E5-8 consolidated income statement with downstream sales the separate incomes (which do not include investment income) of pat corporation and sal corporation, its 80 percent-owned subsidiary, for 2011 were determined as follows (in thousands): pat sal sales $1,600 $400 less: cost of sales 800 160 gross profit 800 240 other expenses 400 120 separate incomes $ 400 $120 during 2011, pat sold merchandise that cost $80,000 to sal for $160,000, and at december 31, 2011, half of these inventory items remained unsold by sal. required: prepare a consolidated income statement for pat corporation and subsidiary for the year ended december 31, 2011.

Increases in output and increases in the inflation rate have been linked to

Croy inc. has the following projected sales for the next five months: month sales in units april 3,850 may 3,875 june 4,260 july 4,135 august 3,590 croy’s finished goods inventory policy is to have 60 percent of the next month’s sales on hand at the end of each month. direct material costs $2.50 per pound, and each unit requires 2 pounds. raw materials inventory policy is to have 50 percent of the next month’s production needs on hand at the end of each month. raw materials on hand at march 31 totaled 3,741 pounds. 1. determine budgeted production for april, may, and june. 2. determine the budgeted cost of materials purchased for april, may, and june. (round your answers to 2 decimal places.)

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.