On Jan 1 07 SSS buys 100 US Treasury Bonds (face value $1000 each) for the Trading Portfolio. The bonds carry an annual interest coupon of 4% paid semiannually Jan 1 and July 1. Journalize the purchase.

On July 1 the bonds pay interest. Journalize the receipt of the interest payment.

On Aug 1, SSS sells 50 of the bonds at 98

On December 31 SSS makes an adjusting entry for accrual of interest to be received January 1 2008. Show the adjustment for the accrual of interest.

On Dec 31, the bonds are trading at 97. What fair value adjustment, if any, needs to be made?

How will the bonds be shown on the Balance Sheet?

On January 1, 2008 SSS buys 500 shares of Co common stock for $50/share for the stock portfolio as short-term investment. SSSs purchase represents 1% of outstanding Co stock and the company exerts no influence on Co. Journalize the purchase by SSS.

On February 1 Co pays a $1/share dividend. Journalize SSSs receipt of the dividend.

On Feb 15, Co reports $1mm net income. What JE does the company make, if any, to recognize the income?

On March 1 SSS decides to sell 250 shares of its Co stock for $45/share. Journalize SSSs sale of Co stock.

Fast forward to December 31, 2008: The price of Co shares is $49/share. What fair market adjustment does SSS make, if any?

How will this stock investment be presented on the balance sheet?

Jan 1, SSS buys 60,000 shares of Inc at $20/share as a long-term investment in the stock portfolio. The purchase represents 25% of all outstanding Inc stock and SSS has representation on Incs board of directors. Journalize the purchase.

On June 31, 2008 Inc reports net income of $20,000 for its fiscal year ended June 31. Make the journal entry for SSS.

On October 1, Inc pays a $1/share cash dividend. Journalize SSSs receipt of this dividend.

On Dec 31, Inc shares are trading $18/share. What fair value adjustment, if any, needs to be made?

How will this stock be represented on the SSS balance sheet?

Assume the following asset and liability values represent the average values over the year. Also assume all sales are on credit.

Account

Cash $125,000

Accounts Receivable $175,000

Inventory $125,000

Property, Plant

& Equipment $200,000

Current Liabilities $325,000

Long-term Liabilities $275,000

Stockholders Equity $25,000

Total Sales Revenue $800,000

Total Expense $600,000 (includes $250,000 COGS)

Outstanding Shares 100,000

Price per Share $50/shr

What is the Current Ratio?

What is the Acid Test or Quick Ratio?

When would Acid Test Ratio be a better measure of liquidity compared to Current Ratio?

How is Vertical Analysis calculated and what does it communicate?

What is the companys AR Turnover?

Inventory Turnover?

Days in Inventory?

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What is the companys profit margin?

What is the companys Return on Assets?

Return on EQ?

What is another way to calculate ROE?

What is the stocks P/E ratio?

Why would one company have a higher P/E ratio than another?

What is the companys Debt Ratio?

What is most important to a Short Term Creditor?

What is most important to Owners?

What the basic types of Financial Analysis?