Your Questions About Stocks And Bonds 2012

Daniel asks…

On a day when both stocks and bonds decrease in value, what market instruments are typically rising in value?

For instance, March 14, 2012

financi4 answers:

Cash -specifically short term treasuries, think 91 days or less.

Thomas asks…

Financial Account Questions?

Hey guys, any additional explanation is appreciated, but not needed. I’ll make sure to choose best answer. Thanks again!

1. Panhandle Corporation was organized on January 3, 2012. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2012, Panhandle had the following transactions relating to shareholders’ equity:

Issued 30,000 shares of common stock at $7 per share.
Issued 20,000 shares of common stock at $8 per share.
Reported a net income of $100,000.
Paid dividends of $50,000.

What is total paid-in capital at the end of 2012?

a. $420,000.

b. $370,000.

c. $470,000.

d. $320,000.

2. For the issuer of 20-year bonds, the carrying value using the effective interest method would decrease each year if the bonds were sold at a:

———Discount———-Premium
a)——–no———————–no
b)——–no———————–yes
c)——–yes———————yes
d)——-yes————————no

a. Option a

b. Option b

c. Option c

d. Option d

3. X2 issued callable bonds on January 1, 2012. The bonds pay interest annually on December 31 each year. X2’s accountant has projected the following amortization schedule from issuance until maturity:

date———–cash—–Interest——… in———carrying value
1/1/10———paid—–expense—-car… value——-$104,212
12/31/11—$7,000—$6,253——-$747-…
12/31/12—$7,000—$6,208——-$792-…
12/31/13—$7,000—$6,160——-$840-…
12/31/14—$7,000—$6,110——-$890-…
12/31/15—$7,000—$6,057——-$943-…

X2 buys back the bonds for $103,000 immediately after the interest payment on 12/31/12 and retires them. What gain or loss, if any, would X2 record on this date?

a. No gain or loss.

b. $3,000 gain.

c. $1,202 loss.

d. $327 loss.

financi4 answers:

I have seen this atleast 3 times as well.

Michael asks…

Has the buildup in plant and equipment been financed in a satisfactory manner?

CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 2008
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,200,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000
Gross profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,000
Selling and administrative expense . . . . . . . . . . . . . . . . . . . . 420,000
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
Earnings before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Block?Hirt?Danielsen:
Foundations of Financial
Management, 13th Edition
II. Financial Analysis and
Planning
2. Review of Accounting © The McGraw?Hill
Companies, 2009
52 Part 2 Financial Analysis and Planning
www.mhhe.com/bhd13e
Statement of Retained Earnings
For the Year Ended December 31, 2008
Retained earnings, balance, January 1, 2008 . . . . . . . . . . . . . . . . . . . . $500,000
Add: Earnings available to common stockholders, 2008 . . . . . . . . . . 150,000
Deduct: Cash dividends declared and paid in 2008 . . . . . . . . . . . . . 50,000
Retained earnings, balance, December 31, 2008 . . . . . . . . . . . . . . . . . $600,000
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 2008
Earnings after taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Earnings available to common stockholders . . . . . . . . . . . . . $ 150,000
Common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.25
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250,000 $ 440,000
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 400,000
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 50,000
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 720,000 890,000
Long-term liabilities:
Bonds payable, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 120,000
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790,000 1,010,000
Comparative Balance Sheets
For 2007 and 2008
Year-End
2007
Year-End
2008
Assets
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,000 $ 100,000
Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 350,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,000 430,000
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 30,000
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830,000 910,000
Investments (long-term securities) . . . . . . . . . . . . . . . . . . . 80,000 70,000
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,400,000
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . 1,000,000 1,150,000
Net plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,250,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,910,000 $2,230,000
Stockholders’ equity:
Preferred stock, $100 per value . . . . . . . . . . . . . . . . . . . . . . 90,000 90,000
Common stock, $1 par value . . . . . . . . . . . . . . . . . . . . . . . . 120,000 120,000
Capital paid in excess of par . . . . . . . . . . . . . . . . . . . . . . . . 410,000 410,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 600,000
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . 1,120,000 1,220,000
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . $1,910,000 $2,230,000

financi4 answers:

.A good guide is the Earnings per share as that’s how the market determines profitability.

