Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Chapter 13, Problem 25E
Estimate Sales Revenues
Friendly Financial has $160 million in consumer loans with an average interest rate of 12.5 percent. The bank also has $96 million in home equity loans with an average interest rate of 8 percent. Finally, the company owns $20 million in corporate securities with an average rate of 5 percent.
Managers at Friendly Financial estimate that next year its consumer loan portfolio will rise to $168 million and the interest rate will fall to 10.5 percent. They also estimate that its home equity loans will fall to $80 million with an average interest rate of 9 percent, and its corporate securities portfolio will increase to $25 million with an average rate of 6 percent.
Required
Estimate Friendly Financial’s revenues for the coming year.
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Gladys Bank and Trust has $430 million in consumer loans with an average interest rate of 7.95 percent. The bank also has $310
million in home equity loans with an average interest rate of 5 percent. Finally, the company owns $130 million in government
securities with an average rate of 3 percent.
Managers at Gladys Bank and Trust estimate that next year its consumer loan portfolio will fall to $390 million and the interest rate will
increase to 9.45 percent. They also estimate that its home equity loans will increase to $350 million with an average interest rate of 7
percent, and its government securities portfolio will increase to $145 million with an average rate of 13.50 percent.
Required:
Estimate the revenues for the coming year for Gladys Bank and Trust.
Note: Enter your answer in thousands of dollars.
Interest revenue
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Gladys Bank and Trust has $440 million in consumer loans with an average interest rate of 8.05 percent. The bank also has $320
million in home equity loans with an average interest rate of 5 percent. Finally, the company owns $140 million in government
securities with an average rate of 3 percent.
Managers at Gladys Bank and Trust estimate that next year its consumer loan portfolio will fall to $400 million and the interest rate will
increase to 9.55 percent. They also estimate that its home equity loans will increase to $360 million with an average interest rate of 7
percent, and its government securities portfolio will increase to $155 million with an average rate of 14.50 percent.
Required:
Estimate the revenues for the coming year for Gladys Bank and Trust.
Note: Enter your answer in thousands of dollars.
Interest revenue
CARRER
You are considering investing in Dakota's Security Services. You have been able to locate the following information on the firm: Total
assets are $32.6 million, accounts receivable are $4.46 million, ACP is 25 days, net income is $4.83 million, and debt-to-equity is 1.3
times. All sales are on credit. Dakota's is considering loosening its credit policy such that ACP will increase to 30 days. The change is
expected to increase credit sales by 6 percent. Any change in accounts receivable will be offset with a change in debt. No other
balance sheet changes are expected. Dakota's profit margin will remain unchanged.
How will this change in accounts receivable policy affect Dakota's net income, total asset turnover, equity multiplier, ROA, and ROE?
Note: Do not round intermediate calculations. Enter your answer in millions of dollars. Round your answers to 2 decimal places.
Use 365 days a year.
Net income
Total asset turnover
Equity multiplier
ROA
ROE
million
times
times
%
%
Chapter 13 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - What role does the master budget play in the...Ch. 13 - What problems might arise if a firm relies solely...Ch. 13 - What is the coordinating role of budgeting?Ch. 13 - Prob. 7RQCh. 13 - Write out the inventory equation that is used to...Ch. 13 - What makes creating budgets for marketing and...Ch. 13 - Prob. 10RQ
Ch. 13 - Preparing a budget is a waste of time. The...Ch. 13 - In the Business Application feature, Using the...Ch. 13 - Prob. 13CADQCh. 13 - Would the budgeting plans for a company that uses...Ch. 13 - Government agencies are limited in spending by...Ch. 13 - What is the difference between the planning and...Ch. 13 - When might the master budget start with a forecast...Ch. 13 - In some organizations (firms, universities,...Ch. 13 - Our cash budget shows a surplus for the quarter,...Ch. 13 - Your boss asks for your estimate on the costs of a...Ch. 13 - The chapter identified four techniques used for...Ch. 13 - Role of Budgets and Plans
Cosmic Corporation is a...Ch. 13 - Human Element in Budgeting
Roller Partners is a...Ch. 13 - Estimate Sales Revenues Stubs-R-Us is a local...Ch. 13 - Estimate Sales Revenues Friendly Financial has 160...Ch. 13 - Estimate Sales Revenues Larson, Inc., manufactures...Ch. 13 - Estimate Production Levels Offenbach Son has just...Ch. 13 - Estimate Sales Levels Using Production Budgets...Ch. 13 - Estimate Inventory Levels Using Production Budgets...Ch. 13 - Estimate Production Levels: Capacity Constraints...Ch. 13 - Prob. 31ECh. 13 - Estimate Purchases and Cash Disbursements Midland...Ch. 13 - Estimate Purchases and Cash Disbursements Lakeside...Ch. 13 - Estimate Cash Disbursements Cascade, Ltd., a...Ch. 13 - Estimate Cash Collections Minot Corporation is...Ch. 13 - Estimate Cash Collections Ewing Company is...Ch. 13 - Estimate Cash Receipts Scare-2-B-U (S2BU)...Ch. 13 - Estimate Cash Receipts Varmit-B-Gone is a pest...Ch. 13 - Prepare Budgeted Financial Statements
Refer to the...Ch. 13 - Prepare Budgeted Financial Statements Cycle-1 is a...Ch. 13 - Prepare Budgeted Financial Statements Carreras Caf...Ch. 13 - Budgeting in a Service Organization Executive...Ch. 13 - Prob. 43ECh. 13 - Prob. 44ECh. 13 - Prob. 45ECh. 13 - Prob. 46ECh. 13 - Sensitivity Analysis Sanjanas Sweet Shoppe...Ch. 13 - Sensitivity Analysis Classic Limo, Inc., provides...Ch. 13 - Prob. 49ECh. 13 - Prob. 50ECh. 13 - Prepare Budgeted Financial Statements The...Ch. 13 - Prob. 52PCh. 13 - Prepare Budgeted Financial Statements Gulf States...Ch. 13 - Prob. 54PCh. 13 - Prob. 55PCh. 13 - Prepare a Production Budget Haggstrom, Inc.,...Ch. 13 - Sales Expense Budget SPU, Ltd., has just received...Ch. 13 - Budgeted Purchases and Cash Flows Mast Corporation...Ch. 13 - Prepare Budgeted Financial Statements HomeSuites...Ch. 13 - Prob. 60PCh. 13 - Comprehensive Budget Plan Brighton, Inc.,...Ch. 13 - Comprehensive Budget Plan Panther Corporation...Ch. 13 - Budgeted Financial Statements in a Retail...Ch. 13 - Cash Budgets and Sensitivity Analysis in a Retail...Ch. 13 - Prob. 66IC
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