Owners of a business are contemplating investing $550,000 in non-current assets in early January 2014. They are exploring ways to finance it. In 2012, the company had $250,000 in trade receivables, an amount that it expects will increase to $275,000 in mga od 2013. The inventory level for 2012 was $430,000 and, having introduced a new ( 10 inventory management system, the owners expect to be more efficient in managing it. They forecast a level of $370,000 in inventories by the end of 2013. They expect a substantial increase in revenue, which will increase their profit from $150,000 in 2012 to $230,000 in 2013. of torq sihat ob blow Questions 1. How much cash will be generated from internal operations by the end Learn of 2013? 2. Will the owners have to borrow money from investors to finance the expansion? If yes, how much?

Owners of a business are contemplating investing $550,000 in non-current assets in early January 2014. They are exploring ways to finance it. In 2012, the company had $250,000 in trade receivables, an amount that it expects will increase to $275,000 in mga od 2013. The inventory level for 2012 was $430,000 and, having introduced a new ( 10 inventory management system, the owners expect to be more efficient in managing it. They forecast a level of $370,000 in inventories by the end of 2013. They expect a substantial increase in revenue, which will increase their profit from $150,000 in 2012 to $230,000 in 2013. of torq sihat ob blow Questions 1. How much cash will be generated from internal operations by the end Learn of 2013? 2. Will the owners have to borrow money from investors to finance the expansion? If yes, how much?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2024, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25 %. Income before Income Tax FIFO Average Cost Difference Before 2023 $ 23 million $ 16 million $ 7 million 2023 24 million 13 million 11 million 2024 18 million 17 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2024-2023 comparative income statements. 4. Indicate the affect of the change in the 2024-2023 comparative statements of shareholders' equity assuming cash dividends were $6.00 million each year and that no dividends were paid prior to 2023.
Jace Furnishings has $325 million in sales. The company expects that its sales will increase 8% this year. Jace's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows: Inventories = $30 + 0.105(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what are your forecasts of the company's year-end inventory level? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Do not round intermediate calculations. Round your answer to the nearest dollar.$ What are your forecasts of the company's year-end inventory turnover ratio? Do not round intermediate calculations. Round your answer to two decimal places. x
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During a recession, a manufacturing company using a perpetual inventory system wrote down its inventory that cost $5.0 million to the net realizable value of $4.5 million. Two years later this inventory was still available for sale; however, its net realizable value had increased to $5.5 million. Using the LCNRV rule, what is the correct journal entry to record this change in value? Select answer from the options below Debit: Cost of Goods Sold, $1 million; Credit: Gain on Inventory Valuation, $1 million Debit: Inventory, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Gain on Inventory Valuation, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Inventory, $1 million; Credit: Gain on Inventory Valuation, $1 million
Winnebago Industries, Inc. is a leading manufacturer of motor homes. Suppose Winnebago reported ending inventory at August 29, 2022, of $45,343,000 under the LIFO inventory method. In the notes to its financial statements, assume Winnebago reported a LIFO reserve of $31,400,000 at August 29, 2022.What would Winnebago Industries' ending inventory have been if it had used FIFO? 2022 ending inventory assuming FIFO
In preparation for significant expansion of its international operations, Pharoah Co. has adopted a plan to gradually shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). Pharoah decides to make the switch to FIFO at January 1, 2020. The following data pertains to Pharoah’s 2020 financial statements (in millions of dollars). Sales $ 580 Inventory purchases 380 12/31/20 inventory (using FIFO) 610 Compensation expense 20 All sales and purchases were with cash. All of 2020’s compensation expense was paid with cash. (Ignore taxes.) Pharoah’s property, plant, and equipment cost $ 430 million and has an estimated useful life of 10 years with no salvage value.Pharoah Co. reported the following for fiscal 2019 (in millions of dollars): (See Image a) Summary of Significant Accounting PoliciesInventory: The company accounts for…
Inventory Management Williams & Sons last year reported sales of $50 million, cost of goods sold (COGS) of $40 million, and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.
Required: 1. Determine the amount of net income that International Paper would have reported in 2017 if it had used the FIFO method (assume a 30 percent tax rate). (Enter your answer in millions. Round your intermediate and final answer to 1 decimal place.) Net income million
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Inventory Management Williams & Sons last year reported sales of $26 million, cost of goods sold (COGS) of $20 million, and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar. $
Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2024, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 25%. Income before Income Tax FIFO Average Cost Difference Before 2023 $ 34 million $ 27 million $ 7 million 2023 46 million 24 million 22 million 2024 29 million 28 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 2024–2023 comparative income statements. 4. Indicate the affect of the change in the 2024–2023 comparative statements of shareholders’ equity assuming cash dividends were $11.50 million each year and that no dividends were paid prior to 2023.

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