James asks…

Prepare a statement of cash flows for the Crosby Corporation?

CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 2008
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,200,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000
Gross profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,000
Selling and administrative expense . . . . . . . . . . . . . . . . . . . . 420,000
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
Earnings before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000

Additional Details
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 2008
Earnings after taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Earnings available to common stockholders . . . . . . . . . . . . . $ 150,000
Common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.25

Statement of Retained Earnings
For the Year Ended December 31, 2008
Retained earnings, balance, January 1, 2008 . . . . . . . . . . . . . . . . . . . . $500,000
Add: Earnings available to common stockholders, 2008 . . . . . . . . . . 150,000
Deduct: Cash dividends declared and paid in 2008 . . . . . . . . . . . . . 50,000
Retained earnings, balance, December 31, 2008 . . . . . . . . . . . . . . . . . $600,000

Comparative Balance Sheets
For 2007 and 2008
Year-End
2007
Year-End
2008
Assets
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,000 $ 100,000
Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 350,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,000 430,000
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 30,000
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830,000 910,000
Investments (long-term securities) . . . . . . . . . . . . . . . . . . . 80,000 70,000
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,400,000
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . 1,000,000 1,150,000
Net plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,250,000
Total assets . .

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250,000 $ 440,000
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 400,000
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 50,000
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 720,000 890,000
Long-term liabilities:
Bonds payable, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 120,000
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790,000 1,010,000

financi4 answers:

I’ve sent the file to that address you once gave me.

Donald asks…

If you truly believe that the World will end in 2012, why not just “Party Till You Drop!” in 2011?

Imagine the possibilities:
$ – “Cash In” all of your Savings accounts, CDs, Stocks & Bonds, and just Go For Broke! (They don’t accept Cash OR Plastic in Hell, not even American Express!)
$ – Buy or Lease that ultra-expensive luxury car that you had thought that you could never afford, and drive the wheels off of it!
$ – Go to Vegas, and marry a $5000-per-hour Prostitute, then take her home to meet the former wife & kids!
$ – Buy & Try all of those “Hard-Core” Controlled Substances that you have always wanted to experiment with, but lacked the Balls to do so!
$ – Become the “007 – Licensed to Kill” Secret Agent that you’ve always fantasized about being, and wreak Death & Destruction upon all of your enemies, both real and suspected! (Good News! They don’t have Prisons in Hell!)
$ – One last thing: Don’t forget to also purchase a Cyanide pill, in the event that the World DOESN’T end in 2012!

financi4 answers:

You are certainly free to do as you choose.
You’ll be pretty tired when you realize the world isn’t coming to an end, but it’s still your choice.

Chris asks…

Stock investments for 27-year-old, can you give advice for 2012?

I’ve been getting more into investing and I’m wondering about how much I should keep invested in stocks and ETFs going into 2012 since many pro investors don’t seem very optimistic. Any suggestions on overall adjustments and changes would be much appreciated!

Here’s my portfolio:
IVV: $5,040
QQQ: $4,466
WAG: $3,306 (longtime investment)
VOX: $2,487
FUI: $1,704
VEU: $1,586

$6,000 available for trading (not including cash in bank accounts)

I’m looking for more opinions about whether I should consider bonds or any other type of investment other than stocks. Thanks for the help!

financi4 answers:

I like bonds for diversification, so I would put 20% in these. Your portfolio is very niche oriented, with 60% in tek, wag, utilities & telecommunications. Generally you don’t want more than 20% in these (specialty funds). And no more than 5% in any one stock.

