Question 3 36.3 A balance sheet for Cuomo Ltd is to be drawn up from the following information as at 30 September 2020: £ Issued share capital: ordinary shares £1 each Authorised share capital: ordinary shares of £1 each 3.75% loan notes (repayable 30 September 2025) Buildings at cost Motor vehicles at cost 85,000 1,000,000 75,000 730,000 148,000 254,000 Plant & equipment at cost 1 Question 3 Retained profits Share premium account Inventory Accounts receivable General reserve 487,400 115,000 81,800 102,000 90,000 97,300 127,000 87,000 117,000 Accounts payable Accumulated depreciation: Buildings Motor vehicles Plant & equipment Bank (balancing figure for you to ascertain) Corporation tax payable 49,100

Question 3 36.3 A balance sheet for Cuomo Ltd is to be drawn up from the following information as at 30 September 2020: £ Issued share capital: ordinary shares £1 each Authorised share capital: ordinary shares of £1 each 3.75% loan notes (repayable 30 September 2025) Buildings at cost Motor vehicles at cost 85,000 1,000,000 75,000 730,000 148,000 254,000 Plant & equipment at cost 1 Question 3 Retained profits Share premium account Inventory Accounts receivable General reserve 487,400 115,000 81,800 102,000 90,000 97,300 127,000 87,000 117,000 Accounts payable Accumulated depreciation: Buildings Motor vehicles Plant & equipment Bank (balancing figure for you to ascertain) Corporation tax payable 49,100

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question no 3The market price of the ordinary shares at 31 December 2020 was Rs1.60. The dividend yield on ordinary shares was 2.5 per cent. The creditor for taxation at 31 December 2019 was Rs25 000. Taxation paid in the year ended 31 December 2020 amounted to Rs22 000. The liability for taxation on the profit of the year ended 31 December 2020 is Rs31 000 and is carried forward on the Taxation account. The retained profit for the year ended 31 December 2020 was Rs60 000. The debentures were issued in 2016. The preference shares were issued at par. The summarized Balance Sheet at 31 December 2020 of Iqra Ltd was as: Fixed assets 2550000, Net current assets 950000, 6% debentures 2019/2020 150000, Ordinary shares of Rs1, 2500000, 10% redeemable preference shares of Rs1, 300000, Share Premium account 200000 Profit and Loss Account 350000. REQUIRED Prepare Iqra Ltd’s Profit and Loss Account for the year ended 31 December 2020 in as much detail as possible. The Profit and Loss Account…
The extract balance sheet of a company showed the following: 2020 2021 Debentures 10% Share capital £1 each £400,000 £500,000 £750,000 £1,250,000 During the year to 31 December 2021, £100,000 10% debentures were converted to £100,000 ordinary shares. In addition, the company made a bonus issue of shares of £200,000. Finally, a new issue of 200,000 ordinary shares of £1 each was made at a premium of £0.50 per share. The cash flow from financing activities is: Select one answer: O £200,000 O £500,000 O £400,000 O £300,000
Question 2The following Trial Balance is extracted from the books of FW Sdn Bhd as at31 December 20X1:Trial Balance as at 31 December 20X1 Dr CrRM RM20,000 non-redeemable Preference share capital 20,00070,000 Ordinary share capital 70,00010% debentures (repayable 20X8) 30,000Building at cost 110,500Equipment at cost 8,000Motor vehicles at cost 17,200Accumulated depreciation : equipment 1.1.20X1 2,400Accumulated depreciation : motors 1.1.20X1 5,160Inventories 22,690Sales 98,200Purchases 53,910Carriage inwards 1,620Salaries & wages 9,240Directors’ remuneration 6,300Motor expenses 8,120Rates & insurances 2,930General expenses 560Debenture interest 1,500Trade Receivables 18,610Trade Payables 11,370Cash at Bank 8,390General reserve 19,000Interim ordinary dividend paid 3,500Retained earnings: 31.12.20X0 16,940273,070 273,070 The following adjustments are needed:(i) Inventories at 31.12.20X1 were RM27,220.(ii) Depreciation of motor vehicles RM3,000 and equipment RM1,200.(iii)Accrued…
Question Content Area Sorenson Co. is considering the following alternative plans for financing the company: Plan 1 Plan 2 Issue 10% bonds (at face) - $400,000 Issue $10 par common stock $600,000 $200,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $150,000. Round your answers to two decimal places. Earnings Per Common Share Plan 1 $fill in the blank 1 Plan 2 $fill in the blank 2
QUESTION 2Naruto Bakery has a capital structure consisting of:42,000 issued and paid-up ordinary shares RM105,0005,000 issued and paid-up 10% Preference shares RM15,0008% Bonds (10-year maturity) RM30,000The balance of retained earning as at 1 January 2021 was RM75,000. The market priceper unit of the company’s financial instruments are as follows:Ordinary shares : RM2.50 (last dividend paid was RM0.50; growth rate is 5%Preference shares : RM3.008% Bonds : RM890.00 (par value RM1,000)The company is considering to invest in new project worth RM80,000. The floatationcost to sell more shares and bonds are 5%. The corporate tax rate 25%.You are required to calculate (show all workings):b. The company’s cost of debt, preference share, retained earnings and newissuance of ordinary shares.
QUESTION TWO B plc has the following capital structure: K’000Ordinary shares – K0.40 5,000 Retained earnings 500 10% Preference shares at K1 1,500 10% K100 redeemable debentures 3,000 Total funds employed 10,000 The market price of the preference shares is 80n ex-div, the ordinary shares are quoted at K1.62 cum-div per share. Debenture stock is quoted at K97.5 ex-interest per K100 nominal and will be redeemable at par in exactly 7 years’ time. B plc has just declared dividend of K1,500,000 in total for all issued ordinary shares. The dividend growth rate is 4% per year forever. Company tax is 30% per year. The market rate of return is 12% and the company has an equity beta value of 1.25 Required:a) Calculate WACC based on market values. b) Discuss the implications of using a wrong WACC value in project appraisal and comment on the current level of capital gearing.
Compute 2022 Basic EPS given the following data: 2022 $25,000,000 $15,000,000 $10,000,000 Total Assets Total Liabilities. Total Stockholders' Equity Common Stock; $1 par value; 100,000 shares issued and outstanding 12/31/2021 & 12/31/2022 Preferred Stock; $100 par value; 500 shares issued and outstanding 12/31/2021 & 12/31/2022 Preferred Dividends Common Dividends Net Income (Consolidated) Non-Controlling Interest in Income $8.90 per share $8.10 per share O $9 per share O $10 per share $100,000 $50,000 $10,000 $40,000 $1,000,000 $90,000 2021 $24,000,000 $14,500,000 $9,500,000 $100,000 $50,000 $10,000 $30,000 $950,000 $95,000
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Problem 17-10 Marin, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $15 each $14,400 Rogers Company 860 shares @ $19 each 16,340 Chance Company 480 shares @ $8 each 3,840 Equity investments @ cost 34,580 Fair value adjustment (7,780 ) Equity investments @ fair value $26,800 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Marin, Inc. sold 300 shares of Chance Company for $12 per share. 3. On May 15, Marin, Inc. purchased 110 more shares of Evers Company stock at $16 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $17, Rogers $18, and Chance $7. During 2021, the following transactions took place. 5. On February 1, Marin, Inc. sold the remaining Chance shares for $7 per share. 6. On March 1, Rogers Company paid a $2 per share…