Wade Blasingame Co. has the following:

Revenues: $25,000

COGS: $10,000

Restructuring expense: $500

D&A: $2,000

Gain from legal settlement: $1,000

Accounts Receivable: $600

R&D: $1,000

Debt: $50,000

SG&A: $5,000

Capex: $2,000

Interest Rate: 10%

Net Income: $1,500

Dividend Payout Ratio: 25%

What is the company's tax rate? After excluding for non-recurring items, what is the company's operating (EBIT) margin? After excluding for non-recurring items, what is the company's EBITDA?

2. The book value of equity in a business will grow when:

I. a company generates interest income

II. a company issues less dividends than net income during the period

III. a company generates more cash sales than credit sales

I only II only III only I and II only I, II, and III

3. In 2014, Rearview Co. generated a pretax loss of $100 million. The company expects to generate $50 million in pretax income in 2015. Assume a 40% tax rate, no prior net operating losses, and that pre-tax income was $0 in 2012 and 2013. Which of the following statements is CORRECT:

2014 GAAP-based tax expense was $0; 2015 year-ending deferred tax assets were $20 million 2014 GAAP-based tax benefit was $40 million; 2015 year-ending deferred tax assets were $40 million 2014 GAAP-based tax benefit was $40 million; 2015 year-ending deferred tax assets were $20 million 2014 GAAP-based tax expense was $0; 2015 GAAP-based tax expense was $20 million

4. February 1, 2014: Mover n Shaker acquires 1,000 shares of public firm Prize Possession Inc. at $10 per share for short-term profit potential, and are classified as trading securities. Prize Possession has 100m shares outstanding.

Debit Non-controlling (minority) interest $10,000; Credit Cash $10,000 Debit Marketable Securities $10,000; Credit Cash $10,000 Debit Cash $10,000; Credit Investments $10,000 Debit Common Equity $10,000; Credit Cash $10,000

5. May 1, 2014: On good news, Prize Possession Inc.s share price rises to $15 per share.

Debit Marketable Securities $5,000; Credit Retained Earnings $5,000 No effect on the financial statements Debit Non-controlling (minority) interest $5,000; Credit Retained Earnings $5,000 Credit Marketable Securities $5,000; Debit Retained Earnings $5,000 Debit Marketable Securities $15,000; Credit Retained Earnings $15,000

6. July, 2014: Mover n Shaker sells 25% of its holdings in Prize Possession for $5,000 (Before any mark to market adjustments of the value of remaining holding in Prize Possession).

Debit Cash $5,000; Credit Marketable Securities $5,000 Debit Cash $5,000; Credit Marketable Securities $3,750; Credit Retained Earnings $1,250 Credit Cash $5,000; Debit Marketable Securities $3,750; Debit Goodwill $1,250 Debit Cash $5,000; Credit Marketable Securities $1,250; Credit Retained Earnings $3,750