Which of the following groups of accounts BOTH normally have a debit balance?

A. Assets and Liabilities
B. Liabilities and Owner's equity
C. Revenues and Expenses
D. Assets and Expenses

Assume the following relationships for the Caulder Corp.: $$ \begin{matrix} \text{Sales/Total assets} & \text{1.3 }{\times}\\ \text{Return on assets (ROA)} & \text{4.0\\%}\\ \text{Return on equity (ROE)} & \text{8.0\\%}\\ \end{matrix} $$ Calculate Caulder’s profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital.

A vacant lot acquired for $100,000 is sold for$350,000 in cash. What is the effect of the sale on the total amount of the seller’s (1) assets, (2) liabilities, and (3) owner’s equity?

Refer to Samsung’s 2013 balance sheet in Appendix A near the end of the book. Confirm that its total assets equal its total liabilities plus total equity.

Best Buy Co., Inc., reported the following amounts in its February 3, 2018, and January 28, 2017, financial statements.

($millions)	2018	2017
Sales revenue	$42,151	$39,403
Cost of sales	32,275	29,963
Net income (loss)	1,000	1,228
Total assets	13,049	13,856
Stockholders' equity	3,612	4,709

Compute Best Buy's debt-to-equity ratio as of February 3, 2018.

For the items listed below, indicate how the item affects equity (increase, decrease, or no impact).

Item	Increase? Decrease? or No Impact?
Revenues
Gains
Losses
Drawings
Investments

Determine in which financial statement the account would most likely appear: income statement (1), balance sheet (B), or statement of owner's equity (E).
 Withdrawals

Determine the financial statement on which the item below appears. Use I for income statement. E for statement of owner's equity, and B for balance sheet.
 Wages Payable

A company proposes to include in its SEC registration statement a balance sheet showing its subordinate debt as a portion of stockholders' equity. Will the SEC allow this? Why or why not?

Operating activities include cash outflows to

a. purchase: property and equipment.
b. purchase debt or equity securities.
c. make loans to other entities.
d. suppliers for inventory.

M&M and Taxes $\color{#c34632}\text{[Lo2]}$ In previous Problem, what is the cost of equity after recapitalization? What is the WACC? What are the implications for the firm's capital structure decision?

a. Show that the logistic function $f(x)=\frac{N}{1+A b^{-x}}$ can be written in the form $f(x)=\frac{N b^{x}}{A+b^{x}}$. b. Use the result of part (a) and a suitable substitution to show that $\int \frac{N}{1+A b^{-x}} d x=\frac{N \ln \left(A+b^{x}\right)}{\ln b}+C$. The rate of graduation of private high school students in the United States for the period 1994-2008 was approximately $r(t)=220+\frac{110}{1+3.8(1.27)^{-t}}$ thousand students per year $(0 \leq t \leq 14)$ t years since 1994. Use the result of part (b) to estimate the total number of private high school graduates over the period 2000-2008.

Once Bitten Corp. applies no debt. The weighted average cost of capital is 9.5 percent. If the current market value of the equity is $20.4 million and there are no taxes, what is EBIT?

Indicate whether each of the following types of transactions will either decrease owner’s equity:

1. owner’s investments
2. revenues
3. expenses
4. owner’s withdrawals