Monthly Archives: April 2012

On January 1, 2010, Metco, Inc., had issued an outstanding 574,600 shares of $2 par value common stock

On January 1, 2010, Metco, Inc., had issued an outstanding 574,600 shares of $2 par value common stock. On March 15, 2010, Metco, Inc., purchased for its treasury 4,400 shares of its common stock at a price of $75 per … Continue reading

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The Bowman Corporation has a $20 million bond obligation outstanding, which it is considering refunding

The Bowman Corporation has a $20 million bond obligation outstanding, which it is considering refunding. Though the bonds were initially issued at 12 percent, the interest rates on similar issues have declined to 10.5 percent. The bonds were originally issued … Continue reading

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(Financial forecasting) The balance sheet of the Thompson Trucking Company (TTC) follows

4-8 (Financial forecasting) The balance sheet of the Thompson Trucking Company (TTC) follows: Thompson Trucking Company Balance Sheet, December 31, 2009 ($ millions) Current assets $10 Accounts payable $ 5 Net fixed assets 15 Notes payable 0 Total $25 Bonds … Continue reading

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Use the following industry average ratios to construct a pro forma balance sheet for Carlos Menza, Inc

4-5A (Pro forma balance sheet construction) Use the following industry average ratios to construct a pro forma balance sheet for Carlos Menza, Inc. Total asset turnover 2 times Average collection period (assume a 365-day year) 9 days Fixed asset turnover … Continue reading

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Packard Company has the following opening account balances in its general and subsidiary ledgers on January 1 and uses the periodic inventory system

ACCOUNTING Comprehensive Problem: Chapters 3, 4, 5, 6, and 7 Packard Company has the following opening account balances in its general and subsidiary ledgers on January 1 and uses the periodic inventory system. All accounts have normal debit and credit … Continue reading

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If Halley Industries reimburses employees who earn master’s degrees and who agree to remain with the firm for an additional 3 years, should the

E11–1 If Halley Industries reimburses employees who earn master’s degrees and who agree to remain with the firm for an additional 3 years, should the expense of the tuition reimbursement be categorized as a capital expenditure or an operating expenditure? … Continue reading

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Dawn is a director of the Manello Corporation

Dawn is a director of the Manello Corporation. Bert, a friend of Dawn’s and an inventor, creates a new product. Bert wants Manello to handle the production and marketing of this new product, so Bert discusses his new invention with … Continue reading

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Billy has created a device called a TowRack which is a rack for carrying sports equipment such as bikes, skis, and kayaks

Billy has created a device called a TowRack which is a rack for carrying sports equipment such as bikes, skis, and kayaks. What makes this item different from other racks is that it attaches to a vehicle’s trailer hitch and … Continue reading

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The management of corporations frequently solicit proxies for a management-supported board of directors

The management of corporations frequently solicit proxies for a management-supported board of directors. What is the risk to shareholders of blindly granting these proxies? Click here for the SOLUTION

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14-3 (Individual or component costs of capital) Compute the cost of capital for the firm for the following

14–3. (Individual or component costs of capital) Compute the cost of capital for the firm for the following: a. A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11%. The bonds … Continue reading

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