Background and introduction
A company can raise funds through a variety of sources to finance its expansion. The
sources of financing can broadly be categorized under two heads i.e., debt financing and equity
Debt financing is a source of finan
(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two
Given the information in the table, what is the expected rate of return for stock B?
Office 2013 myitlab:grader Instructions
Exploring Series Vol. 2
Replacement China, Inc.
You work as an associate database manager at Replacement China, Inc. This firm specializes in
finding difficult-to-replace, no-longer manufactured
Explain how inflation affects the rate of return required on an investment project and the
distribution between a real and a nominal approach to the evaluation of an investment project
Inflation represents general increase in t
(W-1) Net present value
The cash flows are not allowed for inflation. Therefore, adjustment for inflation is required. Alternatively,
inflation adjusted rate might be used.
Project - A
Will the company need any outside financing?
Answer: The Company will need outside financing in first four (04) months as follows;
What is the minimum line of
Forecast Sales - Reference only
Sales receipt - 25% in the month of sale
Sales receipt - 55% in 2nd month of sale
Sales receipt - 20% in 3rd month of sale
Total cash inflows
Module 3, Assignment 2 Template
Genesis Cash Budget
Sales (Reference only)
Cash Collections on Sales
10% in month of sale
25% in first month after sale
35% in second month after sale
30% in third month after sale
Other Cash Receipts
Hunter Marketing Co.
Cr. Share capital
(To record the commencement of business)
Dr. Office equipment
Cr. Accounts payable: Office Max
(To record office equipment purchased on credit)
Balance Sheet as at 31-12-2015
BeeGee Company, operating at full capacity, sold 150,000 units at a price of $116 per unit during
the current year. Its income statement is as follows:
Cost of Goods Sold
Author: Type in your name here
Purpose: To analyze the data for a sample month's orders relating to
clothing, manufacturing and retailing departments under various
scnearios and alternatives so as to determine th
BEST BUY INC
For the year ended January 31, 2016
Less: Cost of goods sold
Less: Selling, General and Administrative expenses
Operating Profit (EBIT)
Plus: Other income (minus other expenses)
Less: Financing expenses
Book value of inventory
Fair value of inventory
Inventory (consolidated balance sheet)
($70,000 - $5,000)
Book value of land
Fair value of land
Land (consolidated balance
Pre-acquisition adjustments are ignored. Therefore, answer is A. None
Total stockholders Equity
Non-Controlling interest at acquisition
Total stockholder equity of Redding
Share of retained earnings
a) On January 15, 1,000 shares were sold from treasury stock for $4,000. (The shares had
been reacquired for $6,000 and held as treasury in 2014. The company uses the single
transaction method to account for t
Are there two ABC methods in accounting?
Some accountants use ABC to mean Activity Based Costing. Under this ABC a manufacturer will use many
cost drivers to assign overhead costs to products. The objective of Activity Based Costing is to assign the
Are repairs to office equipment and factory equipment period costs?
Repairs to office equipment are period costs. That is, the cost of the repairs to office equipment will be
reported as a selling, general and administrative (SG&A) expense in the period i
Is depreciation a direct or indirect cost?
Depreciation can be either a direct cost or an indirect cost, or it can be both direct and indirect.
Let's illustrate this with the depreciation of a machine used in Department 23 of a manufacturer. The
How do I record an advance to an employee and the deduction?
A cash advance to an employee is recorded with a debit to an account such as Advance to Employees or
to Other Receivables: Advances. The credit will be to the account Cash. If the cash advance i
Is a security deposit a current asset?
The security deposit paid to another entity is a current asset, if the security deposit will be returned
within one year of the balance sheet date. The entity holding the security deposit will report it as a
How can working capital be improved?
Working capital can be improved by 1) earning profits, 2) issuing common stock or preferred stock for
cash, 3) replacing short-term debt with long-term debt, 4) selling long-term assets for cash, 5) settling
What is disinvestment?
In business, disinvestment means to sell off certain assets such as a manufacturing plant, a division or
subsidiary, or product line. Disinvestment is sometimes described as the opposite of capital
expenditures. Some people use the
What is a budget?
A budget is a plan expressed in dollar amounts that acts as a road map to carry out an organization's
objectives, strategies and assumptions.
A company might have a master budget or profit plan for the upcoming year. The master budget wi
What does it mean to reclassify an amount?
To reclassify an amount often means to move an amount from one general ledger account to another
general ledger account.
To illustrate, let's assume that an invoice for $900 was recorded in the account Advertisin
What is a bond?
There are several business definitions for bond.
A bond could be a formal debt instrument issued by a corporation or government and purchased by
investors. This is the meaning when we say that a public utility issued or sold bonds to help
What is a credit?
In accounting there are several meanings of a credit.
In the context of debits and credits, a credit is an entry made on the right side of an account. For
example, accountants will state that a payment on a company's outstanding bills wi
How should an interest only loan be recorded?
The principal balance of an interest only loan is a liability. If none of the principal is due within 12
months of the date of the balance sheet, the entire principal balance is reported as a long-term liabili
How does an expense affect the balance sheet?
An expense will decrease the amount of assets or increase the amount of liabilities, and will reduce the
amount of owner's or stockholders' equity.
For example an expense might 1) reduce a company's assets suc