Homework 2 Essay - 4362 Words

1. Construct a balance sheet for Sophie’s Sofas given the following data. (Be sure to list the assets andliabilities in order of their liquidity.) | Cash balances | = | $ | 8,000 | Inventory of sofas | = | $ | 180,000 | Store and property | = | $ | 80,000 | Accounts receivable | = | $ | 20,000 | Accounts payable | = | $ | 15,000 | Long-term debt | = | $ | 150,000 | | BALANCE SHEET OF SOPHIE’S SOFAS | Assets | | Liabilities amp; Shareholders’ Equity | | Cash | $ | Accounts payable | $ | Accounts receivable | | Long-term debt | | Inventory | | Shareholders’ equity | | Store amp; property | | | | | | | | Total assets | $ | Total liabilities amp; Shareholders equity | $ | | Top†¦show more content†¦| What are the book value and market value of the firm? (Enter your answers in dollars not in millions.) | Book value | $ | Market value | $ | | b. | If there are 2 million shares of stock in the new corporation, what would be the price per share and the book value per share? (Round your answers to 2 decimal places.) | Price per share | $ | Book value per share | $ | | Explanation: a. Book value equals the $800,000 the founder of the firm has contributed in tangible assets. Market value equals the value of his patent plus the value of the production plant: $50,000,000 + $800,000 = $50,800,000. | b. Price per share = $50.8 million/2 million shares = $25.40 | Book value per share = $800,000/2 million shares = $0.40 | 6. Sheryl’s Shipping had sales last year of $16,500. The cost of goods sold was $7,800, general and administrative expenses were $2,300, interest expenses were $1,800, and depreciation was $2,300. The firm’s tax rate is 30%. | a. | What are earnings before interest and taxes? | Earnings before interest and taxes | $ | b. | What is net income? | Net income | $ | c. | What is cash flow from operations? | Cash flow from operations | $ | Explanation: a. amp; b. | | | Sales | $ | 16,500 | Cost of goods sold | | 7,800 | General amp; administrative expenses | | 2,300 | Depreciation expense | | 2,300 | | | | EBIT | | 4,100 | Interest expense | | 1,800 | | | | TaxableShow MoreRelatedModule 2 Homework1867 Words   |  8 PagesModule 2 Homework Risk Management and Health Care Regulations Angie Martinez Grand Canyon University Module 2 Homework 1) There are several processes involved in a wrongful discharge. This is a fairly new and quickly expanding area that involves litigation, and this is an area that employers would rather avoid. 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