Sharpe case

Cash budget) The Sharpe Corporation’s projected sales for the first eight months of 2011

are as follows:

January $ 89,800 May $300,100

February 120,000 June 270,100

March 136,000 July 225,800

April 240,900 August151,000

 

Of Sharpe’s sales, 10 percent is for cash, another 60 percent is collected in the month following sale, and 30 percent is collected in the second month following sale. November and December sales for 2010 were $219,200 and $175,600, respectively.

Sharpe purchases its raw materials two months in advance of its sales equal to 60 percent of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March.

In addition, Sharpe pays $9,100 per month for rent and $20,700 each month for other expenditures.

Tax prepayments of $23,000 are made each quarter, beginning in March.

The company’s cash balance at December 31, 2010, was $21,600; a minimum balance of $15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available.

Interest on short-term loans (11 percent) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional $60,910, these funds would be borrowed at the beginning of April

with interest of $558 (11% × 1/12 × $60,910) owed for April and paid at the beginning of May.

 

a. Prepare a cash budget for Sharpe covering the first seven months of 2011.(nov sales = $219,200; dec sales = $175,600; jan sales = $89,800;

b. Sharpe has $199,800 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have sufficient cash to repay the notes?

Answer: http://homework.ecrater.com/p/19551356/hw-956-sharpe-case

Funding Structure Paper

Understanding how to properly value a vanilla bond (a plain bond) is essential for finance. Using the following Web site, https://www.auctions.zionsdirect.com, Find 3 different funding structures.
Describe for each structure: security type, term, and yield. Furthermore, take a look at each of their offering documents, and provide a short description of the information found in the documentation.

 

Answer: http://homework.ecrater.com/p/19551346/hw-955-funding-structure-paper 

 


Why do the different types of bonds get different rates? Explain your answer.
What makes each of the different structures different? Explain your answer.
What does the rate given say about the credit rating for each issuer? Explain your answer.
How does credit rating affect the rate given to the issuer? Explain your answer.
Which structure has the best credit rating based on the yield given to each structure? Explain your answer.
What is the credit rating supposed to tell you? Explain your answer.
Which bond is receiving the best price? Explain your answer.
Why does having a good credit rating matter to the issuer? Explain your answer

Financial Accounting 30 MCQ

 
 
     

 

1) Which financial statement is used to determine cash generated from operations?

 

A.

 

Income statement

 

B.

 

Statement of operations

 

C.

 

Statement of cash flows

 

D.

 

Retained earnings statement

 

2) In terms of sequence, in what order must the four basic financial statements be prepared?

 

A.

 

Balance sheet, income statement, statement of cash flows, and capital statement

 

B.

 

Income statement, capital statement, statement of cash flows, and balance sheet

 

C.

 

Balance sheet, capital statement, statement of cash flows, and income statement

 

D.

 

Income statement, capital statement, balance sheet, and statement of cash flows

 

3) In classifying transactions, which of the following is true in regard to assets?

 

A.

 

Normal balances and increases are debits.

 

B.

 

Normal balances and decreases are credits.

 

C.

 

Normal balances can either be debits or credits for assets.

 

D.

 

Normal balances are debits and increases can be debits or credits.

 

4) An increase in an expense account must be

 

A.

 

debited

 

B.

 

credited

 

C.

 

either debited or credited, depending on the circumstances

 

D.

 

capitalized

 

5) ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry?

 

A.

 

 

Cash

$100

 

Common Stock

 

$100

 

B.

 

 

Cash

$500

 

Common Stock

 

$500

 

C.

 

 

Cash

$500

 

Paid-in Capital, Excess of Par

 

$400

Common Stock

 

$100

 

D.

 

 

Cash

$100

 

Paid-in Capital, Excess of Par

$400

 

Common Stock

 

$500

 

6) In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to $600. The cash account has a

 

A.

 

$600 credit balance

 

B.

 

$1,400 debit balance

 

C.

 

$800 debit balance

 

D.

 

$800 credit balance

 

7) Which ledger contains control accounts?

 

A.

 

Accounts receivable subsidiary ledger

 

B.

 

General ledger

 

C.

 

Accounts payable subsidiary ledger

 

D.

 

General revenue and expense ledger

 

8) Smith is a customer of ABC Corporation. Smith typically purchases merchandise from ABC on account. Which ledger would ABC use to keep track of the details of Smith’s account?

 

A.

 

Accounts receivable subsidiary ledger

 

B.

 

Accounts receivable control ledger

 

C.

 

General ledger

 

D.

 

Accounts payable subsidiary ledger

 

9) Under the cash basis of accounting,

 

A.

 

revenue is recognized when services are performed

 

B.

 

expenses are matched with the revenue that is produced

 

C.

 

cash must be received before revenue is recognized

 

D.

