Questions and Answers of Corporate Finance Core Principles and Applications

Draw up an income statement and balance sheet for this company for 2019 and 2020.Use the following information for Ingersoll, Inc., (assume the tax rate is 25 percent): 2019 2020 Sales $ 48,892 $
Consider the following abbreviated financial statements for Weston Enterprises: WESTON ENTERPRISES2020 Income
Stackhouse Industries had the following operating results for 2020: sales = $53,520; cost of goods sold = $36,800; depreciation expense = $5,560; interest expense = $1,260; dividends paid = $2,730.
In the previous problem, suppose Raines Umbrella Corp. paid out $95,000 in cash dividends. Is this possible? If net capital spending and the change in net working capital were both zero, and if no
During 2020, Raines Umbrella Corp. had sales of $890,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $604,000, $151,000, and $93,000, respectively. In
Prescott, Inc., is obligated to pay its creditors $13,500 very soon.a. What is the market value of the shareholders’ equity if assets have a market value of $14,900?b. What if assets equal $10,700?
Prepare a 2020 balance sheet for Jarrow Corp. based on the following information: cash = $117,600; patents and copyrights = $579,000; accounts payable = $300,300; accounts receivable = $165,900;
Given the following information for O’Hara Marine Co., calculate the depreciation expense: sales = $69,480; costs = $34,320; addition to retained earnings = $9,420; dividends paid = $6,240;
Schwert Corp. shows the following information on its 2020 income statement: sales = $315,000; costs = $208,600; other expenses = $8,600; depreciation expense = $21,400; interest expense = $15,700;
During the year, the Senbet Discount Tire Company had gross sales of $529,900. The company’s cost of goods sold and selling expenses were $174,800 and $102,200, respectively. The company also had
The Stancil Corporation provided the following information:Proceeds from long-term borrowing ..............$19,800Proceeds from the sale of common stock .........3,240Purchases of fixed assets
Fizer, Inc., reported the following financial statements for the last two years. Construct the cash flow identity for the company. Explain what each number means.
Ritter Corporation’s accountants prepared the following financial statements for year-end.RITTER CORPORATION Income Statement
Given the information for Dyrdek’s Skate Shop, Inc., in the previous two problems, suppose you also know that the firm’s net capital spending for 2020 was $575,000, and that the firm reduced its
In January 2018, GM announced that it was writing off $7 billion due to the loss in value of tax-deferred assets the company held. We would argue that GM’s stockholders probably didn’t suffer as
The 2019 balance sheet of Dyrdek’s Skate Shop, Inc., showed $486,000 in the common stock account and $5.04 million in the additional paid-in surplus account. The 2020 balance sheet showed $536,000
The 2019 balance sheet of Dyrdek’s Skate Shop, Inc., showed long-term debt of $2.16 million, and the 2020 balance sheet showed long-term debt of $2.28 million. The 2020 income statement showed an
The following table presents the long-term liabilities and stockholders’ equity of Information Control Corp. one year ago:Long-term debt................................$29,600,000Preferred
Bantam Egg’s 2019 balance sheet showed net fixed assets of $3.82 million, and the 2020 balance sheet showed net fixed assets of $4.63 million. The company’s 2020 income statement showed a
Masters, Inc., has sales of $32,400, costs of $14,300, depreciation expense of $2,200, and interest expense of $1,160. If the tax rate is 23 percent, what is the operating cash flow, or OCF?
Timmy Tappan is single and had $189,000 in taxable income. Using the rates from Table 2.3 in the chapter, calculate his income taxes. What is the average tax rate? What is the marginal tax
Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $7.5 million. The machinery can be sold to the Romulans today for $5.6 million. Klingon’s current balance sheet shows
Critics have charged that compensation to top management in the United States is too high and should be cut back. For example, focusing on large corporations, Frank Bisignano, CEO of First Data, was
Och, Inc., has current assets of $6,400, net fixed assets of $29,300, current liabilities of $5,100, and long-term debt of $11,800. What is the value of the shareholders’ equity account for this
Higgins, Inc., has sales of $517,400, costs of $296,300, depreciation expense of $42,300, interest expense of $20,400, and a tax rate of 21 percent. What is the net income for the firm? Suppose the

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