f its investing activities, the management of G & J Merchandising & More has just concluded an expansion project relating to the business’s storage facilities. The project required capital outlay of $1,800,000 and was funded by a loan from a family member, who is a partner in the business. $340,000 of the principal along with interest of $35,000 will become due and payable in January 2021. How should I show this in the Cash Budget?
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As part of its investing activities, the management of G & J Merchandising & More has just
concluded an expansion project relating to the business’s storage facilities. The project
required capital outlay of $1,800,000 and was funded by a loan from a family member, who
is a partner in the business. $340,000 of the principal along with interest of $35,000 will
become due and payable in January 2021.
How should I show this in the
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- 1)You are an investment analyst at FI Investments tasked to value FBC firm a Southern Agricultural Conglomerate. The following financial information was recently released for FBC. The company’s 2018 and 2017 annual financial reports are contained in tables 1 and 2 below, along with important additional information: Table 1: FBC statement of financial position (R millions) please see attached image Additional information: Depreciation (2018): R483. The firm spent R250m in profitable projects during the course of 2018 WACC : 15% Cost of equity of the firm: 10% Tax rate : 40% Table 2: FBC statement of comprehensive income (R millions except for share data) see attached image 2 Use the information given, to answer the following: a)Calculate the Free Cash Flow to the Firm (FCFF) for the year 2018. b)You are told that the Free Cash Flow to Equity (FCFE) of the firm will continue to grow at a rate of 5% for the next 3 years, after which it will stabilize to a rate of 3%. Calculate the…1)You are an investment analyst at FI Investments tasked to value FBC firm a Southern Agricultural Conglomerate. The following financial information was recently released for FBC. The company’s 2018 and 2017 annual financial reports are contained in tables 1 and 2 below, along with important additional information: Table 1: FBC statement of financial position (R millions) see attached table1 Additional information: Depreciation (2018): R483. The firm spent R250m in profitable projects during the course of 2018 WACC : 15% Cost of equity of the firm: 10% Tax rate : 40% Table 2: FBC statement of comprehensive income (R millions except for share data) 2018 2017 Total revenues R3 175 R3 075 EBIT 495 448 Interest expense 104 101 Net Income 235 208 Dividends per share R0.80 R0.80 Use the information given, to answer the following: 1.1)You are told that the Free Cash Flow to Equity (FCFE) of the firm…Corporation applied for its rehabilitation and submitted a rehabilitation plan which called for the entry by it into a joint venture agreement with Y Corporation. Under the agreement, Y Corporation was to lend to X Corporation its credit facilities with certain banks to obtain funds not only to operate X Corporation but also for a part thereof in the amount of P1 million as initial deposit in a sinking fund to be augmented annually in amounts equivalent to 10% of the yearly income from its operation of the business of X Corporation. From this fund the creditors of X Corporation were to be paid annually, starting from the second year of operations, with the entire indebtedness to be liquidated in 15 years. The creditors of X Corporation objected to the plan because Y Corporation would be taking over the business and assets of X Corporation. 1.Could the court approve the plan despite the objections of the creditors of X Corporation and could the creditors be compelled to follow the…
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- X Corporation applied for its rehabilitation and submitted a rehabilitation plan which called for the entry by it into a joint venture agreement with Y Corporation. Under the agreement, Y Corporation was to lend to X Corporation its credit facilities with certain banks to obtain funds not only to operate X Corporation but also for a part thereof in the amount of P1 million as initial deposit in a sinking fund to be augmented annually in amounts equivalent to 10% of the yearly income from its operation of the business of X Corporation. From this fund the creditors of X Corporation were to be paid annually, starting from the second year of operations, with the entire indebtedness to be liquidated in 15 years. The creditors of X Corporation objected to the plan because Y Corporation would be taking over the business and assets of X Corporation10. PETRON Corporation sold a fixed asset for P100,000, which was also its book value. This isA. an investment cash flow and a source of funds.B. an operating cash flow and a source of funds.C. an operating cash flow and a use of funds.D. an investment cash flow and a use of funds. 11. SMART Corporation raises P500,000 in long-term debt to acquire additional plant capacity. This is consideredA. an investment cash flow.B. a financing cash flow.C. a financing cash flow and investment cash flow, respectively.D. a financing cash flow and operating cash flow, respectively. 12. All of the following are financing cash flows EXCEPTA. sale of stock.B. payment of stock dividends.C. increasing debt.D. repurchasing stock. 13. All of the following are operating cash flows EXCEPTA. net profit/earnings after tax.B. increase or decrease in current liabilities.C. increase or decrease in fixed assets.D. depreciation expense.Assuming that the effects of interest capitalization are material, calculate the amount ofinterest costs to be capitalized by Matthew Corporation in 2014 in relation to the following events: On January 1, Matthew began construction for a new storage building for its own use. Expenditures incurred evenly throughout the year totaled $900,000. Matthew borrowed $1,000,000 specifically for construction of the storage building at an annual interest rate of 6%. What is the amount of interest that should be capitalized? a. $54,000b. $27,000c. $2,700d. $0 Inventories costing $200,000 were routinely manufactured during the year. Matthew borrowed $200,000 at 8% to finance inventory-related costs. What is the amount of interest that should be capitalized? a. $16,000b. $8,000c. $800d. $0 On September 1, Matthew began construction of a custom-designed machine to the specifications of a customer. As of December 31, $200,000 of materials, labor, and overhead have been assigned to the machine.…
- Magic accepted several office equipment from a stockholder which originally costed the donor P1,200,000. On the same date, the items had aggregated fair value totaling P985,000. The company incurred P30,000 for professional fees and transfer taxes related to the transaction. The amount was charged to other expenses. How much should be the credited as donated capital?Marigold Corporation had the following activities in 2023: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. (a) Sold land for $196,000. Purchased an FV-NI investment in common shares for $14,200. Purchased inventory for $852,000 with cash. Received $73,000 cash from bank borrowings. Received interest for $11,500. Purchased equipment for $483,000 in exchange for common shares. Issued common shares for $370,000 cash. Recorded an unrealized gain of $3,750 on investments accounted for using the FV-NI model. Purchased investments in bonds, reported at amortized cost for $59,600. Declared and paid a dividend of $17,600 (charged to retained earnings). Sold investments in bonds reported at amortized cost, with a carrying amount of $406,800, for $416,200. Received dividends of $5,000 on FV-NI investments. (b) Your answer is correct. Calculate the amount that Marigold should report as net cash provided (used) by investing activities on its statement of cash flows under IFRS. Under IFRS, assume Marigold…Marigold Corporation had the following activities in 2023: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. (a) Sold land for $196,000. Purchased an FV-NI investment in common shares for $14,200. Purchased inventory for $852,000 with cash. Received $73,000 cash from bank borrowings. Received interest for $11,500. Purchased equipment for $483,000 in exchange for common shares. Issued common shares for $370,000 cash. Recorded an unrealized gain of $3,750 on investments accounted for using the FV-NI model. Purchased investments in bonds, reported at amortized cost for $59,600. Declared and paid a dividend of $17,600 (charged to retained earnings). Sold investments in bonds reported at amortized cost, with a carrying amount of $406,800, for $416,200. Received dividends of $5,000 on FV-NI investments. Calculate the amount that Marigold should report as net cash provided (used) by investing activities on its statement of cash flows under IFRS. Under IFRS, assume Marigold adopts the policy of…