A temporary association organized to perform a specific task requiring a large amount of capital is known as a(n)

This information is available for the Automotive and Other Operations Divisions of General Motors Corporation for 2006. General

Paraphin [41]

Answer:

A. Inventory turnover ratio = 5.927

B. Current ratio = 0.95

C. Current ratio after adjusting for the LIFO reserve = 0.97

Explanation:

Requirement A

We know,

Inventory turnover ratio = Cost of goods sold ÷ Average inventory

Given,

Cost of goods sold = 164,682

Average inventory = Beginning inventory + Ending inventory

Average inventory = $13,862 + $13,921

Average inventory = $27,783

Putting the values into the formula, we will get

Inventory turnover ratio = Cost of goods sold ÷ Average inventory

Inventory turnover ratio = $164,682 ÷ $27,783

Inventory turnover ratio = 5.927

We know,

Days in inventory = $365 ÷ $5.927

Days in inventory = 61.6 days

Requirement B

We know,

Current ratio = Current asset ÷ Current liabilities

Given,

Current asset = $64,131

Current liabilities = $67,822

Putting the values into the formula, we can get

Current ratio = Current asset ÷ Current liabilities

Current ratio = $64,131 ÷ $67,822

Current ratio = 0.95

We know,

The current ratio shows us how a company pays its current liabilities.

We assume the inventory is reported in the current asset using the LIFO method.

Requirement C

We know,

Current ratio after adjusting for the LIFO reserve = (Current asset + LIFO reserve) ÷ Current liabilities.

Given,

Current asset = $64,131

LIFO reserve = 1,508

Current liabilities = $67,822

Putting the values into the formula, we can get

Current ratio after adjusting for the LIFO reserve = (Current asset + LIFO reserve) ÷ Current liabilities

Current ratio after adjusting for the LIFO reserve = ($64,131 + 1,508) ÷ $67,822

Current ratio after adjusting for the LIFO reserve = 65,639 ÷ $67,822 = 0.97

Current ratio after adjusting for the LIFO reserve = 0.97

8 0

3 years ago

To realize his passion,Alex recently opened Original Tunes,Inc. ,a small state of the art recording studio in Nashville,TN.He pr

melamori03 [73]

Answer:

a. True

Explanation:

Indeed, we could rightly say the statement is true by remembering the four key factors of production (business):

capital (wealth)
labor
resources
entrepreneur.

Labor is part of the list of important factors and political freedom allows the entrepreneur to sucessfully manage business activities.

7 0

3 years ago

Tangshan Mining is considering issuing long-term debt. The debt would have a 30 year maturity and a 6 percent coupon rate and ma

Anon25 [30]

Answer:

After tax cost of debt is 4.85%

Explanation:

The starting to computing the after tax cost of debt is to calculate the yield to maturity on the bond .

The yield to maturity on the bond can be computed using the rate formula in excel.

=rate(nper,pmt,-pv,fv)

nper is the time to maturity of 30 years multiplied by 2 since the bond is paying interest on semi-annual basis

pmt is the semi-annual interest receivable by investor which 6.0%/2*$1000=$30

pv is the current market price :$1000*98% =$980 (100-2%),1% deducted for discount,1% for issue cost

fv is the face value of $1000

=rate(60,30,-980,1000)

rate=3.07%

The 3.07% is the semi-annual YTM, whereas the annual YTM 3.07% *2=6.14%

After tax cost of debt=YTM*(1-0.21)

=6.14%*(1-0.21)

=4.85%

5 0

3 years ago

Tammy's take-home pay is $800 a month. 7% of her take-home pay is spent on her cell phone bill. how much is tammy's monthly cell

ioda

Pretty sure its $56. Hope that helps

3 0

3 years ago

Read 2 more answers

Process Costing using First-in-First Out (FIFO) Crone Corporation uses the FIFO method in its processing costing system. The fol

shutvik [7]

Answer:

Cost of ending inventory= $8,520.6

Total cost of units transferred out=$99,863

Explanation:

Cost of ending inventory

Cost of items of inventory = cost per equivalent unit × No of units

Cost of items of inventory = ($9.50×330) + ($20.40 × 264)= $8,520.6

Total cost of units transferred out

The FIFO method of valuation of working in progress separates the units transferred out into opening inventory and fully worked.

The fully worked represents the units of inventory started and completed in the sames period.

The cost of units transferred out is the sum of h opening inventory and he fully worked. This done below:

Opening inventory = ($9.50 × 360) + ($20.40×140)= 6276

Transferred of fully worked = $(9.50 +$20.40) × 3,130= 93,587

Total cost of units transferred out = (6276 +93587)= $99,863

4 0

3 years ago