lianna [129]

Answer:

average beta of the new stocks to achieve the target required rate of return is 2.29

Explanation:

given data

Portfolio amount invested = $40,000,000

Beta = 1

Risk free rate = 4.25%

Market risk premium = 6%

Hazel expects = $60 million

expected return new investments = 13.00%

to find out

average beta of new stocks be to achieve the target required rate of return

solution

we will use here CAPM formula that is

Expected return = Risk free rate + Beta × Market risk premium .........1

put here value we get

13% = 4.25% + Beta × 6%

0.06 × Beta = 13% - 4.25%

Beta = 1.458

now we get Weighted beta that is express as

Weighted beta = weight of old stock in new portfolio × 1 + Weight of new stock in new portfolio × beta of new stock ..................2

put here value we get

1.458 = $\frac{40}{(40+22)} * 1 +\frac{22}{(22+22)} * debt$

solve it we get

beta = 2.29

so that average beta of the new stocks to achieve the target required rate of return is 2.29

8 0

3 years ago