Financial Statements of a Manufacturing Firm The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes: Purchased $329,000 of materials Used $282,900 of direct materials in production Incurred $244,000 of direct labor wages Applied factory overhead at a rate of 75% of direct labor cost Transferred $681,500 of work in process to finished goods Sold goods with a cost of $654,700 Sold goods for $1,171,900 Incurred $281,500 of selling expenses Incurred $104,800 of administrative expenses a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Focault Inc. Income Statement For the Month Ended July 31, 20Y2 $fill in the blank 317f7cf97fa4045_2 fill in the blank 317f7cf97fa4045_4 $fill in the blank 317f7cf97fa4045_6 Selling and administrative expenses: $fill in the blank 317f7cf97fa4045_8 fill in the blank 317f7cf97fa4045_10 Total selling and administrative expenses fill in the blank 317f7cf97fa4045_11 $fill in the blank 317f7cf97fa4045_13 b. Determine the inventory balances at the end of the first month of operations. Materials inventory, July 31 $fill in the blank 4796db0b5ff1040_1 Work in process inventory, July 31 $fill in the blank 4796db0b5ff1040_2 Finished goods inventory, July 31 $fill in the blank 4796db0b5ff1040_3 Check My Work

73. calculate the weighted average cost of capital (wacc) based on the following information: the equity multiplier is 1.66; the interest rate on debt is 13%; the required return to equity holders is 22%; and the tax rate is 35%. (a) 15.6% (b) 16.0% (c) 15.0% (d) 16.6% (e) none of the above

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.