FASB Codification Assignment 1 – Receivables You are spending your summer working for a local wholesale furniture company‚ Beds and Beyond‚ Inc. The company is considering a proposal from a local financial institution‚ Old Faithful Financial‚ to factor Bed and Beyond’s receivables. The company controller is unfamiliar with the most recent FASB pronouncement that deals with accounting for the transfer of financial assets and has asked you to do some research. The controller wants to make sure
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ACCT101 project Case5-3 1. Electric utility bills Method 1: As everyone knows‚ the electricity meters can be read every month. Therefore‚ in December the company will know the electricity usage of the former 12 months including that of December last year. And the usage of electricity in December this year can be included in the next year’s revenue. Method 2: Strictly speaking‚ the revenue recognized in method 1 is not earned in THIS YEAR. through the method of estimating the electricity usage
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nineteenth century. The historical case of Roe vs. Wade‚ changed the social and legalistic views of abortion in America. During colonial America‚ the word abortion was not to be spoken out loud‚ but over the centuries‚ it has been spoken the loudest on the social and political platforms of America. The historical case of Roe vs. Wade did not give women the right to abortion; women already had the right. It only protects the rights of the women to do such act. Roe did much more than establish the right
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5% Net income increment (after machines) EUR 33‚000 Before machines: ROE = Net income / Common equity Common equity = Assets – Liabilities Liabilities = Assets x Debt-to-total-assets ratio Liabilities = 197‚500 x 37.5% Liabilities = EUR 74‚062.5 Common equity = 197‚500 – 74‚062.5 Common equity = EUR 123‚437.5 ROE = 19‚575 / 123‚437.5 ROE = 15.86% After machines: ROE = 33‚000 / 123‚437.5 ROE = EUR 26.73% ROE shall be improved after buying the machines from 15.86% to 26.73%. Improvement
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Wm. Wrigley Jr. Company: A Recapitalization Strategy Development Team: Sam Posnick Emily Booth Alex Fabisiak Sam Zarat 1 2 Scenarios To create a successful recapitalization plan‚ the group analyzed multiple scenarios and determined the appropriate level of debt to issue for the William Wrigley Jr. Company (referred to as Wrigley). The chosen capital structure is based on efforts to minimize the Weighted Average Cost of Capital (WACC) while also reducing increases in the cost of equity
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Kenneth Edelin is a third year resident at Boston City Hospital in Massachusetts. His supervisor‚ Hugh Holtrop‚ assigned him to do an abortion for a seventeen-year-old girl named Alice Roe. Ms. Roe and her mother signed a consented to carry out the abortion. Edelin performs a Caesarean surgery because it was safer for Ms. Roe’s health. While performing the surgery‚ Edelin had to prolong the surgery three minutes after the placenta was removed‚ so he could cut off any supply to the fetus. Then he
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The main purpose of the analysis is to find out whether Linear Technology should increase its dividend payout. Linear Technology’s Payout Policy The payout policy of Linear Technology can be concluded into two elements: dividend payment and repurchase activities. To maintain competitiveness‚ Linear paid a dividend for about 10 years. It first initiated a quarterly dividend of $0.00625 per share in 1993. The payout ratio is closer to 25% to 30% consistently during these years. Dividend yields
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a. the use of debt financing leverages up ROE from 12.0 percent to 19.2 percent; total dollars returned to investors (including both stockholders and creditors)increased from $600‚000 to $680‚000; and the “extra” $80‚000 came from the “taxman‚” as taxes are reduced by that amount b. ROE 12.0%/15.0% c. At 20% ROE is 6.0 % At 0.6% ROE is 12.0% At .20 % ROE is 18.0 % The lesson is that although the use of leverage increases expected ROE‚ it also increases the riskiness to stockholders
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Chapter 158 Distributions to Shareholders: Dividends and Repurchases ANSWERS TO END-OF-CHAPTER QUESTIONS 158-1 a. The optimal distribution policy is one that strikes a balance between dividend yield and capital gains so that the firm’s stock price is maximized. b. The dividend irrelevance theory holds that dividend policy has no effect on either the price of a firm’s stock or its cost of capital. The principal proponents of this view are Merton Miller and Franco Modigliani (MM). They
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announcing dividends and then continued onto repurchasing. Linear started dividends to gain the respect of investors as well as show that buying shares in the company of Linear was less risky than all the other technology companies. Additionally‚ they repurchase stocks to offset the employee stock options that the company had as a large component of the employee compensation‚ which helped Linear in the years of low or slow sales. As stated in the case description‚ Linear has a strong cash flow as a company
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