Answer:
The correct answer for option (a) is $515,000 and for option (b) is $560,000.
Explanation:
According to the scenario, the given data are as follows:
Earnings before depreciation and taxes = $620,000
Depreciation = $320,000
So, we can compute the cash flow by using following formula:
Cash Flow = EBIT × (1 - Tax Rate) + Depreciation
(a). For tax bracket = 35%
Here EBIT = EBITDA - Depreciation
= $620,000 - $320,000
= $300,000
Now by putting the value in the formula, we get:
Cash Flow = $300,000 × ( 1 - 35%) + $320,000
= $300,000 × 0.65 + $320,000
= $195,000 + $320,000
= $515,000
Hence, the cash flow is $515,000 for 35% tax bracket.
(b) For tax bracket = 20%
Here EBIT = EBITDA - Depreciation
= $620,000 - $320,000
= $300,000
Now by putting the value in the formula, we get:
Cash Flow = $300,000 × ( 1 - 20%) + $320,000
= $300,000 × 0.8 + $320,000
= $240,000 + $320,000
= $560,000
Hence, the cash flow is $560,000 for 20% tax bracket.
Answer:
Economic espionage.
Explanation:
Economic espionage is an activity of unlawfully targeting and spying the sensitive information of corporate or government. The motive behind economic espionage is more than just earning profit, it is much larger in scope and scale. It include theft of critical economic intelligence, trade secret, intellectual property, etc. There are different ways of conducting economic espoinage:
1) Hiring insider of corporate or research institution and getting information on trade secrets etc.
2) By Cyber attack, theft, bribery, etc.
3) Building relationship with corporate or goverment, which seems innocent, however, motive is to gather economic intelligence.
There is Law been passed to protect against economic espionage.
Preferred stock, 11 percent, par value $13 per share, 5,000 shares authorized
During the year, the following transactions took place in the order presented:
a. Sold and issued 21,900 shares of common stock at $26 cash per share.
b. Sold and issued 2,800 shares of preferred stock at $30 cash per share.
c. At the end of the year, the accounts showed net income of $41,600. No dividends were declared.
Required:
Prepare the stockholders’ equity section of the balance sheet at the end of the year.
Answer and Explanation:
The preparation of the stockholder equity section is presented below:
Tandy Company
Balance Sheet (Partial)
Stockholders Equity :
Contributed Capital :
Common stock (21,900 shares × $6) $131,400
Preferred stock (5,000 shares × $13) $65,000
Additional Paid in Capital - Common stock (21,900 shares × $20) $438,000
Additional Paid in Capital - Preferred stock (5,000 shares × $17) $85,000
Total Contributed Capital $719,400
Add: Retained Earnings $41,600
Total Stockholders Equity $761,000
a. $5,850b. $5,550c. $5,350d. $5,250
Answer:
a. $5,850
Explanation:
Under the LIFO Method, the cost of good sold equals to
= January 28 units × cost per unit + Remaining units × cost per unit
= 100 units × $24 + 150 units × $23
= $2,400 + $3,450
= $5,850
Since the firm has sold 250 units, so out of which 100 units sold at a price of $24 and the remaining 150 units sold at a price of $23
The cost of the inventory at January 31, year 2, under the LIFO method is not provided in the answer choices.
The LIFO (Last In First Out) method assumes that the most recently purchased inventory is sold first. In this case, the cost of the 250 units purchased on January 18, 23, and 24 will be used to calculate the cost of the inventory at January 31st.
Let's calculate the cost of the inventory:
The total cost of the inventory at January 31st, year 2, under the LIFO method is $9,350. Therefore, the correct option is none of the above.
#SPJ12
b. What is the safety stock they need to provide a 95% service level?
c. What is the order point the company should use?
Answer:
a) Average demand during the lead time = Sum of all the historical demand during lead time / Number of periods
= (55+75+75+70+80+60+50+70+60+85) / 10
= 680 / 10
= 68 gallons
b) Standard deviation of demand during lead time(\sigmadL) = 8.5 gallons
At 95% service level,value of Z = 1.65
Safety stock = Z(\sigmadL) = 1.65(8.5) = 14.03 gallons
c) Reorder point = Average demand during the lead time + Safety stock
= 68 + 14.03
= 82.03 gallons
Answer:
The correct answer is b. after taxes minus preferred dividends.
Explanation:
Net profit:Add all the revenues of the firm and deduct all the expenses of the firm. If the amount come in positive, the firm earns profit else suffered loss.
In mathematically,
Net profit = Sales revenue - all expenses
The earning which is available to shareholders is net profit after paying preference dividend to preference shareholders.
As first we have to pay the dividend to preference shareholders then we distribute the income to equity shareholders.
In mathematically,
EBIT - taxes - Preferred dividend
Hence, the correct option is b. After taxes minus preferred dividends.
Answer:
Break-even point (dollars)= $300,000
Explanation:
Giving the following information:
Variable cost ratio 80%
Total fixed costs $60,000
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
contribution margin ratio= 1 - 0.8= 0.2
Break-even point (dollars)= 60,000 / 0.2
Break-even point (dollars)= $300,000