Question 1

ElectroWizard Company produces a popular video game called Destructo, which sells for $32. Last year ElectroWizard sold 50,000 Destructo games, each of which costs $6 to produce. ElectroWizard incurred selling and administrative expenses of $80,000 and amortization expense of $10,000. In addition, ElectroWizard has a $100,000 loan outstanding at 12%. Its tax rate is 40%. There are 100,000 common shares outstanding.
Prepare an income statement for ElectroWizard in good form (include EPS).

Accepted Answer

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Question 2

Calculate the tax bill for a corporation that earned $250,000 in 20X5 in Manitoba as a manufacturer.

Accepted Answer

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Question 3

The following is the December 31, 20X4 balance sheet for Epics Corporation.
  Sales for 20X5 were $2,000,000, with the cost of goods sold being 55% of sales. Amortization expense was 10% of the gross plant and equipment at the beginning of the year. Interest expense was 9% on the notes payable and 11% on the bonds payable. Selling, general, and administrative expenses were $200,000 and the firm's tax rate is 40%.
A) Prepare an income statement.
B) If the dividend payout ratio for Epics is 35%, what is the value of the retained earnings account on December 31, 20X5?

Accepted Answer

The answer of The following is the December 31, 20X4...

Question 4

Two-by-Four Wood Products (TBF) report net income of $2 per share in its most recent financial statements. If TBF has no preferred shares outstanding and the market price of its stock is $4 what is TBF's P/E ratio?

Accepted Answer

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Question 5

Calculate the after tax cost of the interest. Assume the company has issued 10,000 bonds with a coupon rate of 8% and a face value of $1,000 per bond, and the company has a marginal tax rate of 42%.

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Question 6

Blink and Wink (BW) manufactures contact lens. In its most recent fiscal year BW reported after-tax interest expense on a new bond issue of $550,000. If BW's effective tax rate is 35%, what was the firm's before tax interest expense?

Accepted Answer

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Question 7

Cool Ties and Things (CTT) has Total Shareholder's Equity of $350,000. CTT issued $85,000 in preferred stock two years ago. If CTT has 37,000 shares issued and outstanding what is CTT's book value per share?

Accepted Answer

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Question 8

Valley Home Improvements (VHI) earned $350,000 after taxes in its most recent fiscal year. If VHI's Board of Directors declared a total of $45,000 in preferred dividends what would be the total amount available to pay common shareholders?

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Question 9

Jane is considering an investment in Fauna Flowers (FF). FF is trading at $33 a share. It the company's current dividend is $1.50 a share, what is FF's dividend yield?

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Question 10

Given the financial information for the
A.E. Neuman Corporation,
A) Prepare a Statement of Cash Flows for the year ended December 31, 20X5.
B) What is the dividend payout ratio?
C) If we increased the dividend payout ratio to 100%, what would happen to retained earnings?

Accepted Answer

The answer of Given the financial information for the
A.E. Neuman...

Quiz 2: Review of Accounting