I would also add a mid/small cap fund.
Try not to worry too much about what 2012 will bring. Invest for the long term.

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Impact Investing: A Broad Market With Expanding Appeal

Impact Investing: A Broad Market With Expanding Appeal

The last five years have generated remarkable new interest in impact investing. New investors — including diversified financial institutions, high-net-worth family offices, and pension funds — are entering the field. New business models are being
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Washtenaw: Local Investing

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A 20-question survey by the Washtenaw County office of community and economic development (OCED) is part of an effort to help identify ”creative opportunities for growing our local economy and utilizing community capital.” Questions include “Have you
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Your Questions About Is It Smart To Invest In Gold

John asks…

Are Republicans easier to control than Democrats?

When Obama was elected, ammo manufacturers told Republicans that ammo was going to be outlawed/taxes. The Republican response was to horde so much handgun ammo that the price doubled and it was hard to find for a long time. Here we are years later and the only thing making it hard to get ammo is that the Right is hording it.

When Fox affiliates bought out all of those “invest in gold” companies, people like Beck and Limbaugh started preaching about how investing in gold is the only smart thing to do with your money. Here we are a few years later and those companies are making record profits while being investigated for ripping people off.

When violent video games and music was blamed for the Columbine shootings Republicans pushed to have them censored, saying that it corrupts the values of America. Now that the Republicans are being blamed for promoting gun violence (“Don’t retreat, reload” – “If ballots don’t work, bullets will” – etc.), Republicans are saying you can’t blame media for one person’s actions.

These could go on forever; you catch my drift.

Is it just me or are they a lot more willing to follow lock-step with their leaders than the left? Maybe the reason they are able to win elections and spread propaganda more efficiently is that it‘s easy to get them to think exactly the same. You will see the left criticize Obama, but you will NEVER see the people on Fox News criticize any Republicans. Thoughts on this?

financi4 answers:

If you’re biased an choose to only see half the spectrum, sure, it does appear that way.

Steven asks…

What is the best financial investment I could make?

With the economy the way it is right now, what is the best financial investment I could make? I heard on the radio that now is the time to invest in gold? If money wasn’t an issue what would be the smartest investment.

financi4 answers:

Invest in yourself. Get an degree or a certification that will allow you to earn more money in the future.
If you already believe that you cannot improve your earnings power I would focus on learning about investing before that I threw money at any investment.
Learn about equities(stocks), bonds, commodities and real estate. Know the benefits and the drawbacks of each of these investment vehicles. Based on what you learn, apply that knowledge to your own investment style and or beliefs.
When you make a mistake (we all do) figure out what you did wrong and try to not repeat the mistake. If you do not have the time or the interest to learn about these things (I find them fascinating) you should see a professional who has a focus on Capital Preservation.
Good luck!

James asks…

I NEED SMART BUSlNESS PEOPLES HELP????

Ok i’m 16 years old and i’m thinking about starting a business when I grow up because it SEEMS like an easy way to make money. I know thats not the case all the time and that you have a 50/50 chance of your business failing but I think if I can set everything just right maybe just maybe I can be successful and be able to live out my dreams.

Well I need to know a couple of things…

1) What type of businesses have been the most successful e.g. retaurants, jewelry stores, real estate, just to name a few.
I know any type of business can be successful with the right type propaganda and promotion and such but I need to know which ones have turned out the most success full.

I also want to know if investing in gold is a good idea. Since gold prices go up regularly it sure does seem like a good idea to invest in it.

How would you get a loan from a bank if you were to start a business? What are the requirements to get a loan?

Thanks for all your help!!!

financi4 answers:

There are sensational opportunities with an online business. Since there would be no age restrictions you could start now and be well off by the time you are 25 or so. Other young people are doing it and so can you.

Do a Google search for online business and start learning.

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To Avoid the Biggest Investing Mistake, Stay Strong

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Your Questions About Is It Smart To Invest In Gold

John asks…

What do you think?

