BUSI 320 Exam 1 Liberty University Complete Answer
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A-Rod Fishing Supplies had sales of $2,860,000 and cost of goods sold of $2,150,000. Selling and administrative expenses represented 8 percent of sales. Depreciation was 6 percent of the total assets of $4,980,000.
What was the firm’s operating profit?
Frantic Fast Foods had earnings after taxes of $1,190,000 in 20X1 with 399,000 shares outstanding. On January 1, 20X2, the firm issued 27,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 24 percent.
a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.)
b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
A firm has net income before interest and taxes of $144,000 and interest expense of $33,600.
a. What is the times-interest-earned ratio? (Round your answer to 2 decimal places.)
b. If the firm’s lease payments are $42,800, what is the fixed charge coverage? (Round your answer to 2 decimal places.)
Gates Appliances has a return-on-assets (investment) ratio of 8 percent.
a. If the debt-to-total-assets ratio is 40 percent, what is the return on equity? (Input your answer as a percent rounded to 2 decimal places.)
b. If the firm had no debt, what would the return-on-equity ratio be? (Input your answer as a percent rounded to 2 decimal places.)
Eli Lilly is very excited because sales for his nursery and plant company are expected to double from $630,000 to $1,260,000 next year. Eli notes that net assets (Assets − Liabilities) will remain at 30 percent of sales. His firm will enjoy an 10 percent return on total sales. He will start the year with $230,000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy.
a. Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and subtract the asset buildup (equal to 30 percent of the sales increase) and add in profit.
b. Does his optimistic outlook for his cash position appear to be correct?
Sales for Ross Pro’s Sports Equipment are expected to be 42,000 units for the coming month. The company likes to maintain 15 percent of unit sales for each month in ending inventory. Beginning inventory is 9,500 units.
How many units should the firm produce for the coming month?
On December 31 of last year, Wolfson Corporation had in inventory 490 units of its product, which cost $21 per unit to produce. During January, the company produced 890 units at a cost of $24 per unit.
Assuming that Wolfson Corporation sold 880 units in January, what was the cost of goods sold?
During 20X2, the cash balance and prepaid expenses balances were unchanged. Accounts receivable and inventory increased by 8 percent. A new machine was purchased on December 31, 20X2, at a cost of $49,000.
Accounts payable increased by 30 percent. Notes payable increased by $7,400 and bonds payable decreased by $17,000, both at the end of the year. The preferred stock, common stock, and capital paid in excess of par accounts did not change.
a. Prepare an income statement for 20X2. (Round EPS answer to 2 decimal places.)
b. Prepare a statement of retained earnings for 20X2.
c. Prepare a balance sheet as of December 31, 20X2. (Amounts to be deducted should be indicated with parentheses or a minus sign.)
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