FIN 200: Assignment Workbook Week 2 Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Finance 200 Assignment Workbook Week 2 Solution

Week 2 CheckPoint: Financial Ratios

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Using the financial statements for The Niara Corporation, calculate the 13 basic ratios found in the chapter.
You must show your work to get credit.

Niara Corporation
Income Statement
For the Year Ended December 31, 2009
Sales $ 2,200,000
Cost of goods sold 1,300,000
Gross profits 900,000
Selling and administrative expense 420,000
Depreciation expense 150,000
Operating income 330,000
Interest expense 90,000
Earnings before taxes 240,000
Taxes 80,000
Earnings after taxes 160,000
Preferred stock dividends 10,000
Earnings available to common stockholders $ 150,000
Shares outstanding 120,000
Earnings per share $1.25

Statement of Retained Earnings
For the Year Ended December 31, 2009
Retained earnings, balance, January 1, 2009 $ 500,000
Add: Earnings available to common stockholders, 2009 150,000
Deduct: Cash dividends declared and paid in 2009 30,000
Retained earnings, balance, December 31, 2009 $ 620,000

Niara Corporation
Balance Sheet
December 31, 2009
Year‐End
Assets 2009
Current assets:
Cash $ 135,000
Accounts receivable (net) 340,000
Inventory 405,000
Prepaid expenses 25,000
Total current assets 905,000
Investments (long‐term securities) 50,000
Plant and equipment 2,450,000
Less: Accumulated depreciation 1,150,000
Net plant and equipment 1,300,000
Total assets $ 2,255,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 475,000
Notes payable 400,000
Accrued expenses 60,000
Total current liabilities 935,000
Long‐term liabilities:
Bonds payable, 2009 80,000
Total liabilities 1,015,000
Stockholders’ equity:
Preferred stock, $100 par value 90,000
Common stock, $1 par value 120,000
Capital paid in excess of par 410,000
Retained earnings 620,000
Total stockholders’ equity 1,240,000
Total liabilities and stockholders’ equity $ 2,255,000

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*NEW* ACC 225: Week Eight Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 8 Solution

1. CheckPoint: Internal Control and Bank Reconciliations (Post in the Individual Forum – Due Day 2)
• Review Demonstration problems 1 and 2 in Chapter 8
• Resource: Fundamental Accounting Principles, pp. 336 & 337
• Complete Exercises 8-5 on p. 336 and 8-8 & 8-9 on p. 337
• Imagine there is a $10 shortage in the petty cash for Exercise 8-5; explain in 50-100 words how the shortage would be recorded.

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2. Assignment: Internal Control and Bank Reconciliations (Post in the Individual Forum – Due Day 6)
• Resources: Fundamental Accounting Principles, pp. 338 & 339, 341 and 342
• Complete Problems 8-1B on p. 341, 8-3B on p. 342, & 8-4A (including the Analysis Component) on pp. 338–339. When responding to the cases in 8-1B, think critically about each case. Identify the principles of internal control that has been violated and provide an explanation of why you think that principle has been violated. Identify the consequences of the actions described in the cases. Make a recommendation for what the business should do to ensure adherence to principles of internal control.
• List at least three detailed questions you had while completing the problems.
• Use the spreadsheet in Appendix B available on the student Web site to complete Problem 8-4A. Use the tabs labeled SP08-04A and Given P08-04A

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*NEW* ACC 225: Week Seven Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 7 Solution

2. CheckPoint: Accounting Information Systems and Special Journals (Post in the Individual Forum – Due Day 2)
• Resource: Fundamental Accounting Principles, pp. 289, 290, & 291
• Complete Quick Study questions 7-1 & 7-2 on p. 289, Quick Study 7-4 on p. 290 and Exercises 7-1, 7-4, 7-7, & 7-10 on pp. 290–291.

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*NEW* ACC 225: Week Six Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 6 Solution

1. CheckPoint: Computing Inventory Balances and Lower of Cost or Market (Post in the Individual Forum – Due Day 2)
• Re-read Chapters 5 and 6
• Review Demonstration problem and solution. Try to complete sections on your own before reviewing solution.
• Resource: Fundamental Accounting Principles, pp. 247–249
• Complete Quick Study question 6-1 on p. 247 and Exercise 6-3 on p. 247 & Problem 6-3A on p. 252.

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2. Assignment: Estimating Inventory and Preparing Multiple-Step and Single-Step Income Statements (Post in the Individual Forum – Due Day 6)
• Resources: Fundamental Accounting Principles, pp. 251 & 256
• Complete Problems 5-4A on p. 212, 6-1B on p. 254, & 6-6A on p. 253 and 6-7A on p. 254.

