Carpenter Company provides this information for the month ended October 31, 2012 (A+)

Carpenter Company provides this information for the month ended October 31, 2012: sales on credit $300,000; cash sales $150,000; sales discounts $5,000; and sales returns and allowances $22,000. Complete the sales revenues section of the income statement below, based on this information. (List multiple entries from largest to smallest amounts, e.g. 10, 5, 1.)

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3. Prepare the journal entries to record the following transactions on Ramirez Company’s books using a perpetual inventory system (A+)

Prepare the journal entries to record the following transactions on Ramirez Company\’s books using a perpetual inventory system.

(a) On March 2 Ramirez Company sold $800,000 of merchandise to Ikerd Company, terms 2/10, n/30. The cost of the merchandise sold was $540,000.

(b) On March 6 Ikerd Company returned $110,000 of the merchandise purchased on March 2. The cost of the merchandise returned was $75,000.

(c) On March 12 Ramirez Company received the balance due from Ikerd Company.

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Prior Company buys merchandise on account from Wood Company (A+)

Prior Company buys merchandise on account from Wood Company. The selling price of the goods is $900 and the cost of goods is $630. Both companies use perpetual inventory systems. Journalize the transactions on the books of both companies.

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FIN ACCTG Kimmel, Financial Accounting, 6e Assignment Ch-5, Presented here are the components in Pedersen Company’s income statement (A+)

FIN ACCTG (ACCT2020)

Kimmel, Financial Accounting, 6e

Assignment Ch-5

Presented here are the components in Pedersen Company\’s income statement. Determine the missing amounts.

Sales Costof Goods Sold Gross Profit Operating Expenses Net Income $71,200 (b) $30,000 (d)$ $10,800

$108,000 $70,000 (c)$ (e)$ $29,500

(a)$ $71,900 $109,600 $46,200 (f)$

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3. Suppose a stock had an initial price of $119 per share, paid a dividend of $3.20 per share during the year, and had an ending share price of $150 (A+)

Suppose a stock had an initial price of $119 per share, paid a dividend of $3.20 per share during the year, and had an ending share price of $150.

Required:

1. Compute the percentage total return.

2. What was the dividend yield?

3. What was the capital gains yield?

2. Suppose a stock had an initial price of $94 per share, paid a dividend of $2.50 per share during the year, and had an ending share price of $76.50.

Required:

1. Compute the percentage total return.

2. What was the dividend yield?

3. What was the capital gains yield

3. Consider the following information for a period of years.

Series Arithmetic Mean

Large-company stocks 11.7%

Small-company stocks 16.4

Long-term corporate bonds 6.6

Long-term government bonds 6.5

Intermediate-term government bonds 5.6

U.S. Treasury bills 3.8

Inflation 3.9

Required:

1. What is the historical real return on long-term government bonds?

2. What is the historical real return on long-term corporate bonds?

4. Using the following returns for X and Y.

Returns

Year X Y

1 22.5% 28.5%

2 –17.5 –4.5

3 10.5 30.5

4 21.0 –16.0

5 5.5 34.5

Required:

1. Calculate the average returns for X and Y.

2. Calculate the variances for X and Y.

3. Calculate the standard deviations for X and Y.

5. You’ve observed the following returns on Staverosky Corporation’s stock over the past five years: –27.6 percent, 15.4 percent, 33.8 percent, 3.2 percent, and 22.2 percent.

Required:

1. What was the arithmetic average return on the stock over this five-year period?

2. What was the variance of the returns over this period?

3. What was the standard deviation of the returns over this period?

6. You find a certain stock that had returns of 15.6 percent, –22.8 percent, 28.8 percent, and 19.8 percent for four of the last five years. Assume the average return of the stock over this period was 13.60 percent.

Required:

1. What was the stock’s return for the missing year?

2. What is the standard deviation of the stock’s returns?

7. A stock has had returns of −18.8 percent, 28.8 percent, 21.6 percent, −9.9 percent, 34.6 percent, and 26.8 percent over the last six years.

Required:

What are the arithmetic and geometric returns for the stock

8. A stock has had the following year-end prices and dividends:

Year Price Dividend

1 $ 64.28 —

2 71.15 $ 0.59

3 76.95 0.64

4 63.22 0.70

5 73.01 0.79

6 79.25 0.86

Required:

What are the arithmetic and geometric returns for the stock?

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What are the portfolio weights for a portfolio that has 170 shares of Stock A that sell for $91 per share and 145 shares of Stock B that sell for $110 per share (A+)

What are the portfolio weights for a portfolio that has 170 shares of Stock A that sell for $91 per share and 145 shares of Stock B that sell for $110 per share?

2. You own a portfolio that is 16 percent invested in Stock X, 31 percent in Stock Y, and 53 percent in Stock Z. The expected returns on these three stocks are 9 percent, 12 percent, and 14 percent, respectively.

Required:

What is the expected return on the portfolio?

