Accounting

Solution Library


Computation of Amount of Dividend Stockholders of a Company

Question XYZ Corporation declared the regular quarterly dividend of $2 per share. XYZ had issued 12,000 shares and subsequently reacquired 2,000 shares as treasury stock. What would be the total amount of the dividend? Summary This question belongs to accounting and discusses about computation to ... Read More

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Effect on the Accounting Equation when a Stock Dividend is Declared and Distributed

Question What is the effect on the accounting equation when a stock dividend is declared? What is the effect on the accounting equation when a stock dividend is distributed? Summary This question belongs to accounting and discusses about effect on the accounting equation when a stock dividend is ... Read More

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Preparation of Journal Entries to Record the given Transactions

Question Kelly Company issued 10,000 shares of $20 par value common stock at $24 per share. Prepare journal entries to record the following transactions: Kelly reacquired 1,000 shares of its own stock at a cost of $30 per share. Kelly reissues 500 shares of the treasury stock in (A) for $36 pe ... Read More

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Two Main Elements of Stockholders’ Equity in a Corporation

Question What are the two main elements of stockholders’ equity in a corporation? Explain the difference between them. Summary This question belongs to accounting and discusses about the two main elements of stockholders’ equity in a corporation and the difference between them. Total ... Read More

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Calculation of Retained Earnings of a Company

Question Vindaloo Corporation reported retained earnings of $400 on its year-end 2002 balance sheet.  During 2003, the company reported a loss of $40 in net income, and it paid out a dividend of $60. We will calculate retained earnings for Vindaloo's 2003 year-end balance sheet. Summary This ... Read More

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Calculation of Profit Margin of a Company

Question A firm has an ROA of 8%, sales of $100, and total assets of $75. Calculate its profit margin. Summary This question belongs to accounting and discusses about calculation of profit margin for a company. Total word count: 30   ... Read More

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Calculation of Maximum Sustainable Growth Rate of a Company

Question Given the following information: profit margin = 10%; sales = $100; retention ratio = 40%; assets = $200; equity multiplier = 2.0.  If the firm maintains a constant debt-equity ratio and no new equity is used, what is the maximum sustainable growth rate (SGR)?  (Assume a constant ... Read More

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Violation of Stock Market Efficiency

Question Your brother-in-law invests in the stock market and doubles his money in a single year while the market, on average, earned a return of only about 15%,  here a discussion is done whether  your brother-in-law’s performance a violation of market efficiency or not. Summary T ... Read More

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Calculation of Effective Annual Rate of a Loan Payment

Question Iggie's Used Cars will sell you a 2002 Suzuki Aerio for $3,000 with no money down.  You agree to make weekly payments of $40 for two years, beginning one week after you buy the car.  What is the EAR of this loan? Summary This question belongs to accounting and discusses about c ... Read More

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Calculation of Discounted Payback Period and Net Present Value

Question Rebus Company is trying to make a decision between two projects. Their calculations are as below. PROJECT A PROJECT B Cash inflow cumulative cash inflow Cash inflow cumulative cash inflow 8500 8500 6500 6500 9000 1 ... Read More

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Calculation of Maximum Increase in Sales the Firm can Achieve

Question Assets Amount 25% 90% capacity of actual Cash 50 62.5 45 Inventory 150 187.5 135 FA 600 750 540 Total 800 1000 720 Liability Amount 25% Account ... Read More

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Calculation of Present Value of CCA Tax Shield and Depreciation Tax Shield of a company

Question The managers of Magma International, Inc.  plan to manufacture engine blocks for classic cars from the 1960s era.  Certain values are given. Calculate following things. 1) Depreciation tax shield in the third year for this project (Nissim, 2002). CCA at 30% = Machinery Cost*30% ... Read More

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