Ch. 4 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 4-1 STARR CO. Income Statement For the Year 2010 Revenues Sales $540‚000 Expenses Cost of goods sold $330‚000 Wage expense 120‚000 Other operating expenses 10‚000 Income tax expense 25‚000 Total expenses 485‚000 Net income $55‚000 Earnings per share $0.55* *$55‚000 ÷ 100‚000 shares. Note: The increase in value of the company reputation and the unrealized
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the matching principle is important.There is a cause-and-effect relationship between revenue and expense recognition. The result is a measure—net income—that matches current period accomplishments (revenues) and sacrifices (expenses). | | LO1 | 4. | | Describe when revenues and expenses are recognized using cash-basis accounting. How does this differ from accrual-basis accounting?Under cash-basis accounting‚ we record revenues at the time we receive cash and expenses at the time we pay cash
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based on an analysis of the fair values of the interests in the legal entity. 4. The activities of the legal entity are primarily related to securitizations or other forms of asset-backed financings or single-lessee leasing arrangements. 2.) Even though the investment risk is greater than 10% of the total assets for LeaseMed‚ you still have to demonstrate that the equity is sufficient to permit the legal entity to finance its own activities according to ASC 810-10-25-45a‚b‚c. LeaseMed does not
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Letersky Altvater Altvater Aiken 3. Before any row can be entered in the SECTION table‚ the COURSE_ID to be entered must already exist in the COURSE table. Write an SQL assertion that will enforce this constraint. 4. Write SQL definition commands for each of the following queries: a. How would you add an attribute‚ CLASS‚ to the STUDENT table? b. How would you remove the IS_REGISTERED table? c. How would you change the field for FACULTY_NAME from 25
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1. How much of our global energy supply do nuclear power‚ biomass energy‚ and hydroelectric power contribute? How much of our global electricity do these three conventional energy alternatives generate? Biomass provides 10.8% of global primary energy use‚ nuclear power provides 6.5%‚ and hydropower provides 2.2% of global primary energy use. Nuclear power generates 15.8% of the world’s electricity‚ and hydropower generates 15.9%. 2. Describe how nuclear fission works. How do nuclear plant engineers
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= -2.174‚ c = .461‚ and d = 1.909‚ 1. Determine the price elasticity of demand. =-2.174 2. Determine the income elasticity of demand. = 0.461 3. Determine the cross price elasticity of demand =1.909 4. How would you characterize the demand for haddock? -2.175 = demand is elasticity as it is more than 1 0.461=if income went up 1% its effect is minimum. 1.909=if price elasticity is 1.909 it will effect haddock. 5. Suppose
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P0 P1/D1 Pt/Dt Rate of Return of Stock r = (D1 + P1)/P0 - 1 Given annual growth rate g1‚ g2‚ then g3 remained constant forever: Di = Di-1*(1+r) P2 = D3 /(R-g) P0 = D1 /(1+r)+ (D2+P2)/(1+r)2 Variation: quarterly basis Di = Di-1*(1+r)4 P2 = D3 /(R-g/4) Variation2: Change of Growth Find the R before Change: P0 = D1 /(R+g) Use it to find future P P1 = D2 /(R+gnew) Bond Repayment = total bond*(face value + last payment price) Efficient Market -Stock prices fully reflect available information
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CHAPTER 2 How to Calculate Present Values Answers to Problem Sets 1. If the discount factor is .507‚ then .507*1.126 = $1 2. 125/139 = .899 3. PV = 374/(1.09)9 = 172.20 4. PV = 432/1.15 + 137/(1.152) + 797/(1.153) = 376 + 104 + 524 = $1‚003 5. FV = 100*1.158 = $305.90 6. NPV = -1‚548 + 138/.09 = -14.67 (cost today plus the present value of the perpetuity) 7. PV = 4/(.14-.04) = $40 8. a. PV = 1/.10 = $10 b. Since the perpetuity
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1. List at least five reasons why people visit Web sites. • Learn about products or services that the company offers • Buying products or services that the company offers • Obtaining information about warranty‚ service‚ or repair policies for products purchased • Obtaining general company or organization information • Obtaining financial information for making an investment in the compnay or organization • Identifying the people that manage the organization • Obtaining contact information
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sold = 1400000 PROBLEM:05 Study the comparative balance sheets for Kyprianides Inc. and Pecchia Company in the year 2011. Notice that both companies have the same amount of assets. However‚ there are some differences in the way the two companies finance those assets. Fill in the spaces on the balance sheets and then answer the following questions. Kyprianides Inc. Pecchia Co. Current Assets Cash and equivalents 200 300 Accounts Receivable 1‚100 2‚400 Inventory
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