 

a promise to pay is sufficient to recognize revenue

 

10) Under the accrual basis of accounting,

 

A.

 

cash must be received before revenue is recognized

 

B.

 

net income is calculated by matching cash outflows against cash inflows

 

C.

 

events that change a company’s financial statements are recognized in the period they occur rather than in the period in which the cash is paid or received

 

D.

 

the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles

 

11) The Vintage Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is

 

A.

 

debit Laundry Expense, $2,000; credit Laundry Expense $2,000

 

B.

 

debit Laundry Expense, $4,500; credit Laundry Supplies Expense, $4,500

 

C.

 

debit Laundry Supplies, $2,000; credit Laundry Supplies Expense, $2,000

 

D.

 

debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,500

 

12) Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

 

A.

 

debit Office Supplies Expense, $1,100; credit Office Supplies, $1,100

 

B.

 

debit Office Supplies, $2,900; credit Office Supplies Expense, $2,900

 

C.

 

debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900

 

D.

 

debit Office Supplies, $1,100; credit Office Supplies Expense, $1,100

 

13) Based on the account balance below, what is the total of the debit and credit columns of the adjusted trial balance?

Service revenue

$3,300

 

Equipment

$6,400

Cash

1,525

 

Prepaid insurance

1,225

Unearned revenue

5,320

 

Depreciation expense

640

Salary

1,050

 

Accum. depreciation

1,280

Common stock

390

 

Retained earnings

550

 

A.

 

$9,150

 

B.

 

$10,840

 

C.

 

$9,560

 

D.

 

$10,430

 

14) An adjusted trial balance

 

A.

 

is prepared after the financial statements are completed

 

B.

 

proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made

 

C.

 

is a required financial statement under generally accepted accounting principles

 

D.

 

cannot be used to prepare financial statements

 

15) Given the following adjusted trial balance, net income for the year is:

 

Debit

Credit

Cash

$781

 

Accounts receivable

1,049

 

Inventory

1,562

 

Prepaid rent

43

 

Property, plant & equipment

150

 

Accumulated depreciation

 

26

Accounts payable

 

41

Unearned revenue

 

61

Common stock

 

103

Retained earnings 

 

3,305

Service revenue

 

134

Interest revenue

 

28

Salary expense

80

 

Travel expense

33

 

Total

$3,698

$3,698

 

A.

 

$248

 

B.

 

$135

 

C.

 

$162

 

D.

 

$49

 

16) Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

 

Debit

Credit

Cash

$1,562

 

Accounts receivable

2,098

 

Inventory

3,124

 

Prepaid rent

86

 

Property, plant, & equipment

300

 

Accumulated depreciation

 

$52

Accounts payable

 

82

Unearned revenue

 

172

Common stock

 

206

Retained earnings

 

6,610

Service revenue

 

218

Interest revenue

 

56

Salary expense

160

 

Travel expense

66

  

Totals

$7,396

$7,396

 

A.

 

$7,396

 

B.

 

$7,118

 

C.

 

$7,334

 

D.

 

$7,170

 

17) Given the following adjusted trial balance:

 

Debit

Credit

Cash

$781

 

Accounts receivable

1,049

 

Inventory

1,562

 

Prepaid rent

43

 

Property, plant & equipment

150

 

Accumulated depreciation

 

$26

Accounts payable

 

41

Unearned revenue

 

61

Common stock

 

103

Retained earnings 

 

3,305

Service revenue

 

134

Interest revenue

 

28

Salary expense

80

 

Travel expense

33

 

Total

$3,698

$3,698

After closing entries have been posted, the balance in retained earnings will be

 

A.

 

$3,256

 

B.

 

$3,170

 

C.

 

$3,440

 

D.

 

$3,354

 

 

 

 

     
 

18) Net income is recorded on the work sheet under the

 

A.

 

debit column of the adjusted trial balance and the credit column of retained earnings

 

B.

 

debit column of the income statement and the credit column of the balance sheet

 

C.

 

credit column of the adjusted trial balance and the debit column of retained earnings

 

D.

 

credit column of the income statement and the debit column of the balance sheet

 

19) At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate would be

 

A.

 

$900,000 and 65%

 

B.

 

$1,300,000 and 35%

 

C.

 

$900,000 and 35%

 

D.

 

$1,300,000 and 65%

 

20) During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have been

 

A.

 

$480,000

 

B.

 

$420,000

 

C.

 

$390,000

 

D.

 

Insufficient data to determine

 

21) At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and gross profit rate would be

 

A.

 

$400,000 and 60%

 

B.

 

$600,000 and 40%

 

C.

 

$400,000 and 40%

 

D.

 

$600,000 and 60%

 

22) The entry to record of sale of $900 with terms of 2/10, n/30 will include a

 

A.

