Stocks (7marks) discuss the (2) TWO ways a corporation can finance its operations, including: ~What are...

 

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Stocks (7marks) discuss the (2) TWO ways a corporation can finance its operations, including: ~What are they? -Definitions of Preferred Stock & common stock (2 marks), advantages (2 marks) & disadvantages (2 marks) between the two to the shareholders Bonds (15 marks) ~What are they (1mark) ~The advantages (3 marks) and disadvantages (2 marks) of bonds over stocks to the corporation ~~Definitions of differences of: -Secured & unsecured (2 marks) -Term & Serial (2 marks) ~Registered & Bearer (2 marks) ~Redeemable & retractable (2 marks) -Convertible (1 mark) And finally, Risk vs Return when it comes to investing in these two ways (2 marks) Grade 12 BAT Final exam Question 1 of 11 (20 marks) Written Part Common-size the following summarized income statement & balance sheet (10 marks). Has net income improved? If so, why? If not, why not? Has Owners Equity maintained its percent of total assets over the two years? Do a vertical analysis. Point out strengths & weaknesses (10 marks) ABC Company Ltd Income Statement For the period ending Dec. 31, 2021 2021 % 2020 % Sales 3,450,000 2,500,000 Cost of Sales 2,242,500 1,500,000 Gross Profit 1,207,500 1,000,000 Operating Expenses Advertising 250,000 200,000 Promotion 46,800 36,000 Sales Salaries 367,000 300,000 Admin. Salaries 150,000 120,000 Rent 120,000 120,000 Utilities 50,000 36,000 Net Income 223,770 188,000 ABC Company Ltd. Balance Sheet As of December 31, 2021 2021 % 2020 % ASSETS: Cash 550,000 945,000 Accounts Receivable 2,489,000 3,598,000 Inventory 742,500 1,400,000 Capital Assets 5,425,000 3,750,000 Total Assets 9,206,500 9,693,000 LIABILITIES Accounts Payable 2,895,000 3,800,000 OWNERS EQUITY 6,311,500 5,893,000 Total Liabilities & O/E 9,206,500 9,693,000 Grade 12 BAT Final exam Written Part Question 2 - Partnerships (2 marks) Baier & Smith formed a partnership under the name Brooks & Pats Plumbing. On Jan.1 2016, Baier contributed $3000 cash, plumbing supplies of $3,700, and a van with a market value of $25,000, which originally cost him $42,000. Smith contributed $12,000 cash and $6,5000 work of tools, which had originally cost $12,000. Journalize the opening entries for the partnership (2 marks) Date Particulars PR Debit Credit Grade 12 BAT Final exam Written Part Question 3 - Notes receivables (6 marks) Record the following transactions in general journal form for McConnell Company. 01-Jul 30-Sep Received a $5,000, 3-month, 8% note, dated July 1st, from Ruth Jordan because she was unable to pay off themoney she owed us from a previous accounts receivable Received notification from Ruth Jordan that she was unable to honour her note at this time. It is expected that Jordan will pay at a later date. Received full payment from Kuth Jordan for note receivable previously dishonoured. No additional financing charges were charged. 15-Nov Date Particulars P.R. Debit Credit Stocks (7marks) discuss the (2) TWO ways a corporation can finance its operations, including: ~What are they? -Definitions of Preferred Stock & common stock (2 marks), advantages (2 marks) & disadvantages (2 marks) between the two to the shareholders Bonds (15 marks) ~What are they (1mark) ~The advantages (3 marks) and disadvantages (2 marks) of bonds over stocks to the corporation ~~Definitions of differences of: -Secured & unsecured (2 marks) -Term & Serial (2 marks) ~Registered & Bearer (2 marks) ~Redeemable & retractable (2 marks) -Convertible (1 mark) And finally, Risk vs Return when it comes to investing in these two ways (2 marks) Grade 12 BAT Final exam Question 1 of 11 (20 marks) Written Part Common-size the following summarized income statement & balance sheet (10 marks). Has net income improved? If so, why? If not, why not? Has Owners Equity maintained its percent of total assets over the two years? Do a vertical analysis. Point out strengths & weaknesses (10 marks) ABC Company Ltd Income Statement For the period ending Dec. 31, 2021 2021 % 2020 % Sales 3,450,000 2,500,000 Cost of Sales 2,242,500 1,500,000 Gross Profit 1,207,500 1,000,000 Operating Expenses Advertising 250,000 200,000 Promotion 46,800 36,000 Sales Salaries 367,000 300,000 Admin. Salaries 150,000 120,000 Rent 120,000 120,000 Utilities 50,000 36,000 Net Income 223,770 188,000 ABC Company Ltd. Balance Sheet As of December 31, 2021 2021 % 2020 % ASSETS: Cash 550,000 945,000 Accounts Receivable 2,489,000 3,598,000 Inventory 742,500 1,400,000 Capital Assets 5,425,000 3,750,000 Total Assets 9,206,500 9,693,000 LIABILITIES Accounts Payable 2,895,000 3,800,000 OWNERS EQUITY 6,311,500 5,893,000 Total Liabilities & O/E 9,206,500 9,693,000 Grade 12 BAT Final exam Written Part Question 2 - Partnerships (2 marks) Baier & Smith formed a partnership under the name Brooks & Pats Plumbing. On Jan.1 2016, Baier contributed $3000 cash, plumbing supplies of $3,700, and a van with a market value of $25,000, which originally cost him $42,000. Smith contributed $12,000 cash and $6,5000 work of tools, which had originally cost $12,000. Journalize the opening entries for the partnership (2 marks) Date Particulars PR Debit Credit Grade 12 BAT Final exam Written Part Question 3 - Notes receivables (6 marks) Record the following transactions in general journal form for McConnell Company. 01-Jul 30-Sep Received a $5,000, 3-month, 8% note, dated July 1st, from Ruth Jordan because she was unable to pay off themoney she owed us from a previous accounts receivable Received notification from Ruth Jordan that she was unable to honour her note at this time. It is expected that Jordan will pay at a later date. Received full payment from Kuth Jordan for note receivable previously dishonoured. No additional financing charges were charged. 15-Nov Date Particulars P.R. Debit Credit