BUSINESS COLLEGE

Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual sales of $200,000 in the most recent annual report. Over the past year, how often did Walker Telecommunications sell and replace its inventory?

a) 9.28x b) 8.01x c) 8.44x d) 2.86x

Answers

Answer 1
Answer:

Answer:

c) 8.44x

Explanation:

Total current assets = cash + account receivable + inventory

⇔ $79,000 = $35,550 + $19,750 + Inventory

⇒ Inventory = $79,000 - $35,550 - $19,750 = $23,700

The inventory circles based on annual sales = Sales/ inventory = $200,000/ $23,700 = 8.44
Answer 2
Answer:

The calculate how often Walker Telecommunications sold and replaced its inventory over the past year, we can use the Inventory Turnover Ratio formula.

Inventory Turnover Ratio = Cost of Goods Sold (COGS) / Average Inventory

However, we don't have the exact COGS information, but we can use the Cost of Goods Sold to Sales ratio (COGS/Sales) to estimate it.

Given that the company reported annual sales of $200,000, we need to find the COGS.

COGS/Sales = (COGS) / ($200,000)

We can rearrange the formula to find COGS:

COGS = (COGS/Sales) * ($200,000)

To find the average inventory, we can use the following formula:

Average Inventory = (Beginning Inventory + Ending Inventory) / 2

Since we are looking at how often inventory is sold and replaced, we don't need the specific values for beginning and ending inventory.

We can use the total current assets and the quick ratio to estimate the average inventory:

Quick Ratio = (Total Current Assets - Inventory) / Total Current Liabilities

Solving for Inventory:

Inventory = Total Current Assets - (Quick Ratio * Total Current Liabilities)

Now, we can calculate the inventory turnover ratio:

Inventory Turnover Ratio = COGS / Average Inventory

Substitute the values we found:

Inventory Turnover Ratio = (COGS) / [(Total Current Assets - (Quick Ratio * Total Current Liabilities)) / 2]

Inventory Turnover Ratio = [(COGS/Sales) * ($200,000)] / [(Total Current Assets - (Quick Ratio * Total Current Liabilities)) / 2]

Plugging in the given values:

Inventory Turnover Ratio = [(COGS/Sales) * ($200,000)] / [(79,000 - (2.00 * 27,650)) / 2]

Now, calculate the Inventory Turnover Ratio:

Inventory Turnover Ratio ≈ 8.44x

So, over the past year, Walker Telecommunications sold and replaced its inventory approximately 8.44 times.

Therefore, the answer is (c) 8.44x.

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Answers

Answer:

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Answers

Answer:

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Answers

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Barnett Industries, Inc., issued $600,000 of 8% bonds on January 1, 2019. The bonds pay interest semiannually on July 1 and January 1. The maturity date on these bonds is December 31, 2028. The firm uses the effective interest method of amortizing discounts and premiums. The bonds were sold to yield an effective interest rate of 9%. Barnett incurred legal and investment banking fees of $22,000 in issuing the bonds and amortizes these costs annually on a straight-line basis.Required:

1. Calculate the selling price of the bonds.
2. Prepare journal entry for the issuance of the bonds and bond issue costs.
3. Assume that Barnett uses IFRS. Prepare the journal entry for the issuance of the bonds.

Answers

Answer:

1. The selling price of the bonds is $590.976.46

2 .The journal entry for the issuance of the bonds and bond issue costs would be as follows:

                                                      Debit                          Credit

Cash                                             $538,976.26

Discount on bonds payable       $39,023.74

Unamortized bonds issue costs $22,000

                                       Bonds Payable                       $600,000

3. Assuming that Barnett uses IFRS,  the journal entry for the issuance of the bonds would be as follows:

                     Debit                      Credit              

Cash             $600,000

          Bonds Payable             $600,000

Explanation:

In order to calculate the selling price of the bonds we would have to calculate first the present value of particular and present value of interest, hence:

present value of particular=($600,000×0.414643)=$248,785.80

present value of interest=$600,000×4%13.007936=$312,190.46

Therefore, selling price of the bonds=present value of particular+present value of interest

1. Selling price of the bonds=$248,785.80+$312,190.46=$590.976.46

2. The journal entry for the issuance of the bonds and bond issue costs would be as follows:

                                                      Debit                          Credit

Cash                                             $538,976.26

Discount on bonds payable       $39,023.74

Unamortized bonds issue costs $22,000

                                       Bonds Payable                       $600,000

3. Assuming that Barnett uses IFRS,  the journal entry for the issuance of the bonds would be as follows:

                     Debit                      Credit              

Cash             $600,000

          Bonds Payable             $600,000

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Answers

Answer:

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Explanation:

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           PE ratio= 17.4 times.

First finding earning per share.

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Hence, earning per share (EPS)= $6.07.

Now, finding the appropriate stock price.

Price of stock= EPS* PE

⇒ Price of stock= \$ 6.07* 17.4

∴ Price of stock=\$ 105.60

Hence, $105.60 would be the appropriate price of stock.
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