 

debit to Sales Discount for $18

 

B.

 

debit to Sales Revenue for $882

 

C.

 

credit to Accounts Receivable for $900

 

D.

 

credit to Sales Revenue for $900

 

     
 

23) Dobler Company uses a periodic inventory system. Details for the inventory account for the

 

Units

Per unit price

Total

Balance, 1/1/2012

200

$5.00

$1,000

Purchase, 1/15/2012

100

5.3

530

Purchase, 1/28/2012

100

5.5

550

An end of the month (1/31/2012), inventory showed that 140 units were on hand. If the company uses LIFO, what is the value of the ending inventory?

 

A.

 

$737

 

B.

 

$700

 

C.

 

$762

 

D.

 

$1,380

 

24) The difference between ending inventory using LIFO and ending inventory using FIFO is referred to as

 

A.

 

FIFO reserve

 

B.

 

inventory reserve

 

C.

 

LIFO reserve

 

D.

 

periodic reserve

 

25) A consistent application of an inventory costing method enhances

 

A.

 

conservatism

 

B.

 

accuracy

 

C.

 

comparability

 

D.

 

efficiency

 

26) The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?

 

A.

 

$11,300

 

B.

 

$12,000

 

C.

 

$10,000

 

D.

 

$10,700

 

 

27) A very small company would have the most difficulty in implementing which of the following internal control activities?

 

A.

 

Separation of duties

 

B.

 

Limited access to assets

 

C.

 

Periodic independent verification

 

D.

 

Sound personnel procedures

 

28) A system of internal control

 

A.

 

is infallible

 

B.

 

can be rendered ineffective by employee collusion

 

C.

 

invariably will have costs exceeding benefits

 

D.

 

is premised on the concept of absolute assurance

 

29) The custodian of a company asset should

 

A.

 

have access to the accounting record for that asset

 

B.

 

be someone outside the company

 

C.

 

not have access to the accounting record for that asset

 

D.

 

be an accountant

 

30) The Sarbanes Oxley Act (2002) applies to

 

A.

 

U.S. companies but not international companies

 

B.

 

international companies but not U.S. companies

 

C.

 

U.S. and Canadian companies but not other international companies

 

D.

 

U.S. and international companies listed on the U.S. stock exchanges

 Answer: http://homework.ecrater.com/p/19562433/hw-965-wiley-plus-question-1-through-6

Management Quiz

Which of the following is not reliable measure of how well a company’s current strategy is working?
A) Trends in the company’s sales and earning growth
B) The company’s development of human capital, organizational, capital, and information capital
C) Changes in the firms’ image and reputation with its customers
D) The company’s overall financial strength
E) Evidence of improvement in internal processes such as defect rate, order fulfillment and employee productively

A resource based strategy
a) is often based on cross department combinations of intellectual capital and expertise
b) uses a company’s valuable and rare resources and competitive capabilities to deliver value to customers that rivals have difficulty matching
c) is typically based on a standard alone resource strength such as technological expertise
d) refer to a company’s most efficiently executed value chain activity
e) uses industry key success factors to provide a company with a core competence that rivals cant effectively inmate

a resource based strategy
a) focuses on exploiting a company’s best executed operating strategy
b) is based upon efficient performance of the company’s primary value chain activities
c) concentrates on minimizing the costs associated with the design of a product or service
d) attempts to exploit resources in a manner that offers value to customers in ways rivals are unable to match
e) focuses on working with forward channel allies to develop capabilities to outmatch the capabilities of rivals

the common types of valuable resources and competitive capabilities that management should consider when crafting a strategy include:
a) a skill, specialized expertise, or competitively important capability
b) valuable physical and intangible assets
c) valuable human assets and intellectual capital
d) valuable organizational assets and competitively valuable alliances
e) all of these above

the competitive power of a company resource depend on
a) whether it helps differentiate a company’s product offering from the product offering of rival firms
b) whether the resource is really competitively valuable, if it is rare and something competitors lack, how hard it is to copy or imitate and how easily it can be trumped by the substitute resource strengths and competitive capabilities of rivals
c) whether customers are aware of the resource and view it positively enough to boost the company’s brand name reputation
d) whether the resource is something rivals are unable to perform if it is an important differentiating product or service feature , how strongly it contributes to the company’s brand image, and if it is the foundation of cost based advantage
e) whether the resource is technology based or based on superior marketing know how

the competitive power of a company resource or competitive capability hinges on
a) how hard it is for competitors to copy or imitate
b) whether it is rare and therefore something rivals lack
c) whether it is really competitively valuable
d) how easily it can be trumped by the substitute resources/capabilities of rivals
e) all of these

for a particular company resource to have meaningful competitive power and perhaps qualify as a basis for competitive advantage it should
a) be competitively important, hard for competitors to copy or imitate, rare and something rivals lack, and not be easily trumped by the substitute resources/capabilities of rivals
b) be something that a company does internally rather than in collaborative arrangements with outsiders
c) be patentable
d) be rooted in the company’s organizational capital, information capital, or human capital
e) have the potential for lowering the firms’ unit costs

Answer: http://homework.ecrater.com/p/19536219/hw-950-management-quiz

Financial Reporting Problem Part-I, II and Presentation

Financial Reporting Problem Part-I, II and Presentation

Company – Wal-Mart Stores Inc.

