INVESTMENTS LOOSE LEAF VALUE
11th Edition
ISBN: 9781260416978
Author: Bodie
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 1, Problem 8PS
a
Summary Introduction
To Prepare: Balance sheet after Lanny products get bank loan and calculate real assets to total assets ratio.
Introduction:
The physical assets that have inherent value are called as real assets which include precious metals, lands, commodities and natural resources.
Total assets can be defined by the total amount of assets owned by an organization. These assets are represented in terms of economical value.
B
Summary Introduction
To calculate: Real assets to total assets ratio is to be determined by preparing balance sheet when Lanni spends $70,000.
Introduction: The physical assets are called as real assets which include precious metals, lands, commodities and natural resources.
Total assets can be defined by the total amount of owned asset which is owned by individual or any person. These assets are represented in terms of economical value.
C
Summary Introduction
To calculate: Real assets to total assets ratio is to be determined by preparing balance sheet when Lanni accepts the payments of share.
Introduction: The physical assets are called as real assets which include precious metals, lands, commodities and natural resources.
Total assets can be defined by the total amount of owned asset which is owned by individual or any person. These assets are represented in terms of economical value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A. Assume that you have completed your plans and proformas for the next year of operations. Your proformas indicate that you will have $500,000 less cash than you think you will need. What would you most likely do from the following list?
a. Develop a plan to increase accounts payable by $500,000
b. Make plans for a company holiday party
c. Pay dividends to shareholders
d. Develop a plan to increase accounts receivable
B. Assume that you have completed your plans and proformas for the next year of operations. Your proformas indicate that you will have $500,000 less cash than you think you will need. What would you most likely do from the following list?
a. Reduce your volume projection in your sales forecast to save money
b. Review all proforma expenses for accuracy
c. Create a plan to reduce your average price for the next year
d. Develop a plan to make additional principle payments on your bank loan during the next year
You are a Corporate Credit Analyst for your bank. A new corporate customer in the manufacturing sector approached your bank for a large credit facility in the sum of $20 million for production equipment and warehousing. The customer submitted the following financials to you.
The cash position increased from $6.7 million in 2019 to $16 million in 2021. Does this signal a strengthening of the liquidity position of the firm? Explain.
Michael Anderson is starting his computer programming business and has deposited in initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.
Chapter 1 Solutions
INVESTMENTS LOOSE LEAF VALUE
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $21,000 and has cash on hand of $28,000 contributed by Lanni’s owners. Lanni takes out a bank loan. It receives $32,000 in cash and signs a note promising to pay back the loan over 3 years. a. Prepare the balance sheet just after it gets the bank loan. assets liabilities & shareholders' equity cash ________ bank loan _________ computers ________ shareholders' equity ____________ total ___________ total ________ What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.) b. Prepare the balance sheet after Lanni spends the $60,000 to develop its software product. assets liabilities & shareholders' equity software product ________ bank loan _________ computers ________ shareholders' equity ____________ total ___________ total ________ What is the ratio of real assets to total assets? (Round your answer to 2 decimal…arrow_forwardbased on the income statement and balance sheet of the company, will the company be successful after taking a 500.0 mil dollar loan? or should they sought other forms of financing?arrow_forwardYou have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 910,000 $ 1,150,000 Marketable securities 0 300,000 Accounts receivable, net 2,500,000 1,600,000 Inventory 3,550,000 2,000,000 Prepaid expenses 250,000 190,000 Total current assets 7,210,000 5,240,000 Plant and equipment, net 9,420,000 9,000,000 Total assets $ 16,630,000 $ 14,240,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,960,000 $ 2,880,000 Note payable, 10% 3,640,000 3,040,000 Total liabilities 7,600,000 5,920,000…arrow_forward
- Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $20,000 and has cash on hand of $29,000 contributed by Lanni’s owners. Lanni takes out a bank loan. It receives $31,000 in cash and signs a note promising to pay back the loan over 3 years. a. Prepare the balance sheet just after it gets the bank loan. What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.) ASSETS Liabilities & shareholders' equity CASH: bank loan : computers : shareholder's equity : total: total : ratio b. Prepare the balance sheet after Lanni spends the $60,000 to develop its software product. What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.) ASSETS Liabilities & shareholders' equity software product: bank loan : computers : shareholder's equity : total: total : ratio c. Lanni sells the software product to Microsoft, which will market it to…arrow_forwardConsider the following table, which is extracted from the company balance sheet andanswer the questions. Items Amount in OMR Items Amount in OMR Prepayments 4,500 Cash 6,000 Account receivable 6,000 Marketable securities 3,000 Accruals 4,000 Accounts payable 5,000 Notes payable 3,500 Inventory 6,000 Short-term debt 6,000 Tax payable 2,000 Calculate the networking capital (NWC) for the company.B. How working capital is different from capital investments? Explainarrow_forwardYou have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 980,000 $ 1,220,000 Marketable securities 0 300,000 Accounts receivable, net 2,780,000 1,880,000 Inventory 3,620,000 2,200,000 Prepaid expenses 260,000 200,000 Total current assets 7,640,000 5,800,000 Plant and equipment, net 9,560,000 9,070,000 Total assets $ 17,200,000 $ 14,870,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,030,000 $ 3,020,000 Note payable, 10% 3,680,000 3,080,000 Total liabilities 7,710,000 6,100,000 Stockholders' equity: Common stock, $75 par value…arrow_forward
- You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 870,000 $ 1,110,000 Marketable securities 0 300,000 Accounts receivable, net 2,340,000 1,440,000 Inventory 3,510,000 2,100,000 Prepaid expenses 240,000 180,000 Total current assets 6,960,000 5,130,000 Plant and equipment, net 9,340,000 8,960,000 Total assets $ 16,300,000 $ 14,090,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,920,000 $ 2,800,000 Note payable, 10% 3,600,000 3,000,000 Total liabilities 7,520,000 5,800,000 Stockholders' equity: Common stock, $70 par value…arrow_forwardYou have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 870,000 $ 1,110,000 Marketable securities 0 300,000 Accounts receivable, net 2,340,000 1,440,000 Inventory 3,510,000 2,100,000 Prepaid expenses 240,000 180,000 Total current assets 6,960,000 5,130,000 Plant and equipment, net 9,340,000 8,960,000 Total assets $ 16,300,000 $ 14,090,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,920,000 $ 2,800,000 Note payable, 10% 3,600,000 3,000,000 Total liabilities 7,520,000 5,800,000 Stockholders' equity: Common stock, $70 par value…arrow_forwardYou have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 870,000 $ 1,110,000 Marketable securities 0 300,000 Accounts receivable, net 2,340,000 1,440,000 Inventory 3,510,000 2,100,000 Prepaid expenses 240,000 180,000 Total current assets 6,960,000 5,130,000 Plant and equipment, net 9,340,000 8,960,000 Total assets $ 16,300,000 $ 14,090,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,920,000 $ 2,800,000 Note payable, 10% 3,600,000 3,000,000 Total liabilities 7,520,000 5,800,000 Stockholders' equity: Common stock, $70 par value…arrow_forward
- You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 960,000 $ 1,260,000 Marketable securities 0 300,000 Accounts receivable, net 2,700,000 1,800,000 Inventory 3,900,000 2,400,000 Prepaid expenses 240,000 180,000 Total current assets 7,800,000 5,940,000 Plant and equipment, net 9,300,000 8,940,000 Total assets $ 17,100,000 $ 14,880,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,900,000 $ 2,760,000 Note payable, 10% 3,600,000 3,000,000 Total liabilities 7,500,000 5,760,000 Stockholders' equity: Common stock, $78 par value…arrow_forwardRead the instructions below and see the attached balance sheet of moon and star cooperation to support your answer. Moon Corporation and Star Corporation are in the same line of business and both were recently organized, so it may be assumed that the recorded costs for assets are close to current market values. The balance sheets for the two companies are as follows at July 31, 2011: Instructions a. Assume that you are a banker and that each company has applied to you for a 90-day loan of $12,000. Which would you consider to be the more favorable prospect? Explain your answer fully. b. Assume that you are an investor considering purchasing all the capital stock of one or both of the companies. For which business would you be willing to pay the higher price? Do you see any indication of a financial crisis that you might face shortly after buying either company? Explain your answer fully. (For either decision, additional information would be useful, but you are to reach your decision on…arrow_forwardI am stuck on this one question that I have left for my homework and need help: Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange.B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed.C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid.E. The electric bill in “C” is paid.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
What is Banking as a Service? | 11:FS Explores; Author: 11:FS;https://www.youtube.com/watch?v=BvSX6a-P75k;License: Standard Youtube License