Assume a company had net income of $60,000 that included a gain on the sale of equipment of $4,000. Itprovided the following excerpts from its balance sheet:This Year Last YearCurrent assets:$ 40,000$ 53,000$ 13,000$ 46,000$ 50,000$ 11,000Accounts receivableInventoryPrepaid expensesCurrent liabilities:$ 38,000$ 18,000$ 13,000$ 44,000$ 15,000$ 10,000Accounts payableAccrued liabilitiesIncome taxes payableIf the credits to the company's accumulated depreciation account were $21,000, then based solely on theinformation provided, the company's net cash provided by (used in) operating activities would be: Assume a company is considering buying 10,000 units of a component part rather than making them. A supplierhas agreed to sell the company 10,000 units for a price of $40 per unit. The company's accounting system reportsthe following costs of making the part:Per10,000 UnitsUnitper YearDirect materials$ 18$ 180,000Direct labor12120,000Variable manufacturing overhead220,000Fixed manufacturing overhead, traceableFixed manufacturing overhead, allocated8.80,000440,000Total cost$ 44$ 440,000Three-fourth's of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainderrelates to depreciation of equipment with no salvage value. If the company chooses to buy this component partfrom a supplier, then the supervisor who oversees its production would be discharged. What is the financialadvantage (disadvantage) of buying 10,000 units from the supplier?

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

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An entity reported the following information during the first year of operations: Pretax financial income 9,000,000 Nontaxable interest received 1,000,000 Long-term loss accrual in excess of deductible amount 1,500,000 Tax depreciation in excess of financial depreciation 2,000,000 Income tax rate 30% What is the total tax expense?
Assume a company had net income of $79,000 that included a gain on the sale of equipment of $4,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: Accounts receivable $ 40,000 $ 46,000 Inventory $ 53,000 $ 50,000 Prepaid expenses $ 13,000 $ 11,000 Current liabilities: Accounts payable $ 38,000 $ 44,000 Accrued liabilities $ 18,000 $ 15,000 Income taxes payable $ 13,000 $ 10,000 If the credits to the company’s accumulated depreciation account were $21,000, then based solely on the information provided, the company’s net cash provided by (used in) operating activities would be: Multiple Choice $63,000. $55,000. $105,000. $97,000.
Assume a company had net income of $60,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: $ 41,000 $ 57,000 $ 46,000 $ 53,000 Accounts receivable Inventory Current liabilities: $ 42,000 $ 14,000 $ 49,000 $ 14,000 Accounts payable Income taxes payable The company sold a piece of equipment for cash proceeds of $25,000. The original cost of the asset was $85,000 and its accumulated depreciation at the time of sale was $65,000. The company's accumulated depreciation account has beginning and ending balances of $320,000 and $280,000, respectively. Based solely on the information provided, the net cash provided by operating activities would be:
Assume a company had net income of $62,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: Accounts receivable $ 41,000 $ 46,000 Inventory $ 57,000 $ 53,000 Current liabilities: Accounts payable $ 42,000 $ 49,000 Income taxes payable $ 14,000 $ 14,000 The company sold a piece of equipment for cash proceeds of $25,000. The original cost of the asset was $85,000 and its accumulated depreciation at the time of sale was $65,000. The company’s accumulated depreciation account has beginning and ending balances of $320,000 and $280,000, respectively. Based solely on the information provided, the net cash provided by operating activities would be: Multiple Choice $71,000. $73,000. $83,000. $76,000.
From the following information for BlueInks Corporation, compute the rate of return on assets. Hint: The numerator is income before interest expense and taxes. Net income $40,878 Total assets at beginning of year $250,100 Total assets at end of year $158,680 a. 15% b. 25% c. 16% d. 20%
OG Corporation’s balance sheet and income statement is listed below. Balance Sheet This Year Last Year Cash 50,000 40,000 Accounts receivable 80,000 60,000 Inventories 180,000 110,000 Plant & equipment 300,000 260,000 Less accumulated depreciation -40,000 -20,000 Total assets 570,000 450,000 Accounts payable 100,000 150,000 Accrued…
Micro, Inc., started the year with net fixed assets of $76,175. At the end of the year, there was $97,925 in the same account, and the company's income statement showed depreciation expense of $13,395 for the year. What was the company's net capital spending for the year? a. $83,990 b. $35,685 c. $21,750 d. $43,580 e. $41,170
Net present value method: The following data are accumulated by g e d dg e s company in evaluating the purchase of $117,800 of equipment, having a four-year useful life: Net income net cash flow Year 1 $ 36,000. $ 61,000 Year 2 22,000 47,000 Year 3 11,000 35,000 Year 4. 1,000 24,000 Present value of $1 at compound interest. Year 6% 10% 2% 15% 20% 1. 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712. 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 A. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use…
OG Corporation’s balance sheet and income statement is listed below. Balance Sheet This Year Last Year Cash 50,000 40,000 Accounts receivable 80,000 60,000 Inventories 180,000 110,000 Plant & equipment 300,000 260,000 Less accumulated depreciation -40,000 -20,000 Total assets 570,000 450,000 Accounts payable 100,000 150,000 Accrued…
the income statement of x ltd for the year ended was as follows: net sales 4032000, cost of sales 3168000, depreciation 96000, salaries and wages 384000, opex 128000, provision for taxation 140800, net operating profit 11520. compute net profit before working capital changes
The following information relates to A Co for the last financial year. Revenue $200 million Asset turnover 10 times Interest payable $1.5 million Interest cover ratio 5 times What is the return on capital employed for A Co for the year?
Assume a company had sales of $372,000 (all on account) and net income of $60,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: Accounts receivable $ 40,000 $ 46,000 Inventory $ 53,000 $ 50,000 Prepaid expenses $ 13,000 $ 11,000 Current liabilities: Accounts payable $ 38,000 $ 44,000 Accrued liabilities $ 18,000 $ 15,000 Income taxes payable $ 13,000 $ 10,000 If the credits to the company’s accumulated depreciation account were $21,000, then based solely on the information provided, the company’s cash collections from customers would be: Multiple Choice $375,000. $381,000. $366,000. $378,000.

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