ABC Inc. was incorporated two years ago by issuing 5,000 shares of common stock at $400 each and borrowing
$240,000 from a bank on a long-term note. Last year, ABC reported net income of $40,000 and paid a cash dividend of $1,800. Last year the company also borrowed an additional $320,000 from the bank. What was total assets on ABC's balance sheet at the end of the year last year?
a. None of these
On December 31, 2017, Johnson Inc. has total liabilities of $520,000 and total equity of $446,000. The company needs to raise additional funds through debt and equity. The company will issue 1,000 shares of common stock at $9 per share and in addition it intends to borrow as much as it can from Bank of Morganville. Bank of Morganville requires a maximum debt-to-asset ratio of 0.8.
What is the maximum additional amount that Johnson Inc. can borrow after the additional stock is issued?
d. $0 (the company already exceeds the 0.8 debt-to-asset ratio)
Paper Inc. sells markers. During January 2018, its inventory records for one brand of its markers were as follows:
Quantity Price per market Total
Beginning Inventory 16 $1.21 = $19.36
January 6 Purchase 6 $0.88 =$5.28
January 10 Sale 9 N/A
January 15 Purchase 8 $0.91 =$7.28
January 20 Sale 3 N/A
January 25 Purchase 9 $0.85 =$7.65
Determine the cost of goods sold using the perpetual weighted average cost method.