THPS-1 Solution Key

THPS-1 Solution Key - FI 3300 - Corporation Finance THPS-1...

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FI 3300 - Corporation Finance THPS-1 Solution Key Spring 2011 Answers to Questions 1, 2, 3 and 4 5. Net income = change in retained earnings + dividends = ($350,290,000 - $320,868,600) + $11,421,200 = $40,842,600 . 6. 244,920 / (2,663,420 – 244,920) = .1006 = 10.1% 7. Since inventory is carried at $144.50 per unit, COGS for the accounting period is (625,000)(144.50) = $90,312,500. Revenue = (625,000)(188.00) = $ 117,500,000. Gross profit = 117,500,000 – 90,312,500 = $27,187,500 8. Beginning inventory + COGS - purchases = ending inventory. Beginning inventory = (125,000 + 754,000 - 625,000)(144.50) = $36,703,000 . Gross sales 8,456,210 Returns and allowances 18,410 Net Sales 8,437,800 Beginning of year inventory 1,248,790 Purchases 1,457,880 End of year inventory 1,178,960 Cost of goods sold 1,527,710 Gross profit 6,910,090 Research and development 541,250 Management salaries 1,487,560 General and administrative expenses 741,580 Lease payments 698,650 Advertising 456,320 Depreciation 218,730 Operating profit (or, EBIT) 2,766,000 Interest expense 876,420 Profit before taxes (or, EBT) 1,889,580 Taxes 754,610 Net income 1,134,970 Daryl’s Dog Houses, Inc Income Statement for the Year Ending December 31, 2010
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THPS-1 Solution Key - FI 3300 - Corporation Finance THPS-1...

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