Handout #2

Handout #2 - TA Comments: The week is shorter, so we will...

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Unformatted text preview: TA Comments: The week is shorter, so we will perform a brief mock-midterm session. If you so desire, I will give a brief preview of the rest of the course. THE MIDTERM IS COMING SOON, SO BE PREPARED. Questions [1] Compose a balance sheet based on the following factors: Cost of Goods Sold is 10% of the sales/revenue. Selling, general, and administrative expenses is twice that of interest expenses. Interest expenses is the same as cost of good sold. Profit Margin is 40%. Taxes is half of the profit margin. Sales for the year was 100 million dollars. Using this scattering of details, construct a balance sheet. Show this in the standard form and in the common-size format. Sales/Revenue $100-COGS $10 GROSS PROFIT $90-Selling, General, Administrative Expenses $20 Earnings before interest and taxes (EBIT) $70-Interest expense $10 Pretax Income $60-Taxes $20 Net Income $40 [2] Suppose your tablet-PC startup has finally had it's IPO, where you secured financing of $100 million dollars. You intend to use this [2] Suppose your tablet-PC startup has finally had it's IPO, where you secured financing of $100 million dollars....
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Handout #2 - TA Comments: The week is shorter, so we will...

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