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*NEW* ACC 225: Week Five Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 5 Solution

2. CheckPoint: Inventory Systems and Calculating Revenues, Expenses, and Income (Post in the Individual Forum – Due Day 5)

• Resource: Fundamental Accounting Principles, pp. 206, 208, & 209.
• Complete additional modified Exercise in Excel that is posted in the main forum for week 5. Copy and paste the Excel format and complete.
• Complete Quick Study question 5-1 on p. 205, Quick Study question 5-9 on p. 206 and Exercise 5-8 on pp. 208.

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*NEW* ACC 225: Week Four Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 4 Solution

1. CheckPoint: Preparing Balance Sheets and Adjusting entries (Post in the Individual Forum – Due Day 2)
• Review: pgs 136-138 and Exhibit 4.1 on how to create a worksheet
• Resource: Fundamental Accounting Principles, pp. 156 & 159-160
• Complete Quick Study question 4-2 on p. 156 and Exercises 4-4 & 4-9 on p. 159-160.

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2. Assignment: Preparing Entries and Statements (Post in the Individual Forum – Due Day 6)
• Resources: Fundamental Accounting Principles, pp. 167-168
• Complete problems 4-2B and 4-3B. When responding to the analysis component of 4-3B, think critically about the possible errors that are described. In your answer, carefully analyze the worksheet as if the errors were made and present the evidence for your explanation.

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*NEW* ACC 225: Week Three Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 3 Solution

2. CheckPoint: Adjustments and Accrual and Cash Basis Accounting (Post in the Individual Forum – Due Day 5)
• Resource: Fundamental Accounting Principles, pp. 116–118 & 120
• Complete Quick Study questions 3-1 & 3-9 on pp. 116 & 117 and Exercises 3-1 & 3-7 on pp. 118 & 120.

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DQ2 – Due Day 4 (Post in the Main forum in the thread I have created for DQ2)
Post must be 150-300 words.
• The Ritz Manor is a popular seaside resort. A double room costs $250 for one night. To reserve a room, guests must pay one night’s stay in advance. On each floor of the hotel, Vendalite Company operates vending machines with energy bars, juices, and other snacks for guests. Vendalite stocks the machines and collects revenue every week. Total average weekly revenue from these machines is $750. The Ritz Manor is entitled to 30% of the revenue from the machines. Vendalite sends a check to the Ritz Manor once at the end of each quarter for the resort’s share of the revenue.
o Based on this information, what are the adjusting entries Ritz Manor will need to record?
o Include in your response the amounts of the adjustments, which accounts are affected and why, and explain in detail how you determined the amounts.

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*NEW* ACC 225: Week Two Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 2 Solution

1. CheckPoint: Debits and Credits (Post in the Individual Forum – Due Day 2)

• Resource: Fundamental Accounting Principles, p. 74 and p. 77 (also review Chapter 2)
• Post your answers to Quick Study questions 2-1, 2-4, and 2-5 (p. 74) and Exercise 2-9 (p. 77).

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2. Assignment: Preparing Journal Entries and Trial Balances (Post in the Individual Forum – Due Day 6)

• Resource: Fundamental Accounting Principles, pp. 76 & 80
• Complete Exercises 2-6 and 2-8 on p. 76 and 77 and Problem 2-3A on p. 81.

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ACC 225: Week Eight Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 8 Solution

CheckPoint: Internal Control and Bank Reconciliations
• Resource: Fundamental Accounting Principles, pp. 335 and 336
• Due Date: Day 4 [Individual] forum
• Complete Quick Study question QS 8-6 on p. 335, and Exercises 8-3 and 8-4 on p. 336.
• Post your answers as an attachment.
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Assignment: Internal Control and Bank Reconciliations
• Resource: Fundamental Accounting Principles, pp. 338 and 339
• Due Date: Day 7 [Individual] forum
• Complete Problems 8-1A, 8-3A, and 8-4A (including the Analysis Component) on pp.
338-339. When responding to the cases in 8-1A, be sure to think critically about each
case. Identify the principles of internal control that has been violated, and give an
explanation of why you think that principle has been violated. Identify the consequences
of the actions described in the cases. Make a recommendation for what the business
should do to ensure adherence to principles of internal control.
• Use the spreadsheet in Appendix B available on aXcess to complete Problem 8-4A. Be
sure to use the tabs labeled SP08-04A and Given P08-04A
• Post your answers as an attachment.
Click here for the SOLUTION

ACC 225: Week Seven Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 7 Solution