3. Consider the following information:

State ofEconomy Probability of Stateof Economy Rate of Returnif State Occurs

Recession 0.25 –0.09

Normal 0.45 0.11

Boom 0.30 0.30

Required:

Calculate the expected return. (Do not include the percent sign (%).

4. You own a stock portfolio invested 24 percent in Stock Q, 21 percent in Stock R, 44 percent in Stock S, and 11 percent in Stock T. The betas for these four stocks are 0.86, 0.92, 1.32, and 1.77, respectively.

Required:

What is the portfolio beta?

5. A stock has a beta of 1.24 and an expected return of 12.2 percent. A risk-free asset currently earns 4.00 percent.

Required:

(a) What is the expected return on a portfolio that is equally invested in the two assets? (

(b) If a portfolio of the two assets has a beta of 0.84, what are the portfolio weights?

(c) If a portfolio of the two assets has an expected return of 11.4 percent, what is its beta?

(d) If a portfolio of the two assets has a beta of 2.44, what are the portfolio weights?

6. Stock J has a beta of 1.27 and an expected return of 13.51 percent, while Stock K has a beta of 0.82 and an expected return of 10.45 percent. You want a portfolio with the same risk as the market.

Required:

1. What is the portfolio weight of each stock?

2. What is the expected return of your portfolio?

7. Consider the following information on a portfolio of three stocks:

State of Economy Probability Stock A Stock B Stock C

Of State of Economy Rate of Return Rate of Return Rate of Return

Boom 0.13 0.04 0.34 0.58

Normal 0.53 0.12 0.14 0.22

Bust 0.34 0.18 –0.13 –0.37

Required:

(a) If your portfolio is invested 36 percent each in A and B and 28 percent in C, what is the portfolio’s expected return?

(b) If the expected T-bill rate is 3.85 percent, what is the expected risk premium on the portfolio?

8. You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below:

Asset Investment Beta

Stock A $132,000 0.77

Stock B $148,000 1.22

Stock C 1.37

Risk-free asset

Required:

1 How much will you invest in Stock C?

2. How much will you invest in the risk-free asset?

9. Suppose you observe the following situation:

State of

Economy Probabilityof State Return if State Occurs Stock A Stock B

Bust 0.19 −0.05 −0.08

Normal 0.74 0.16 0.17

Boom 0.07 0.52 0.33

Required:

(a) Calculate the expected return on each stock.

(b) Assuming the capital asset pricing model holds and stock A’s beta is greater than stock B’s beta by .23, what is the expected market risk premium?

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On January 1, 2010, Applied Technologies Corporation (ATC) issued $600,000 in bonds that mature in 10 years (A+)

On January 1, 2010, Applied Technologies Corporation (ATC) issued $600,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 10 percent. When the bonds were issued, the market interest rate was 10 percent. The bonds pay interest once per year on December 31.

Required:

1.Determine the price at which the bonds were issued and the amount that ATC received at issuance.

2. Prepare the journal entry to record the bond issuance. (Omit the \”$\” sign in your response.)

3. Prepare the journal entry to record the interest payment on December 31, 2010, assuming no interest has been accrued earlier in the year.

4. What is the total cost of borrowing for this bond for Applied Technologies?

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Wadkins Company, a machinery dealer, leased a machine to Romero Corporation on January 1, 2012 (A+)

Wadkins Company, a machinery dealer, leased a machine to Romero Corporation on January 1, 2012. The lease is for an 8-year period and requires equal annual payments of $38,514 at the beginning of each year. The first payment is received on January 1, 2012. Wadkins had purchased the machine during 2011 for $170,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Wadkins. Wadkins set the annual rental to ensure an 11% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Wadkins at the termination of the lease.

Required:

(a) Compute the amount of the lease receivable. (Round your answer to the nearest dollar eg 58,971.)

(b) Prepare all necessary journal entries for Wadkins for 2012.

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Geiberger Corporation manufactures replicators (A+)

Geiberger Corporation manufactures replicators. On January 1, 2012, it leased to Althaus Company a replicator that had cost $110,000 to manufacture. The lease agreement covers the 5-year useful life of the replicator and requires 5 equal annual rentals of $40,800 each. An interest rate of 12% is implicit in the lease agreement. Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs. Prepare Geiberger\’s January 1, 2012, journal entries. (Round your answer to the nearest dollar eg 58,591).

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Indiana Jones Corporation enters into a 6-year lease of equipment on January 1, 2012 (A+)

Indiana Jones Corporation enters into a 6-year lease of equipment on January 1, 2012, which requires 6 annual payments of $40,000 each, beginning January 1, 2012. In addition, Indiana Jones guarantees the lessor a residual value of $20,000 at lease-end. The equipment has a useful life of 6 years. Prepare Indiana Jones\’ January 1, 2012, journal entries assuming an interest rate of 10%. (Round your answer to the nearest dollar eg 58,591).

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