QUESTIONS: (2-3) Little Books Inc. recently reported $3m of net income. Its EBIT was $6m‚ and its tax was 40%. What was its interest expense? ANSWER: Net Income $3 Million EBIT $6 Million Divided by 0.6 Less IBT $5 Million Income before Taxes $5 Million Interest Expense $1 Million **Interest Expense = $1M** (2-7) The Talley Corporation had a taxable income of $365‚000 from operations after all operating costs but before (1) interest charges
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Class Discussion 1. Dartmouth Inc’s latest net income was $1‚250‚000‚ and it had 225‚000 shares outstanding. The company wants to pay out 45% of its income. What dividend per share should it declare? 2. Garcia Industries has sales of $200‚000 and accounts receivable of $18‚500‚ and it gives its customers 25 days to pay. The industry average DSO is 27 days‚ based on a 365-day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the
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Chapter 3 The Balance Sheet and Financial Disclosures Questions for Review of Key Topics Question 3-1 The purpose of the balance sheet‚ also known as the statement of financial position‚ is to present the financial position of the company on a particular date. Unlike the income statement‚ which is a change statement that reports events occurring during a period of time‚ the balance sheet is a statement that presents an organized array of assets‚ liabilities
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Chapter 12 Statement of Cash Flows True / False Questions 1. Interest and dividends from investments held by a company are reported as cash inflows from investing activities on the statement of cash flows. True False 2. Under the indirect method‚ changes in current assets are used in determining cash flows from operating activities and changes in current liabilities are used in determining cash flows from financing activities. True False 3. Using the indirect method‚ the increase
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1．A firm has net working capital of $640. Long-term debt is $4‚180‚ total assets are e $6‚230‚ and fixed assets are $3‚910. What is the amount of the total liabilities? Current assets: 6230-3910=2320 Current liabilities: 6230-39102320-640=1680 Total liabilities: 1680+4180=5860 2. Kaylor Equipment Rental paid $75 in dividends and $511 in interest expense. The addition to retained earnings is $418 and net new equity is $500. The tax rate is 35 percent. Sales are $15‚900 and depreciation is
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Milli Drexler ACC220 July 29‚ 2012 Accounting Documents A balance sheet is used by accounting departments to show a company their financial position at the end of a specified date. It is often called a snapshot of a company’s financial position at a given moment. It gives the reader of the document a clear picture of all transactions that have been posted by that company as of a specific date. When accountants prepare a balance sheet they list the company’s assets at the time. Assets are things
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6/23/2014 FINANCIAL STATEMENTS The Hidden Road to Wealth Learning Expection Review accounting basics to understand the information on the financial statements Appreciate the essence of the Financial Statement Understand the component of the Income Statement and the Balance Sheet Determine how Income Statement and Balance Sheet are use in making financial decision 1 6/23/2014 BASIC Terms • FINANCIAL STATEMENT represent a formal record of the financial activities of
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charged $3‚635‚223 depreciation on the income statement of Andrews. Andrews plans to make investment that will increase this depreciation to take advantage of changes in the tax code. Will this?a. Decrease net cash from operations on the cash flow statementb. Increase net cash from operations on the cash flow statementc. Just impact the balance sheet.d. Have no impact on the net cash from operations as depreciation appears in both cash flow and income statementAnswer | Selected Answer:
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into the US intercity bus market‚ what advantages and disadvantages does Megabus have? Megabus being a late mover in the US‚ has allowed the company to learn from past mistakes by companies such as Greyhound‚ who filed for bankruptcy in the mid 90’s and who lost most of it’s business due to poorly maintained terminals‚ high prices for fares and unsafe conditions. Megabus’s advantages include fares as lows as 1 dollar‚ free wi-fi‚ stylish buses and power outlets. They Can offer these low fares since
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ZARA Income Statement Period Ending: 2012 31/12 2011 31/12 2010 31/12 2009 31/12 Total Revenue 82.98 78.19 89.69 76.7 Revenue 82.98 78.19 89.69 76.7 Other Revenue‚ Total - - - - Cost of Revenue‚ Total 60.29 56.72 59.02 52 Gross Profit 22.69 21.47 30.67 24.7 Total Operating Expenses 77.61 73.35 74.12 63.51 Selling/General/Admin. Expenses‚ Total 3.69 3.24 3.96 3.56 Research & Development - - - - Depreciation / Amortization 13.63 13.38 11.14 7
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