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    1MAS

    Uploaded by

    Dan Ryan

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    © All Rights Reserved
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    1MAS

    Uploaded by

    Dan Ryan
    23 views9 pages

    Copyright

    © © All Rights Reserved

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    XLSX, PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    23 views9 pages

    1MAS

    Uploaded by

    Dan Ryan

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 9

    1. Mark Corp. uses the allowance method for bad debts.

    During 2008, Mark charged


    P 30,000 to bad debts expense, and wrote off P 25,200 of uncollectible accounts receivable.
    These transactions resulted in a decrease in working capital of?
    2008 2007
    Cash 10,000.00 80,000.00
    Marketable Securities 30,000.00 10,000.00
    A/R, Net 50,000.00 150,000.00
    Inventories 90,000.00 150,000.00
    Land and Building 340,000.00 360,000.00
    Notes Payable, Trade 70,000.00 110,000.00
    Accounts Payable, Trade 20,000.00 40,000.00
    Mortgage Payable 270,000.00 280,000.00

    Cash Sales 1,800,000.00 1,600,000.00


    Credit Sales 500,000.00 800,000.00
    Cost of Sales 1,000,000.00 1,400,000.00

    1. Quick Ratio
    2. Current Ratio
    3. Receivable Turnover
    4. Inventory Turnover
    Preferred Stock, Non- Convertible, 8%, Par 100
    Common Stock
    Retained Earnings
    Dividends Paid on preferred stock for the year ended
    Net Income

    Compute the Return on Common Equity

    Net Income (CS) / Common Equity*

    * Common Stock + Retained Earnings


    2007 2008
    125,000.00 125,000.00
    300,000.00 400,000.00
    75,000.00 185,000.00
    10,000.00 10,000.00
    60,000.00 120,000.00

    120,000 - 10,000 / (375,000 + 585,000) /2


    Total Equity 100,000,000.00
    Less: Preferred Shares - 25,000,000.00
    Common Stock 75,000,000.00
    Book Value at December 31, 2008 12.00
    Quaoted Market value on Stock Exchange on December 31, 2008 9.00
    Earnings for 2008 3.00
    Par Value 2.00
    Dividends for 2008 1.00

    What is the Price- Earnings Ratio?


    10% Cumulative preferred stock, par and liquidation value of P 100,
    issued and outstanding, 1,000 shares
    Common Stock, par value P 5, authorized 20,000 shares,
    issued and outstanding, 10,000 shares

    Net Income for the year ended December 31, 2008 was P 450,000,
    but no dividends were declared.

    Compute book value per share.

    Book Value per Share = Total Equity - Preferred Equity / Shares Issued and Outstanding
    = 600,000 - (100,000 + 10,000) / 10,000 shares
    Php 49 per Share
    100,000.00

    50,000.00
    Sales 1,000,000.00
    Variable Cost 600,000.00
    Traceable Fixed Cost 100,000.00
    Average Invested Capital 200,000.00
    Imputed Interest Rate 0.15%

    1. How much is the residual income?


    2. How much is the return on investment?

    Residual Income = Operating Income - Imputed Interest


    Return on Investment = Operating Income / Ave. Investment

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