FIN 260 Pace University Just Dew It Corporation Balance Sheet 2018 & 2019 HW Help solving form question 9 to question 13 and present in Word format.Here ar

FIN 260 Pace University Just Dew It Corporation Balance Sheet 2018 & 2019 HW Help solving form question 9 to question 13 and present in Word format.Here are some rules for the format of HW submissions: Please, submit your HW via the Blackboard in Word format. Do not pdf your handwritten notes. I am going to write my comments directly into your HW files when I grade them and it is impossible if you pdf themIn your HW submissions, please write your solutions in details. HOMEWORK 1
FINANCIAL STATEMENTS
FIN 260
PROF. GERSHUN
Part 1: Financial Statements, Taxes and Cash Flows
1. Zoombra, Inc., has sales of $817,000, costs of $343,000, depreciation expense of
$51,000, interest expense of $38,000, and a tax rate of 35 percent. What is the net
income for this firm?
2. Suppose the firm, described in the previous problem, paid out $95,000 in cash
dividends. What is the addition to retained earnings?
3. Suppose the firm in Problem 2 had 90,000 shares of common stock outstanding. Find
the earnings per share, or EPS, and the dividends per share.
4. Spruce X, Inc., has sales of $43,800, costs of $22,700, depreciation expense of $2,100,
and interest expense of $1,600. If the tax rate is 35 percent, what is the operating cash
flow, or OCF?
5. During 2019, Toots Umbrella Corp. had sales of $675,000. Cost of goods sold,
administrative and selling expenses, and depreciation expenses were $435,000,
$85,000, and $125,000, respectively. In addition, the company had an interest
expense of $70,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or
carryforward provisions.)
a.
b.
c.
What is Toots’s net income for 2019?
What is its operating cash flow?
Explain your results in (a) and (b).
6. Refer to the corporate marginal tax rate information in Table 2.3.
a. Why do you think the marginal tax rate jumps up from 34 percent to 39
percent at a taxable income of $100,001, and then falls back to a 34 percent
marginal rate at a taxable income of $335,001?
b. Compute the average tax rate for a corporation with exactly $335,001 in
taxable income. Does this confirm your explanation in part (a)? What is the
average tax rate for a corporation with exactly $18,333,334 in taxable
income? Is the same thing happening here?
c. The 39 percent and 38 percent tax rates both represent what is called a tax
“bubble.” Suppose the government wanted to lower the upper threshold of
the 39 percent marginal tax bracket from $335,000 to $200,000. What would
the new 39 percent bubble rate have to be?
6. Use the following information for Taco Swell, Inc., (assume the tax rate is 34
percent):
2018
2019
Sales
$12,730 $ 14,229
Depreciation
1,827
1,910
Cost of goods sold
4,377
5,178
Other expenses
1,041
906
Interest
854
1,019
Cash
6,674
7,113
Accounts receivable
8,837 10,371
Short-term notes payable
1,288
1,262
Long-term debt
22,352 27,099
Net fixed assets
55,977 59,700
Accounts payable
4,822
5,108
Inventory
15,711 16,817
Dividends
1,522
1,780
Construct an income statement and balance sheet for this company for 2018 and 2019.
7. Using the same information as in Problem 7, for 2019, calculate the cash flow from
assets, cash flow to creditors, and cash flow to stockholders for Taco Swell, Inc.
Part 2: Working with Financial Statements
8. Modernative Comp. has a debt–equity ratio of 0.65, its return on assets is 8.2
percent, and total equity is $515,000. What is Modernative’s equity multiplier?
Return on equity? Net income?
9. Just Dew It Corporation reports the following balance sheet information for 2018 and
2019:
Just Dew It Corporation
2018 and 2019 Balance Sheets
Assets
Liabilities and Owner’s Equity
2018
2019
2018
2019
Current Assets
Current Liabilities
Cash
$11,135 $13,407 Accounts payable
$45,166
$48,185
Accounts Receivable
28,419
30,915
Notes payable
17,773
18,257
Inventory
51,163
56,295
Total
$62,939
$66,442
Total
$90,717 $100,617
Long term debt
$44,000
$39,000
Net plant and equipment
Total assets
Owners’ equity
$326,456 $357,560 Common stock and $50,000
paid-in surplus
Retained earnings
260,234
Total
$310,234
$417,173 $458,177 Total liabilities and $417,173
owners’ equity
$50,000
302,735
$352,735
$458,177
Prepare the 2018 and 2019 common-size balance sheets for Just Dew It.
10. Prepare the 2019 common-base year balance sheet for Just Dew It.
11. Prepare the 2019 combined common-size, common-base year balance sheet for Just
Dew It.
12. For each account on this company’s balance sheet, show the change in the account
during 2019 and note whether this change was a source or use of cash. Do your
numbers add up and make sense? Explain your answer for total assets as compared
to your answer for total liabilities and owners’ equity.
13. Based on the balance sheets given for Just Dew It, calculate the following financial
ratios for each year:
a. Current ratio.
b. Quick ratio.
c. Cash ratio.
d. NWC to total assets ratio.
e. Debt–equity ratio and equity multiplier.
f. Total debt ratio and long-term debt ratio.

Purchase answer to see full
attachment