Balance Sheet and Net Income
Constructing a balance sheet of Sophie’s sofas:
Cash balances: $10,000
Inventory of sofas: $200,000
Store and property: $100,000
Accounts receivable: $22,000
Accts payable: $17,000
Long-term Debt: $170,000
Balance sheet of (insert name)
Assets Liabilities & Shareholders equity cash $10,000 accounts payable $17,000
Accounts receivable $22,000 Long term debt $170,000
Inventory $200,000 Shareholders equity $145,000
Store and Property $100,000 _______ ________
Total assets: $332,000 Total liab. & S.H Equ. $332,000
What would be the marginal and average tax rates for a corporation with an income level of $100,000?
Taxes = (0.15 × $50,000) + 0.25 × ($75,000 − $50,000) + 0.34 × ($100,000 − $75,000) = $22,250
Marginal tax rate = 34%
Average tax rate = $22,250/$100,000 = 0.2225 = 22.25%
The year-end 2010 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $1,100,000 and retained earnings at $3,400,000.
The next year, retained earnings were listed at $3,700,000. The firm’s net income in 2011 was $900,000. T here were no stock repurchases during the year. What were the dividends paid by the firm in 2011?
Net income = increase in retained earnings + dividends
$900,000 = ($3,700,000 − $3,400,000) + dividends dividends = $600,000
The founder of Alchemy Products, Inc., discovered a way to turn lead into gold and patented this new technology. He then formed a corporation and invested $200,000 in setting up a production plant. He believes that he could sell his patent for $50 million. What are the book value and market value of the firm? Book value: 200,000, market value= 50,200,000
If there are 2 million shares of stock in the new corporation, what would be the price per share and the book value per share? Price per share= 50.2miilion/2 million shares=$25.10 Book value per share = 200,000/2 million shares= .10
Sheryl’s Shipping had sales last year of $10,000. The cost of goods sold was $6,500, general and administrative
Cash balances: $10,000
Inventory of sofas: $200,000
Store and property: $100,000
Accounts receivable: $22,000
Accts payable: $17,000
Long-term Debt: $170,000
Balance sheet of (insert name)
Assets Liabilities & Shareholders equity cash $10,000 accounts payable $17,000
Accounts receivable $22,000 Long term debt $170,000
Inventory $200,000 Shareholders equity $145,000
Store and Property $100,000 _______ ________
Total assets: $332,000 Total liab. & S.H Equ. $332,000
What would be the marginal and average tax rates for a corporation with an income level of $100,000?
Taxes = (0.15 × $50,000) + 0.25 × ($75,000 − $50,000) + 0.34 × ($100,000 − $75,000) = $22,250
Marginal tax rate = 34%
Average tax rate = $22,250/$100,000 = 0.2225 = 22.25%
The year-end 2010 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $1,100,000 and retained earnings at $3,400,000.
The next year, retained earnings were listed at $3,700,000. The firm’s net income in 2011 was $900,000. T here were no stock repurchases during the year. What were the dividends paid by the firm in 2011?
Net income = increase in retained earnings + dividends
$900,000 = ($3,700,000 − $3,400,000) + dividends dividends = $600,000
The founder of Alchemy Products, Inc., discovered a way to turn lead into gold and patented this new technology. He then formed a corporation and invested $200,000 in setting up a production plant. He believes that he could sell his patent for $50 million. What are the book value and market value of the firm? Book value: 200,000, market value= 50,200,000
If there are 2 million shares of stock in the new corporation, what would be the price per share and the book value per share? Price per share= 50.2miilion/2 million shares=$25.10 Book value per share = 200,000/2 million shares= .10
Sheryl’s Shipping had sales last year of $10,000. The cost of goods sold was $6,500, general and administrative