Financial Report Problem Part-1  Wal-Mart

Browse the Internet to acquire a copy of the most recent annual report for a publicly traded company.
Analyze the information contained in the company’s balance sheet and income statement to answer the following questions:

•What are the company’s total assets at the end of its most recent annual reporting period? Why is this important?

•What are the total assets at the end of the previous annual reporting period?

•How much cash and cash equivalents did the company have at the end of its most recent annual reporting period?

•What amount of accounts payable did the company have at the end of its most recent annual reporting period?

•What amount of accounts payable did the company have at the end of the previous annual reporting period?

•What are the company’s net revenues for the last three annual reporting periods?

•What is the change in dollars in the company’s net income from its most recent annual reporting period to the previous annual reporting period?

•What are the company’s total current assets at the end of its most recent annual reporting period?

•What are the total current assets at the end of the previous annual reporting period?

•What in the information above would be important to a potential investor, employee, and so forth?

Summarize the analysis in a 1,050- to 1,400-word paper in a Microsoft® Word document.
Include a copy of the company’s balance sheet and income statement.

 

Answer available at:  http://homework.ecrater.com/p/19524605/hw-928-financial-report-problem-wal

Financial Reporting problem Part-2 Wal-Mart

Financial Reporting Problem, Part 2 Access the Internet to acquire a copy of the most recent annual report for the publicly traded company used to complete the Financial Reporting Problem, Part 1 assignment due in Week Four.

Analyze the information contained in the company’s balance sheet and income statement to answer the following questions:

• Are the assets included under the company’s current assets listed in the proper order? Explain your answer.
• How are the company’s assets classified?
• What are cash equivalents?
• What are the company’s total current liabilities at the end of its most recent annual reporting period?
• What are the company’s total current liabilities at the end of the previous annual reporting period?
• Considering all the information you have gathered, why might this information be important to potential creditors, investors, and employees?

Summarize the analysis in a 1,050- to 1,400-word paper in a Microsoft® Word document.

Include a copy of the company’s balance sheet and income statement.

 

Answer available at:  http://homework.ecrater.com/p/19538310/hw-952-financial-reporting-problem-part-2

 

Financial Reporting Problem Presentation -Wal-Mart

Financial Reporting Problem Presentation
(Company: Wal-Mart) Class Presentations (20 minutes per person)

Create a 15- to 20-slide Microsoft® PowerPoint® presentation using and illustrating your research from the Financial Reporting Problem. Make sure you include the History of the company.

Include speaker’s notes with each slide

Answer available at: http://homework.ecrater.com/p/19548692/hw-953-financial-reporting-problem-presentation

Capital Structure Analysis

Your Assignment is to select a publicly-held company and to analyze its capital structure, applying the
theories and principles found in Chapter 15 of the text.
The structure of your research paper should include:
o A preview of capital structure issues
o Business and financial risks related to capital structure
o Modigliani and Miller’s [MM] capital-structure theory
o Criticisms of the MM model and assumptions
o Capital structure evidence and implications
o Estimating the firm’s optimal capital structure
A firm’s optimal capital-structure is that mix of debt and equity that maximizes the stock price. At any
point in time, management has a specific target capital structure in mind, presumably the optimal one,
though this target may change over time. For example, financial management may choose a 50%
equity financing [stock] and 50% debt [bond] financing.
Several factors influence a firms’ capital structure, including:
o Business risk
o Tax position
o The need for financial flexibility
o Managerial conservativeness
o Growth opportunities
Business risk is the riskiness inherent in the firm’s operations if it uses no debt.
This report is intended to be a capital structure analysis of your selected public company. Your paper is intended to be an executive summary of your analysis, and is limited to a minimum of 5 – 7 pages of text, excluding the title page, table of contents, graphs, charts, tables, etc.
This summary report of your selected company’s capital structure should convey the quality, depth, and completeness of your capital structure analysis, without going into excessive detail.

Answer with abstract, references and citations, charts, tables. Total 13 pages including charts, references pages. Supporting excel provided.
Company: Starbucks Corporation.
Data taken for 5 years including FY ending September 30th, 2013.

Get Answer fromhttp://homework.ecrater.com/p/19333004/hw-854-starbucks-capital-structure-analysis