Question

1.- Chihuahuas Inc. reported the following before-tax items during the current year: Sales revenue $3,000 Selling and administrative expenses 1,250 Foreign currency translation gain 300 Gain on discontinued operations 250 Interest expense 200 Chihuahuas’ effective tax rate is 35%. What is Chihuahuas’ income from continuing operations after income taxes (rounded)?

2.- The Payne Corporation reported net income of $4,500,000 for the fiscal year ended December 31, 2018. Preferred stock dividends declared during the year were $450,000. Payne had 9 million shares of common stock outstanding at the beginning of the year, and issued an additional 4.5 million shares on September 30, 2018. What is Payne’s basic EPS for 2018 (rounded)?

3.- The A. Jones Consulting Group reported net income of $1,250,000 for its fiscal year ended December 31, 2018. In addition, during the year, the company experienced a before-tax gain on foreign currency translation adjustment of $725,000 and had before-tax unrealized gains on investment securities of $250,000. The company’s effective tax rate on all items affecting comprehensive income is 40%. What is A. Jones’s total comprehensive income (loss)?

4.- Topgolf Inc. paid $450 million for salaries to employees during 2018. There were $36 million and $54 million in salaries payable at the beginning and end of 2018, respectively. What was Topgolf’s salaries expense for 2018?

5.- Wilson Inc. has total assets of $1,400,000 and total long-term liabilities of $1,000,000 (no current liabilities). The industry average debt-to-equity ratio is 1.25. Calculate Wilson’s debt-to-equity ratio and indicate whether the company’s default risk is higher or lower than the average of other companies in the industry.

Answer 1

1) Chihuahuas income from continuing opensations after taxes. particulars Sales 3000 1250) Selling & adminstrative expenses interest expense (200) income before taxes o 1550 (-) taxes @ 35% (543) Net income 1007 300 (+) foreign curtency translation adjustment Income from continuing operations 1307

2) payne's basic earnings per share common stock outstanding (i) weighted avevage gmillion shales x 12 months - 4 million shall 12 months 4.5 million shales x 9 months 12 months - 3.375 million sharee 12.375 million share, (1) Earnings altri butable to common stock Net income. 4,500,000 (-) poufereed stock - (450,000) dividend 4,050,000 Earnings Earning per share (Basic) - $4,050,000 12.375 million share = 0.327 per share

income Clos) Oprehensive particulars 1250,000 Net income (500,000) (-) tax @4oy. 150,000 Net income (after faxes) 725000 (+) foreign custency translation adjustment 250000 (ti un realised investment gain on seculities 1,725,000 income Comprehensive 450 4) Topgolf's salary expense for 2018. particulare salaries paid in cash (-) opering outstanding (36) (As closing outstanding 54 Salary expense for 2018 $468 million

Debt Eauity ratio- liabilitics stock holders earuity stock holders eauity = Total – long term liabiliter assets = $1,400,000 - $ 1,000,000 $400,000 ble latio $1,000,000 $ 400,000 - 2.5