An analyst gathers the following information about Meyer, Inc.: Meyer has 1,000 shares of 8% cumulative preferred stock outstanding, with a par value of $100 and liquidation value of $110. Meyer has 20,000 shares of common stock outstanding, with a par value of $20. Meyer had retained earnings at the beginning of the year of $5,000,000. Net income for the year was $70,000. This year, for the first time in its history, Meyer paid no dividends on preferred or common stock.What is the book value per share of Mayer's common stock?

Answers

Answer 1
Answer:

Answer:

common stock book value: 273.5 dollars

Explanation:

(equity - preferred stock) / outstanding shares

In this case:

(common stock + RE)  divide over shares outstanding

20,000 shares x $ 20 = 400,000

Retained Earnings:

5,000,000 + 70,000 = 5,070,000

Total Common Equity: 5,470,000

Common stock: 20,000

5,470,000 / 20,000 = 273.5

Answer 2
Answer:

Final answer:

The book value per share of Meyer's common stock is $253.5. This is calculated by dividing the total equity ($5,070,000) by the number of common shares outstanding (20,000).

Explanation:

The book value per share is the value of a company's equity divided by the total number of common shares outstanding. It is a financial ratio that investors use to assess whether a company's stock is overpriced or underpriced.

In this case, the total equity of Meyer, Inc. is calculated by adding its retained earnings to its net income for the year. This totals to $5,070,000. Since there are 20,000 shares of common stock, the book value per share of Meyer's common stock would be $5,070,000 divided by 20,000, which equals to $253.5.

This represents the intrinsic value of a company, which could be significantly different from its market price depending on numerous factors such as the company's earnings potential and risk profile.

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You overhear a group of your co-workers laughing at some crude jokes about a few customers. Which of the following would you most likely do?

Answers

Answer: Tell your manager about this offensive behavior.

Explanation:

If I overhear a group of your co-workers laughing at some crude jokes about a few customers, the most likely thing for me to do will be to inform my manager about this offensive behavior.

Customers are vital to every business and should be treated right, without the customers, there isn't any business at all. Therefore, I'll inform my manager so that he'll have an idea of what is going on and then call them to order and explain to them that customers should be treated right and respected.

You buy one Home Depot June 60 call contract and one June 60 put contract. The call premium is $5 and the put premium is $3. Your maximum loss from this position could be a. $300. b. $800. c. None of the options are correct. d. $200. $500.

Answers

Answer:

b. $800

Explanation:

The calculation of maximum loss from this position is shown below:-

Maximum Loss from this position = (Assume figure × Call premium) + (Assume figure × Put premium)

= (100 × $5) + (100 × $3)

= $500 + $300

= $800

Therefore for computing the maximum loss from this position we simply applied the above formula.

A cafeteria buys muffins daily. Demand varies Uniformly between 30 and 50 muffins per day. The cafeteria pays $.20 per muffin and charges $.80 per muffin. Unsold muffins are discarded at the end of the day. A) Find the optimal stocking level and the stock-out risk for that quantity.

Answers

Answer:

The optimal stocking level is 45 muffins.

Explanation:

First we have to calculate the Overage cost Co = Purchase price - Salvage value = $0.2 - 0 = $0.2

Then the Underage cost Cu = Selling price - Purchase price =$0.80 - $0.2 = $0.60

Service level = Cu / (Cu + Co) = $0.60/($0.60+$0.2) = $0.75

Hence, optimal stocking level = Minimum demand + Service level *(Maximum demand - Minimum demand)

optimal stocking level = 30 + 0.75*(50-30) = 45

The optimal stocking level is 45 muffins.

Optimal stocking level = 68.75 Muffins

Determine proper classification (LO11-1) Analysis of an income statement, balance sheet, and additional information from the accounting records of Gadgets, Inc., reveals the following items. Required: Select the section of the statement of cash flows in which each of these items would be reported: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.1. Purchase of a patent.
2. Depreciation expense
3. Issuance of a note payable
4. Increase in inventory

Answers

Answer:

Patent-investing activity

depreciation expense-operating activity

issuance of note payable-financing activity

Increase in inventory-operating activity

Explanation:

The purchase of patent as intangible asset is reported as an investing activity item as an outflow of cash from the business.

Depreciation expense is meant to added to net income  in arriving at the net cash flows from operating activities

Issuance of a note payable is a financing item under the financing activities' segment of the cash flow as an inflow.

Increase in inventory is increase in net working capital which is deducted as an operating activity item .

Answer:

1. Purchase of a patent - Investing activities

2. Depreciation expense - Operating activities

3. Issuance of a note payable - Financing activity

4. Increase in inventory - Operating activity

Explanation:

Operating activity of cash flows include cash inflows and cash outflows from day to day business activities. This includes cash flows use from ongoing business activities.

Investing activity of cash flows includes cash inflows and cash outflows from investments of the business. This includes purchase of assets, sale of assets, investment in securities.

Financing activity of cash flows include cash inflows and cash outflows to fund the company. The activities that are incurred to fiance the business are classified as financing activity.

Soriano Company had net sales of $300,000 for the month (after returns and allowances of $1,500 and sales discounts of $3,250). Beginning inventory for the month was $60,000; purchases for the month were $175,000; and gross profit was 43%. What was the ending inventory for the month?

Answers

Answer:

Ending Inventory  $ 64,000

Explanation:

To define the final inventory of the company it's necessary to find the cost of good of the period.  

As the company had a 43% of gross profit, it means that for every dollar of sales we have 0,43 dollar of Gross Profit, with this value is possible to know the total cost of the goods sold during the period, that it's the difference between Sales Revenue and Gross Profit.  

Total Sales Revenue had to be the net value after returns and discounts as it's detailed.  

Income Statement  

Sales revenue        $ 300,000  

Cost of goods sold  -$ 171,000  

Gross Profit            $ 129,000 43%

Beginning Inventory  $ 60,000

Purchases                  $ 175,000

Cost of goods sold  -$ 171,000

Ending Inventory    $ 64,000

Blue is the owner of all of the shares of an S corporation, and Blue is considering receiving a salary of $110,000 from the business. She will pay the 7.65% FICA taxes on the salary, and the S corporation will pay the same amount of FICA tax. Blue reduces her salary to $50,000 and takes an additional $60,000 as a cash distribution. How would her Federal income tax liabilities change

Answers

Solution and Explanation:

The calculation of tax saving is shown below:

if B is getting the whole amount of salary the combined FICA tax liability of B and S Corp will be:

= $110000 multiply with 15.3 divide by 100

= $16830

If B is getting $50000 as salary the combined FICA tax liability of B and S corp will be

= $50000 multiply with 15.3 divide by 100

= $7650

thus the tax saving will be :

$16830 minus $7650

= $9180

The IRS can deem this arrangement unfit as make it mandatory for B to get the whole amount as salary. In that case, no change will take place in the tax liability.