CheckPoint: Accounting Information Systems and Special Journals

• Resource: Fundamental Accounting Principles, pp. 289, 290, and 291
• Due Date: Day 5 [Individual] forum
• Complete Quick Study questions QS 7-1 and QS 7-3 on p. 289, and Exercises 7-1, 7-4,
7-7, and 7-10 on pp. 290-291.
• Post your answers as an attachment.
Click here for the SOLUTION

ACC 225: Week Six Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 6 Solution

CheckPoint: Computing Inventory Balances and Lower of Cost or Market
• Resource: Fundamental Accounting Principles, pp. 247-249
• Due Date: Day 4 [Individual] forum
• Complete Quick Study question QS 6-1 on p. 247 and Exercises 6-1 and 6-5 on pp. 248
and 249.
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Assignment: Estimating Inventory and Preparing Multiple-Step and Single-Step Income
Statements
• Resource: Fundamental Accounting Principles, pp. 251 and 256
• Due Date: Day 7 [Individual] forum
• Complete Problems 5-4A on p. 212, 6-1A on p. 251, and 6-6B and 6-7B on p. 256.
• Post your answers as an attachment.
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ACC 225: Week Five Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 5 Solution

Discussion Question 2
• Due Date: Day 4 [Main] forum
• Post your response to the following: Read the BTN5-3 Ethics Challenge on p. 218 of the
text. Discuss the ethics of what Amy is doing. Are there any consequences to her
actions? How does the store account for Amy’s returns?
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CheckPoint: Inventory Systems and Calculating Revenues, Expenses, and Income
• Resource: Fundamental Accounting Principles, pp. 206, 208, and 209.
• Due Date: Day 5 [Individual] forum
• Complete Quick Study question QS 5-8 on p. 206 and Exercises 5-9 and 5-13 on pp.
208-209.
• Post your answers as an attachment.
Click here for the SOLUTION

ACC 225: Week Four Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 4 Solution

CheckPoint: Preparing Balance Sheets and Statements

• Resource: Fundamental Accounting Principles, pp. 156 and 159
• Due Date: Day 4 [Individual] forum
• Complete Quick Study question QS 4-2 on p. 156 and Exercises 4-4 and 4-5 on p. 159.
• Post your answers as an attachment.
Click here for the SOLUTION


Assignment: Preparing Entries and Statements

• Resources: Fundamental Accounting Principles, pp. 165-167
• Due Date: Day 7 [Individual] forum
• Complete Problems 4-5A and 4-6A. When responding to the analysis component of 4-
5A, be sure to think critically about the possible errors that are described. In your answer,
be sure to carefully analyze the worksheet as if the errors were made and present the
evidence for your explanation. Identify the consequences of the errors and describe their
impact on the financial statements. Explain whether the error is likely to be discovered
when completing the worksheet.
• Post your answers as an attachment.
Click here for the SOLUTION

ACC 225: Week Three Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 3 Solution

Discussion Question 2

• Due Date: Day 4 [Main] forum
• Post your response to the following: The Ritz Manor is a popular seaside resort. A
double room costs $220 for one night. In order to reserve a room, guests must pay one
night’s stay in advance. On each floor of the hotel, Vendalite Company operates vending
machines with energy bars, juices, and other snacks for guests. Vendalite stocks the
machines and collects revenue every week. Total average weekly revenue from these
machines is $720. The Ritz Manor is entitled to 30% of the revenue from the machines.
Vendalite sends a check to the Ritz Manor once at the end of each quarter for the resort’s
share of the revenue.
o Based on this information, what type of adjusting entries does the Ritz Manor have?
o How are the amounts of these adjustments determined?
o Which accounts are affected?
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CheckPoint: Adjustments and Accrual and Cash Basis Accounting

• Resource: Fundamental Accounting Principles, pp. 116-118 and 120
• Due Date: Day 5 [Individual] forum
• Complete Quick Study questions QS 3-1 and QS 3-9 on pp. 116 and 117 and Exercises
3-1 and 3-7 on pp. 118 and 120.
• Post your answers as an attachment.
Click here for the SOLUTION

ACC 225: Week Two Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 2 Solution

CheckPoint: Debits and Credits

• Resource: Fundamental Accounting Principles, p. 74
• Due Date: Day 4 [Individual] forum
• Post your answers to Quick Study questions QS 2-3, QS 2-4, and QS 2-5.

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Assignment: Preparing Journal Entries and Trial Balances

• Resource: Fundamental Accounting Principles, pp. 76 and 80
• Due Date: Day 7 [Individual] forum
• Complete Exercises 2-4 and 2-5 on p. 76 and Problem 2-2A on p. 80.
• Post your answers as an attachment.

