i. Advise the company on the best investment option for the maturing funds. ii. Based on your choice from part (i), if DEVCON Industries invests the lump sum of $20,000,000 on December 2, 2020 and leaves it in the account for 4 years, what will be the value of the investment on December 1, 2024?
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- Show the solution in good accounting form. On January 1, 2020, HIBISCUS Company purchased 4,000 of P1,000 face value, 10% bonds of IXORA Company for 24,270,600. The bonds will mature on January 1, 2025 and pay interest semi-annually on January 1 and July 1. Bonds effective interest rate is 8%. HIBISCUS has a business model of collecting all the contractural cash flows related to the instrument. How much should HIBISCUS report as interest income on the bonds in the year 2020?Intella's current assets total to $20 million versus $10 million of current liabilities, while AWD's current assets are $10 million versus $20 million of current liabilities. Both firms would like to "window dress" their end-of-year financial statements, and to do so they tentatively plan to borrow $10 million on a short-term basis and to then hold the borrowed funds in their cash accounts. Which of the statements below best describes the results of these transactions? OA. The transactions would improve Intella's financial strength as measured by its current ratio but lower AWD's current ratio. O B. The transactions would lower Intella's financial strength as measured by its current ratio but raise AWD's current ratio. O C. The transactions would have no effect on the firm' financial strength as measured by their current ratios. O D. The transactions would lower both firm' financial strength as measured by their current ratios. O E. The transactions would improve both firms' financial…You have been asked to review the December 31, 2021, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: An investment of $44,000 is included in current assets. Management has indicated that it has no intention of liquidating the investment in 2022. A $240,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on March 31, 2022. Deferred revenue of $102,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2022, and the other one-third in 2023. Determine the appropriate classification of each of these items. (If no entry is required for classification, choose "No entry".)
- You have been asked to review the December 31, 2024, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: An investment of $30,000 is included in current assets. Management has indicated it has no intention of liquidating the investment in 2025. A $100,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10 equal annual installments with the first installment due on March 31, 2025. Deferred revenue of $60,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2025, and the other one-third in 2026.Excelsior Corporation has the following headings on its December 31, 2019 Balance Sheet: Total Current Assets $200,000 Total Assets $500,000 Total Current Liabilities $144,000 Total Non Current Liabilities $300,000 On January 2020 Excelsior sells temporary investments to pay off $41,400 in long term debt Required 1: How much will working capital increase (decrease) by when comparing December 2019 with January 2020? $ Required 2: If no other transaction took place in January 2020, the current ratio at the end of January 2020 is: Required 3: If no other transaction took place in January 2020, the debt to equity ratio at the end of January 2020 is: Required 4: If no other transaction took place in January 2020, the financial leverage in January 2020 is (calculate the Equity Ratio and not the Equity Ratio percentage): Required 5: If last 12 month sales as of January 2020 amount to $480,000, the working capital turnover for the period ended January 31st 2020 is:During 2019, Bitsıncoins Corporation had EBIT of $100,000, a change in net fixed assets of S400,000, an increase in net current assets of $100,000, an increase in spontaneous current liabilities of $400,000, a depreciation expense of $50,000, and a tax rate of 30%. Based on this information, what is Bitsincoin's free cash flow?
- Apple Inc.’s 2021 Consolidated Financial Statements (FYE 9/25/21) reveal a $11,085,000,000 cash outflow for investments in fixed assets (purchases of property, plant and equipment). Assume the average useful life is five years and Apple Inc.’s minimum required rate of return is 12% in 2021 for these investments. Calculate the minimum average annual net cash inflow necessary for these investments to be acceptable. Using the average annual net cash inflows calculated in requirement 1 and the $11,085,000,000 cash outflow for investments, determine the payback period.show wokings and answer all questions. this is accounting question On 1 January 2019 Stremans Co. borrowed GHc 1.5 million at a rate of 8%to finance the production of two assets, both of which were expected to takea year to build. Work started during 2019. The loan facility was drawn downand incurred on 1 January 2019, and was utilized as follows, with theremaining funds invested temporarily at a rate of 3% during the accountingperiod before these funds were required for spending. Asset A Asset B Ghc 000 Ghc 0001 January 2019 250 5001 July 2019 150 3001 November 2019 100 200 Requiredi. Calculate the borrowing cost eligible for capitalization for each qualifyingasset ii. Calculate the cost of each asset as at 31 December 2019.Long-Term Financing Needed At year-end 2019, Wallace Landscaping's total assets were $2.20 million, and its accounts payable were $505,000. Sales, which in 2019 were $3.0 million, are expected to increase by 10% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $415,000 in 2019, and retained earnings were $305,000. Wallace has arranged to sell $70,000 of new common stock in 2020 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2020. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 3%, and 50% of earnings will be paid out as dividends. a. What was Wallace's total long-term debt in 2019? Do not round intermediate calculations. Enter your answer in…
- Long-Term Financing Needed At year-end 2021, Wallace Landscaping's total assets, all of which are used in operations, were $2.34 million, and its accounts payable were $495,000. Sales, which in 2021 were $2.8 million, are expected to increase by 30% in 2022. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $590,000 in 2021, and retained earnings were $245,000. Wallace has arranged to sell $155,000 of new common stock in 2022 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2022. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 3%, and 40% of earnings will be paid out as dividends. a. What was Wallace's total long-term debt in 2021? Do not round…A money market instrument purchased by the company with a face value of $300,000 will mature on October 15, 2021. In order to meet the financial obligations of the business, management has decided to liquidate the investment upon maturity. On that date quarterly interest computed at a rate of 5% per annum is also expected to be collected. What is the interest?Excelsior Corporation has the following headings on its December 31, 2019 Balance Sheet:Total Current Assets $200,000Total Assets $500,000Total Current Liabilities $156,500Total Non Current Liabilities $300,000On January 2020 Excelsior sells temporary investments to pay off $48,900 in long term debt Required 1: How much will working capital increase (decrease) by when comparing December 2019 with January 2020? $ Required 2: If no other transaction took place in January 2020, the current ratio at the end of January 2020 is: Required 3: If no other transaction took place in January 2020, the debt to equity ratio at the end of January 2020 is: Required 4: If no other transaction took place in January 2020, the financial leverage in January 2020 is (calculate the Equity Ratio and not the Equity Ratio percentage): Required 5: If last 12 month sales as of January 2020 amount to $480,000, the working capital turnover for the period ended January 31st 2020 is: