Answer:
Gain from sale = $23,067
Explanation:
the none interest bearing note must be recorded at present value:
present value of the note = face value / (1 + r)ⁿ
- face value = $253,240
- r = 11%
- n = 3
PV = $253,240 / (1 + 11%)³ = $185,167
the note receivable must be recorded at $253,240, but $68,073 will be recorded as interest revenue.
the journal entry for the transaction should be:
January 1, 2020, sale of a building:
Dr Notes receivable 253,240
Dr Accumulated depreciation 101,140
Cr Building 263,240
Cr Interest revenue 68,073
Cr Gain from sale 23,067
Answer:
B. $129 million
Explanation:
bad debt expense for the year = balance in allowance at the end + write off - balance in allowance at the beggining
= $319 million + $137 million - $327 million
= $129 million
Therefore, Oracle Corporation report as bad debt expense for the year is $129 million.
Answer:
C. 11.05%
Explanation:
The computation of the cost of capital under the proposed leveraging is shown below;
cost of capital is
=Debt÷ value of leverged firm × ((unlevered cost of capital × (1 - tax rate))
=800 ÷ 1600 × ((13% + (13%) × (1 - 30%)))
= 11.0500%
hence, the cost of capital is 11.05%
Answer:
1. Operating plan.
2. Operating plan.
3. Financial plan.
4. Dividend policy.
5. B and C.
Explanation:
1. Operating plan: provides detailed implementation guidance for a firm's operations, as well as a forecast of the company's expected future free cash flows.
2. Operating plan: provides the inputs necessary for a risk management evaluation using sensitivity analysis, scenario analysis, or simulations.
3. Financial plan: Is based on knowledge of the amount of funds necessary to compensate the firm's shareholders, and the mix of debt and equity capital used to finance the firm.
4. Dividend policy: sets forth specific targets for cash or share distributions to the firm's shareholders.
Capital structure: describes specific targets for the mix of debt and equity used to finance a firm.
Financial planning can be defined as the process of estimating the amount of capital required for the smooth operations of the business and determine how to achieve the firm's set goals and objectives.
Hence, the following statements are true about financial planning;
I. Once a firm's forecasted financial statements are prepared, the firm must determine how much capital it will need to support these plans.
II. Management must monitor operations after implementing a financial plan to detect deviations from the plan and adjust accordingly.
Answer:
Net cash flow of the operating activities is $356,000
Explanation:
Wayne Company
Partial statement of Cash flow
For the year Ended December 31, 2021
Cash flow from operating activities:
Net Income $265,000
<em />
<em>Adjustment to reconcile net income to net </em>
<em>cash provided by operating activities</em>
Depreciation expenses $45,000
Loss on sale of equipment $8,000
Decrease in accounts receivable $15,000
Decrease in prepaid expenses $6,000
Increase in accounts payable <u>$17,000</u> <u>$91,000</u>
Net cash provided by operating activities <u>$356,000</u>
