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11 days ago

Jon Sports' inventory account increased from $25,000 on December 31, 2013, to $30,000 on December 31, 2014. Which one of the fol

lowing items would be included in the operating section of its 2014 indirect method statement of cash flows?

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Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common

harina [3808]

Response: a. $18,000

Clarification:

Cumulative Preferred Shares are types of shares whereby the company consistently pays Preferred dividends and if it cannot do so in any given year, the unpaid amount accumulates until they can pay it later.

In the question posed, the dividends owed to Preferred Shares are calculated as follows:

= 4% * 200,000

= $8,000

In the first year, $8,000 was allocated for dividends.

= 8,000 - 8,000

= 0

This implies that there are no preferred dividends owed from Year 1.

In Year 2, $18,000 was declared for dividends,

= 18,000 - 8,000

= $8,000

This indicates that in Year 2, the company managed to fulfill its Preferred dividends and still had funds available to distribute to Common Shareholders.

In Year 3, $24,000 was dedicated to dividends.

= 24,000 - 8,000

= $16,000

Therefore, in year 3, the company had enough funds to cover its Preferred Dividend commitments, meaning it paid out all of the $8,000 due to the Preferred Shareholders.

6 0

1 month ago

The 20% off sale is a better deal than the $200 rebate or $150 coupon for the $1,500 dining set. the porters budgeted $1,250 for

stepan [3596]

Result:

The result is $ 300

Reasoning:

When we subtract 1,500 from 1,200, the result is 250; however, the calculation of multiplying (1,500) by (.20) yields 300, which corresponds to similar pressure.

5 0

2 months ago

Read 2 more answers

Allo Foundation, a tax-exempt organization, invested $200,000 in cost-saving equipment. The equipment has a five-year useful lif

harina [3808]

Answer:

Net Present Value = $ 34,310.45

Explanation:

The Net Present Value (NPV) represents the difference between the present value of cash inflows and outflows. A positive NPV indicates a favorable investment decision, while a negative value suggests otherwise.

NPV of a project

NPV = Present Value of Cash inflows - Present Value of Cash outflow

The cash inflow is characterized as an annuity.

Present Value of annuity= A × 1 - (1+r)^(-n)/r

A refers to Annual cash flow, - 65,000, r is the discount rate at 12%, and the term is 5 years.

Calculation for Present Value of cash inflow equals 65,000 × (1 - (1.12)^(-5)/0.12) = 234,310.45.

The initial investment is 200,000.

Thus, the Net Present Value calculation is - 234,310.45 -200,000 = 34,310.45

Net Present Value = $ 34,310.45

4 0

2 months ago