Your company received a $7 million order on the last day of the year.You filled the order with $3 million worth of inventory. The customerpicks up the order the same day and pays $2 million up front in cash;you also issue a bill for the customer to pay the remaining balanceof $5 million within 40 days. Suppose your firm's tax rate is 0%(ignore taxes). Based on this information, complete the table below:Value ofAccountIncrease/Decrease/No effecteffect ($)RevenuesEarningsReceivablesInventoryCash

RevenuesThe sale was completed at year-end so it will form part of sales that same year. Revenues…

Answered: Your company received a $7 million…

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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Company A has a line of credit with the bank. Company A can borrow up to $100,000 at prime plus 2%. In January, the company borrowed 20,000. In February, repaid $4,000. If prime for February is 4%, how much interest expense does Company A report on the income statement in February?
Imagine that Commodore has taken out a multimilliondollar loan that must be repaid next year. How might the lender react if it learned that Commodore was using the book-and-hold method to make revenues look higher than they really are?
Click here to read the eBook: The Income Statement INCOME STATEMENT Patterson Brothers recently reported an EBITDA of $11.5 million and net income of $2.8 million. It had $2.0 million of interest expense, and its corporate tax rate was 30%. What was its charge for depreciation and amortization? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. Do not round intermediate calculations. $
To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) Could you please help me answer 7-9?
Your office supply has a line of credit that charges an annual percentage rate of prime rate plus 3%. Their starting balance on March 1st was $10,600. On March 5th they borrowed $7,500. On March 14th the business made a payment of $3,300 and in March 18th they borrowed $5,300. If the current prime rate is 9% what is the new balance? $26,100.00 $20,276.10 $27,583.43 $18,400.29
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.
You just borrowed $15,000 from a finance company to start a business. If you are required to repay $16,800 interest and principal in one year, and inflation is 4.0%, what is the expected real rate of interest?
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Suppose you borrow $1,000,000 when financing a coffee shop which is valued at $1,300,000. You expect to generate a cash flow of $1,400,000 at the end of the year. The cost of debt is 5.5%. What is the cost of equity? Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05
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Medwig Corporation has a DSO of 17 days. The company averages $8,500 in sales each day (all customers take credit). What is the company's average accounts receivable? Assume a 365-day year. Round your answer to the nearest dollar.

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