Business
The Saunders Investment Bank has the following financing outstanding. Debt: 60,000 bonds with a coupon rate of 5.1 percent and a current price quote of 106.1; the bonds have 15 years to maturity and a par value of $1,000. 18,900 zero coupon bonds with a price quote of 21.6, 27 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding. Preferred stock: 155,000 shares of 2.9 percent preferred stock with a current price of $84 and a par value of $100. Common stock: 2,300,000 shares of common stock; the current price is $92 and the beta of the stock is 1.20. Market: The corporate tax rate is 25 percent, the market risk premium is 6.9 percent, and the risk-free rate is 3.5 percent.Required:What is the WACC for the company?
Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):Account Titles Debit CreditCash $ 6Accounts Receivable 2Supplies 2Equipment 10Accumulated Depreciation $3Software 8Accumulated Amortization 3Accounts Payable 6Notes Payable (short-term) 0Salaries and Wages Payable 0Interest Payable 0Income Taxes Payable 0Deferred Revenue 0Common Stock 13Retained Earnings 3Service Revenue 0Depreciation Expense 0Amortization Expense 0Salaries and Wages Expense 0Supplies Expense 0Interest Expense 0Income Tax Expense 0Totals $28 $28Transactions during 2018 (summarized in thousands of dollars) follow:Borrowed $13 cash on July 1, 2018, signing a six-month note payable.Purchased equipment for $16 cash on July 2, 2018.Issued additional shares of common stock for $6 on July 3.Purchased software on July 4, $2 cash.Purchased supplies on July 5 on account for future use, $8.Recorded revenues on December 6 of $47, including $9 on credit and $38 received in cash.Recognized salaries and wages expense on December 7 of $21; paid in cash.Collected accounts receivable on December 8, $8.Paid accounts payable on December 9, $9.Received a $2 cash deposit on December 10 from a hospital for a contract to start January 5, 2019. Data for adjusting journal entries on December 31:Amortization for 2018, $3.Supplies of $2 were counted on December 31, 2018.Depreciation for 2018, $3.Accrued interest of $1 on notes payable.Salaries and wages incurred but not yet paid or recorded, $4.Income tax expense for 2018 was $3 and will be paid in 2019.Record journal entries for transactions (a) through (j).Cash 13Notes-payable (short term) 13Equipment 16 Cash 16Cash 6Common Stock 6Software 2Cash 2Supplies 8Accounts Payable 8Accounts Receivable 9Cash 38Service Revenue 47Salaries and Wages Expense 21Cash 21Cash 8Accounts Receivable 8Accounts Payable 9Cash 9Cash 2Deferred Revenue 2Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions (a)-(j), adjusting entries (k)-(p), and closing entry.Prepare an unadjusted trial balance and a trial balance.
The Polishing Department of Major Company has the following production and manufacturing cost data for September.Materials are entered at the beginning of the process.Production:Beginning Inventory 1,880 units that are 100% complete as to materials and 30% complete as to conversion costs;Units started during the period are 44,300;Ending inventory of 7,200 units 10% complete as to conversion costs.Manufacturing Costs:Beginning Inventory costs, comprised of $21,900 of materials and $37,162 of conversion costs;Materials costs added in Polishing during the month, $214,080;labor and overhead applied in Polishing during the month, $127,600 and $258,440, respectively.Required:1. Compute the equivalent units of production for materials and conversion costs for the month of September.MaterialsConversion CostsThe equivalent units of production2. Compute the unit costs for materials and conversion costs for the month. (Round unit costs to 2 decimal places, e.g. 2.25)MaterialsConversion CostsUnit Costs3. Determine the costs to be assigned to the units transferred out and in process. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places.)Transferred Out$Ending work in process$
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $120,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of S1, FVAD of $1 and PVAD of (Use appropriate factor(s) from the tables provided.)Situation 1 2 3 4Lease term (years) 9 9 10 10Lessor's and lessee's interest rate 11$ 13$ 12% 12%Residual value: Estimated fair value 0 $54,000 $8,400 $54,000Guaranteed by lessee 0 0 $8/,400 $64,000Determine the following amounts at the beginning of the lease Round your intermediate and final answer to the nearest whole dollar amount. Answer the missing part.Situation 1 2 3 4A. The lessor's: 1. Lease payments $1,080,000 $1,080,000 $1,200,000 ________2. Gross investment in the leas $1,080,000 $134,000,000 $1,208,400 1,264,0003. Net Investment in the lease 737,534 713,828 762,095 779,996B. The lessee's 4. Lease payments 1,080,000 1,080,000 1,200,000 ________5. Right-of-use asset 737,534 713,828 759,390 ________6. Lease payable 737,534 713,828 759,390 ________
Deitz Corporation is projecting a cash balance of $33,300 in its December 31, 2019, balance sheet. Deitzs schedule of expected collections from customers for the first quarter of 2020 shows total collections of $205,350. The schedule of expected payments for direct materials for the first quarter of 2020 shows total payments of $47,730. Other information gathered for the first quarter of 2020 is sale of equipment $3,330; direct labor $77,700, manufacturing overhead $38,850, selling and administrative expenses $49,950; and purchase of securities $15,540. Deitz wants to maintain a balance of at least $27,750 cash at the end of each quarter. Prepare a cash budget for the first quarter.
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation ExpenseStore Equipment, Sales Salaries Expense, Rent ExpenseSelling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.NELSON COMPANY Unadjusted Trial Balance January 31 Debit CreditCash $22,150 Merchandise inventory 13,000 Store supplies 5,100 Prepaid insurance 2,800 Store equipment 42,800 Accumulated depreciationStore equipment $19,250Accounts payable 17,000Common stock 4,000Retained earnings 25,000Dividends 2,100 Sales 115,900Sales discounts 2,100 Sales returns and allowances 2,000 Cost of goods sold 38,000 Depreciation expenseStore equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expenseSelling space 8,000 Rent expenseOffice space 8,000 Store supplies expense 0 Advertising expense 9,300 Totals $181,150 $181,150Additional Information:a. Store supplies still available at fiscal year-end amount to $2,550. b. Expired insurance, an administrative expense, for the fiscal year is $1,720. c. Depreciation expense on store equipment, a selling expense, is $6,500 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,720 of inventory is still available at fiscal year-end. Required:a. Compute the current ratios as of January 31, 2017. b. Prepare a multiple-step income statement for the year ended January 31.c. Prepare a single-step income statement for the year ended January 31.