Advertising expenditures 78,000 Cost of goods sold 2,433,000 Depreciation 78,000
ID: 2567150 • Letter: A
Question
Advertising expenditures 78,000
Cost of goods sold 2,433,000
Depreciation 78,000
Gross sales 3,210,000
Interest expenses 64,000
Lease payment 52,000
Management salary 240,000
Material purchase 2,425,000
R&D expenditures 35,000
Repair and maintenance costs 22,000
Returns and allowances 48,000
Taxes 51,000
Treasury stock 20,000
——————————————
Gross fixed assets 284,950
Inventory 136,500
Accrued expenses 11,850
Accumulated depreciation 82,310
Notes payable 32,570
Preferred stock 8,000
Retained earnings 89,280
Current portion of L-T debt 4,080
Long-term debt 134,300
Accounts receivable 105,770
Additional paid-in capital 71,600
Accounts payable 50830
Common stock ($0.50 par) 60,000
Cash & Equivalents ?
Marketable securities 20,500
——————————————
Assuming that ZEBRA’ shares were trading at $5, what is the Enterprise Value of ZEBRA as of the end of 2016? [Hint: you would need to determine the number of shares outstanding.]
Explanation / Answer
Common stock=$60,000
Number of shares outstanding=60000/0.5=120,000
Less: Treasury stock=$20,000
Number of treasury shares=20000/0.5=40,000
Number of shares outstanding=(120000-40000)=80,000
Price per share=$5
Market Capitalization=5*80000=$400,000
Debit
Credit
Advertising expenditures
$78,000
Cost of goods sold
$2,433,000
Depreciation
$78,000
Gross sales
$3,210,000
Interest expense
$64,000
lease payment
$52,000
Management salary
$240,000
R&D expenditure
$35,000
Repair & maintenance cost
$22,000
Return & allowances
$48,000
Taxes
$51,000
Treasury stock
$20,000
Gross Fixed assets
$284,950
Inventory
$136,500
Accrued expenses
$11,850
Accumulated depreciation
$82,310
Notes patable
$32,570
Preferred stock
$8,000
Retained earning
$89,280
Current portion of L-T debt
$4,080
Long term debt
$134,300
Accounts receivable
$105,770
Additional paid in capital
$71,600
Accounts payable
$50,830
Common stock
$60,000
Cash & Equivalent
$86,100
Marketable securities
$20,500
TOTAL
$3,754,820
$3,754,820
Enterprize Value=Market Capitalization+ Total debt-(Cash & Cash equivalent)-(Marketable securities)
Enterprize Value=$400,000+$4,080+$134,300-($86,100+$20,500)= $431,780
Enterprize value= $431,780
Debit
Credit
Advertising expenditures
$78,000
Cost of goods sold
$2,433,000
Depreciation
$78,000
Gross sales
$3,210,000
Interest expense
$64,000
lease payment
$52,000
Management salary
$240,000
R&D expenditure
$35,000
Repair & maintenance cost
$22,000
Return & allowances
$48,000
Taxes
$51,000
Treasury stock
$20,000
Gross Fixed assets
$284,950
Inventory
$136,500
Accrued expenses
$11,850
Accumulated depreciation
$82,310
Notes patable
$32,570
Preferred stock
$8,000
Retained earning
$89,280
Current portion of L-T debt
$4,080
Long term debt
$134,300
Accounts receivable
$105,770
Additional paid in capital
$71,600
Accounts payable
$50,830
Common stock
$60,000
Cash & Equivalent
$86,100
Marketable securities
$20,500
TOTAL
$3,754,820
$3,754,820
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