Which budgeting approach requires justification for all expenditures

Suppose you invest semiannually for 25 years in an annuity that pays 5% interest, compounded semiannually. At the end of the 25

bonufazy [111]

Answer:

$354,500

Explanation:

First find the amount invested ie the Present Value as follows :

n = 25 × 2 = 50

i = 5%

P/yr = 2

Pmt = $0

Fv = $500,000

Pv = ?

Using a Financial Calculator to enter the amounts as above, the Present Value is $145,471

Total Interest = Future Value - Present Value

= $500,000 - $145,471

= $354,529

Thus interest is $354,500 (nearest hundred dollars).

7 0

3 years ago

The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Co

ale4655 [162]

Answer:

(a) the earnings per share = $3

(b) the price-earnings ratio = 8x

(c) the dividends per share = $0.25

(d) the dividend yield = 1.04%

Explanation:

Common Stock Outstanding = 5,250,000/25 = 210,000 shares

Preferred Stock Outstanding = 6,000,000/200 = 30,000 shares

Preferred Stock Dividend per share = $4

(a) Earnings Per Share

EPS = Net Income - Preferred Dividend

Common Stock Outstanding

EPS = 750,000 - (30,000 * 4)

210,000

EPS = 630,000

210,000

EPS = $3

(b) Price-Earnings Ratio

Market Price = $24

EPS = $3

P/E ratio = Market Price

EPS

P/E ratio = 24/3

P/E ratio = 8x

(c) Dividends Per Share

DPS = Total Dividends

Common Stock Outstanding

DPS = 52,500/210,000

DPS = $0.25

(d) Dividend Yield

DY = Dividend Per Share

Price

DY = 0.25/24

DY = 1.04%

6 0

3 years ago

Gilbert's expects its September sales to be 20% higher than its August sales of $150,000. Manufacturing costs were $100,000 in A

sveticcg [70]

Answer:

$61,500.

Explanation:

Given that,

Beginning cash balance on September 1 = $7,500

Cash receipts from credit sales made in August:

= $150,000 × 70%

= $105,000

Cash receipts from credit sales made in September:

= ($150,000 × 1.20) × 30%

= $54,000

Cash disbursements from purchases made in August:

= $100,000 × 75%

= $75,000

Cash disbursements from purchases made in September:

= $120,000 × 25%

= $30,000

Ending cash balance September 30:

= Beginning cash balance + Cash receipts from credit sales made in August + Cash receipts from credit sales made in September - Cash disbursements from purchases made in August - Cash disbursements from purchases made in September

= $7,500 + $105,000 + $54,000 - $75,000 - $30,000

= $61,500.

6 0

3 years ago

When auditing an entity's financial statements in accordance with government auditing standards (the yellow book), an auditor is

frez [133]

Wiley CPA Exam Review 2010, Auditing and Attestation explained this on an exam that the auditor should issue a report to comply with the law on internal control and also to document financial information. The yellow book becomes an auditing standard that provided uniformity on reports.

3 0

3 years ago

A company began the year with assets of $117,000, liabilities of $28,500, and stockholders' equity of $88,500. During the year a

algol [13]

Answer:

Change in liabilities = $33,300

Explanation

According to the accounting equation, assets is equal to liabilities + equity. And this equation can be re-written as:

Liabilities = assets - equity

Liabilities at the end of the period = assets at the end - equity at the end

Assets at the end= 117,000 + 56,700= 173,700

Equity at the end = 88,500 + 23,400 = 111,900

Liabilities at the end = 173,700 - 111,900=61800

Change in liabilities = Liabilities at the end - Liabilities at the beginning

Change in liabilities = 61,800 - 28,500= $33,300

8 0

3 years ago