Accounting Answers

. Blue Enterprises paid a Birr 2.50 per share dividend on 100,000 shares of common stock and Birr 4 per share dividend on 25,000 shares of preferred stock. Net income for the year was Birr 850,000. The current market price of the common stock is Birr 52.50 a) Calculate the earnings per share of common stock. c) Calculate the dividend payout ratio of common stock d) Calculate the dividend yield of common stock

6. Complete the following financial statements of Omega Company on the basis of the ratios given below. Omega Company Profit and loss account For the year ended June 30 2001 Sales 2,000,000 Cost of Goods Sold 600,000 Gross Profit 1,400,000 Operating Expenses 1,190,000 Earnings Before Interest and Tax A Debenture Interest 10,000 Income Tax B Net Profit C Omega Company Balance sheet For the year ended June 30 2001 Assets Liabilities Cash D Sundry creditors 60,000 Stocks E 10% Debentures I Debtors 35,000 Total liabilities J Total Current Assets F Reserve and Surplus K Fixed Assets G Share Capital L Total Assets H Total Liability and Equity M Additional Information: A. Net Profit to Sale 5%     D. Inventory Turnover 15 times B. Current Ratio  1.5     E. Share Capital to Reserve 4:1 C. Return on Net Worth  20 %   F. Tax Rate  50 %  

 1. Use the following information to answer questions Lite Products, Inc. is considering investing in either of two competing projects that will allow the firm engineering department narrowed the alternatives down to two- Status Quo (SQ) and High Tech estimates of the cash flows for SQ and HT over the relevant six-year time horizon. The firm has an 11 percent required return and views these projects as equally risky. Project SQ     Project HT Initial Outflow (CFo)   $670,000  $940,000 Year (t)                             Cash Inflows (CFt)   1    $250,000  $170,000   2   200,000  180,000   3    170,000  200,000 4    150,000  250,000 5    130,000  300,000 6    130,000  550,000 A. Based on the information given above, calculate the net present value (NPV) for each asset respectively. (Round to the nearest four decimal points or use table value).B. Which asset is best, using the NPV? 

products corporations have the following capital structure, which it considers optimal: Bonds, 7% (at par)                    Br 300,000   Preferred stock, Br.5                    240,000 Common stock                        360,000 Retained earnings                      300,000                                                   1,200,000 

Ifesinachi started business on 1/1/99 with the following:

Building                N 100,000

Stock of goods N 40,000

Motor van N 50,000

Cash N 10,000

During the month, he undertook the following transaction

5/1/99 Sold goods for cash   N 5, 000

10/1/99 Sold goods on credit N 20, 000

12/1/99 Bought goods on credit N 10, 000

15/1/99 Cash sales banked N 15, 000

18/1/99 Paid cash for office stationery N 2, 000

20/1/99 Received cash from debtors for goods N 5, 000

22/1/99 Paid cash for office expenses N 1, 000

23/1/99 Paid salaries by cheque N 4, 000

24/1/99 Sold goods for cash N 7, 000

25/1/99 Sold goods on credit N 5, 000

26/1/99 Bought goods on credit N 3, 000

27/1/99 Bought goods for cash N 2, 500

28/1/99 Withdrew money from bank for owner’s use N 1, 500

29/1/99 Office cash banked N 5, 000

31/1/99 Paid electricity by cheque N1, 500

Required to record the above transactions in the appropriate books of original entry and post them to the ledger.

ABC Company

Balance Sheet

December 31, 20x3

ASSETS

Current assets:

Cash Br. 10, 000

Account receivable 52,500

Merchandise inventory 48, 000

Unexpired insurance 1, 800 Br.112, 300

Plant assets:

Equipment, fixture and other Br.37, 000

Accumulated depreciation 12, 800 24, 200

Total assets Br.136,500

LIABILITIES AND OWNERS’ EQUITY

Liabilities:

Accounts payable Br.16, 800

Accrued wages and commissions payable 4, 250 Br.21, 050

Capital:

Owners’ equity 115,450

Total liabilities and owners’ equity Br.136, 500

InInstructions:

2) Using the budget data given above and the schedules you have prepared, construct the fofollowing pro forma financial statements

a. Income statement for the first quarter of the year.

b. Cash budget including receipts, payments, and effect of financing

ABC Company

Balance Sheet

December 31, 20x3

ASSETS

Current assets:

Cash Br. 10, 000

Account receivable 52,500

Merchandise inventory 48, 000

Unexpired insurance 1, 800 Br.112, 300

Plant assets:

Equipment, fixture and other Br.37, 000

Accumulated depreciation 12, 800 24, 200

Total assets Br.136,500

LIABILITIES AND OWNERS’ EQUITY

Liabilities:

Accounts payable Br.16, 800

Accrued wages and commissions payable 4, 250 Br.21, 050

Capital:

Owners’ equity 115,450

Total liabilities and owners’ equity Br.136, 500

InInstructions:

1) Using the data given above, prepare the following detailed schedules for the first quarter of the year

a) Sales budget

b) Cash collection budget

c) Purchase budget

d) Disbursement for purchases

e) Operating expenses budget

f) Disbursement for operating expenses

Beatrice Luigi Gomez established a fashion designing service business in Cebu city on December 2021 which she named top 5 best designs set up the following ledger account using T-account and post all the journal entries?

1.Started business with cash rs . 12,00,000

2. Bought Furniture for cash rs . 100000

3. Bought Building for cash Rs. 102000

4 . Bought Good for rs. 140000 on credit from Ahmad .

5. Sold Goods for cash rs.150000

6. Paid salary for RS. 15000.

7. Paid commission for RS . 10000.

8. Received rent for RS . 4000

Recognize above business transactions .

3. Prepare to adjust entries for the following additional information:

a. Uncollectible accounts are estimated to be 3% of Total Revenue.

b. Supplies used for the year amounted to P5,000.00.

c. Rent for 1 month has expired.

d. Insurance for 1 month has expired.

e. Computer equipment has a P1,000.00 salvage value and has an estimated useful life of 3 years.

f. Service vehicle has a 5,000.00 salvage value and has an estimated useful life of 8 years.

g. Office equipment has an estimated useful life of 5 years with no salvage value.

4. Prepare closing entries.

5. Prepare a worksheet. (Unadjusted Trial Balance, Adjusting Entries, Adjusted Trial Balance, Closing Entries, Post-

closing Trial Balance)

6. Prepare the income statement, statement of changes in capital, and balance sheet.