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##### BUSI-320 Corporate Finance-2013 Fall-B (Moten) Exam-1

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Question;3.Problem 2-6 Income statement [LO1];Given the following information;prepare an income statement for the Dental Drilling Company. (Input all amounts as positive values. Omit the;$" sign in your response.);Selling and;administrative expense;$;73,000;Depreciation expense;78,000;Sales;521,000;Interest expense;48,000;Cost of goods sold;200,000;Taxes;47,000;6.Problem 2-15 Development of balance sheet;[LO3];Arrange the following items in;proper balance sheet presentation (Be sure to;list the assets in order of their liquidity. Input all amounts as positive;values. Omit the "$" sign in your response);Accumulated;depreciation;$;309,000;Retained earnings;187,000;Cash;14,000;Bonds payable;136,000;Accounts receivable;54,000;Plant and;equipment?original cost;775,000;Accounts payable;35,000;Allowance for bad;debts;9,000;Common stock, $1 par;100,000 shares outstanding;100,000;Inventory;70,000;Preferred stock, $59;par, 1,000 shares outstanding;59,000;Marketable securities;24,000;Investments;20,000;Notes payable;34,000;Capital paid in excess;of par (common stock);88,000;9. Problem 2-18 Price-earnings ratio [LO2];Botox Facial Care had earnings;after taxes of $364,000 in 2009 with 200,000 shares of stock outstanding. The;stock price was $93.80. In 2010, earnings after taxes increased to $424,000;with the same 200,000 shares outstanding. The stock price was $133.00.;(a);Compute earnings per share and the;P/E ratio for 2009. The P/E ratio equals the stock price divided by earnings;per share. (Enter only numeric values.Round;your intermediate calculations and final answers to 2 decimal;places. Omit the "$" sign in your response.);Earnings per share;$;P/E ratio;(b);Compute earnings per share and the;P/E ratio for 2010.(Enter only numeric;values.Round your intermediate calculations and final answers to 2 decimal;places. Omit the "$" sign in your response.);Earnings per share;P/E ratio;(c);Why the P/E ratio changed?(Round your intermediate calculations and final answers to;2 decimal places. Omit the;%" sign in your response.);10.Problem 2-21 Depreciation and cash flow [LO5];The Jupiter Corporation has a;gross profit of $789,000 and $249,000 in depreciation expense. The Saturn;Corporation also has $789,000 in gross profit, with $46,600 in depreciation;expense. Selling and administrative expense is $216,000 for each company.;(a);Given that the tax rate is 40;percent, compute the cash flow for both companies.(Omit the "$" sign in your response.);Jupiter;Saturn;Cash flow;$;$;(b);What is the difference in cash;flow between the two firms? (Omit the;$" sign in your response.);Difference in cash;flow;$;12.Problem 2-24 Book value and market value [LO2;3];The Rockford Corporation has;assets of $444,000, current liabilities of $51,000, and long-term liabilities;of $71,000. There is $35,500 in preferred stock outstanding, 20,000 shares of;common stock have been issued.;(a);Compute book value (net worth) per;share.(Round your answer to 2 decimal;places. Omit the "$" sign in your response.);Book value per share;$;(b);If there is $25,700 in earnings;available to common stockholders and Rockford?s stock has a P/E of 19 times;earnings per share, what is the current price of the stock?(Do not round intermediate calculations. Round your answer;to 2 decimal places. Omit the "$" sign in your response.);Current price;$;(c);What is the ratio of market value;per share to book value per share? (Do not;round intermediate calculations. Round your answer to 2 decimal places.);Ratio;13.Problem 2-25 Book value and market value [LO2;3];Amigo Software, Inc., has total;assets of $824,000, current liabilities of $164,000, and long-term;liabilities of $133,000. There is $83,000 in preferred stock outstanding.;Thirty thousand shares of common stock have been issued.;(a);Compute book value (net worth) per;share.(Round your answer to 2 decimal;places. Omit the "$;sign in your response.);Book value per share;$;(b);If there is $53,000 in earnings;available to common stockholders and the firm?s stock has a P/E of 28 times;earnings per share, what is the current price of the stock?(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit;the "$" sign in your response.);Current price;$;(c);What is the ratio of market value;per share to book value per share? (Do not;round intermediate calculations. Round your answer to 2 decimal;places.);Ratio

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