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ACC 225: Week One Solution

ACC 225

Axia College of University of Phoenix (UoP)

Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

ACC 225 Week 1 Solution

Exercises: Accounting and Business Organizations

• Resource: Fundamental Accounting Principles, p. 30
• Due Date: Day 5
• Post your answers to Exercises 1-1 and 1-4

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FIN 200: Quiz and Final Exam

FIN 200: Quiz and Final Exam: Complete and Up-to-Date

Introduction to Finance: Harvesting the Money Tree

Axia College of University of Phoenix (UoP)

Foundations of Financial Management
Block Hirt Danielsen

Last Update: July 14, 2010

Complete Compilation/ Testbank of FIN 200 Quizzes and Final Exam

Week 2 Quiz TESTBANK CLICK HERE


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Fin 200 CheckPoint: Week 2 Two Quiz
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Fin 200 Final Exam

FIN 200: Week Eight Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week 8 Solution

CheckPoint: Time Value of Money

• Resource: Ch. 7 of Foundations of Financial Management
• Due Date: Day 5 [Individual forum]
• Write a 200- to 300-word description of the four time value of money concepts: present value, present value of an annuity, future value, and future value of annuity. Describe the characteristics of each concept and give an example of when each would be used.

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FIN 200: Week Seven Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week 7 Solution

CheckPoint: Loan Scenario

• Resource: Ch. 8 of Foundations of Financial Management
• Due Date: Day 7 [post to the Individual forum]
• Complete the Comprehensive Problem: Midland Chemical Co. on pp. 250-251.
• Post the assignment as an attachment.

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Midland Chemical Co. is negotiating a loan from Manhattan Bank and Trust. The
small chemical company needs to borrow $500,000.
The bank offers a rate of 8¼ percent with a 20 percent compensating balance
requirement, or as an alternative, 9¾ percent with additional fees of $5,500 to cover
services the bank is providing. In either case the rate on the loan is floating (changes as
the prime interest rate changes), and the loan would be for one year.

a. Which loan carries the lower effective rate? Consider fees to be the equivalent of
other interest.

b. If the loan with a 20 percent compensating balance requirement were to be paid
off in 12 monthly payments, what would the effective rate be? (Principal equals
amount borrowed minus the compensating balance.)

c. Assume the proceeds from the loan with the compensating balance requirement
will be used to take cash discounts. Disregard part b about installment payments
and use the loan cost from part a.
If the terms of the cash discount are 1.5/10, net 50, should the firm borrow the funds
to take the discount?

d. Assume the firm actually takes 80 days to pay its bills and would continue to
do so in the future if it did not take the cash discount. Should it take the cash
discount?

e. Because the interest rate on the loans is floating, it can go up as interest rates go
up. Assume that the prime rate goes up by 2 percent and the quoted rate on the
loan goes up the same amount. What would then be the effective rate on the loan
with compensating balances? Convert the interest to dollars as the first step in
your calculation.

f. In order to hedge against the possible rate increase described in part e, Midland
decides to hedge its position in the futures market. Assume it sells $500,000
worth of 12-month futures contracts on Treasury bonds. One year later, interest
rates go up 2 percent across the board and the Treasury bond futures have gone
down to $488,000. Has the firm effectively hedged the 2 percent increase in
interest rates on the bank loan as described in part e? Determine the answer in
dollar amounts.

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FIN 200: Week Six Solution

FIN 200

Axia College of University of Phoenix (UoP)

Introduction to Finance: Harvesting the Money Tree

Fin 200 Week 6 Solution

CheckPoint: Credit Policy Decisions

• Resource: Ch. 7 of Foundations of Financial Management
• Due Date: Day 5 [Individual forum]
• Complete Problem 17 on p. 220.

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Collins Office Supplies is considering a more liberal credit policy to increase
sales, but expects that 9 percent of the new accounts will be uncollectible. Collection
costs are 5 percent of new sales, production and selling costs are 78 percent,
and accounts receivable turnover is five times. Assume income taxes of
30 percent and an increase in sales of $80,000. No other asset buildup will be
required to service the new accounts.
a. What is the level of accounts receivable needed to support this sales
expansion?
b. What would be Collins’s incremental aftertax return on investment?
c. Should Collins liberalize credit if a 15 percent aftertax return on investment
is required?
Assume Collins also needs to increase its level of inventory to support
new sales and that inventory turnover is four times.
d. What would be the total incremental investment in accounts receivable and
inventory to support an $80,000 increase in sales?
e. Given the income determined in part b and the investment determined in
part d, should Collins extend more liberal credit terms?

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