Hook
It’s ironic how reality became irrelevant/
Gangsta’s killing juveniles for Cash Money presidents/
Justin Timberlake on Black Entertainment Television/
Legends dropping classics and not selling shit/
Fuck the world I’m still yelling it/
It’s classic like acid burn ya’ll like mescaline/
So I’ll be the teacher and take ya’ll to test again/

It’s ironic people dehydrated while drowing/
People starving with farms surrounding em/
No light at the tunnel who’s following who/
The blind leading the blind, grind for the shine/
Like cell doors opening slow, grind for Shyne/
No I’m not the godfather, I’m a young gun not dumb smarter like S. Carter/
Too many pretenders, a beef ender contriversy starter, like I walked on Washington and pissed on founding fathers/
Slave owners with whips pounding the father, of the father, of my grandfather/
More impact in fact than cain in the hood and planes in the twin towers/
I say pray, but not hail mary’s and our fathers/
Pray for the return of our fathers/
Flow ill burns souls like ether, but deeper, stronger, smarter/
MCs and gs following trends to ends like cows to a slaughter/
Fuck the first family like I raped both daughters/
I did what I did, I am what I was fuck the world/
Fuck Bush the C.E.O. whore/
Fuck all cops police will see me no more/
For real still militant till the end of my pens personal, versatile, venomous third world war/
Not World War 3 but the poor at war for C.O.D.s/
Lyrically I appear to be D.O.C. /
Few can do it hotter, sweater, excuse me better/
You can bet I beat heat like A.C., not Jay-z, simply crazy/
Rhyming for diamonds, motherfuckers dieing for diamonds, C.E.O’s thriving of diamonds/
Investors investing in molesting the black continent/
I’ll reinvent till I see blacks back in control of their continent/
Raps confident, you got a glock, I got a pen/
You end my life but the kid ill still live like a legend on the end of the pen/
Feel the prison that materialism represents/
Work ourselves sick for shit, visit doctors go broke for this medicine, PHD’s pedaling/
Sell dope for dough, that doughs for what I need but my 5-9 wont get for me, 6.55 can’t feed me/
6 45’s might defeat me, finally my mind will be as deep as my feet/
The globes my dj the world will repeat the lines I rhyme, the rhymes my grind, my grinds my shine, my shines my star I’m out of my mind/
Beat the track like a batter charge time to pay my time, a watch with no batteries, nigga go figga tha flow spitta, dope dealer, gold digger, out of time/

Hook
It’s ironic how reality became irrelevant/
Gangsta’s killing juveniles for Cash Money presidents/
Justin Timberlake on Black Entertainment Television/
Legends dropping classics and not selling shit/
Fuck the world I’m still yelling it/
It’s classic like acid burn ya’ll like mescaline/
So I’ll be the teacher and take ya’ll to test again/
It‘s some lyrics I wrote, I wanted an opinion from some people outside the Hip Hop Internet Commmunity

Justin answers:

Sort of reminds me of Alanis Morissette’s song ‘Isn’t it Ironic’…the lyrics are pretty good…but it would depend on if they were actually sung instead of that boring monotone that rap is so fond of.

Daniel asks…

I NEED SMART BUSlNESS PEOPLES HELP?

Ok i’m 16 years old and i’m thinking about starting a business when I grow up because it SEEMS like an easy way to make money. I know thats not the case all the time and that you have a 50/50 chance of your business failing but I think if I can set everything just right maybe just maybe I can be successful and be able to live out my dreams.

Well I need to know a couple of things…

1) What type of businesses have been the most successful e.g. retaurants, jewelry stores, real estate, just to name a few.
I know any type of business can be successful with the right type propaganda and promotion and such but I need to know which ones have turned out the most success full.

I also want to know if investing in gold is a good idea. Since gold prices go up regularly it sure does seem like a good idea to invest in it.

How would you get a loan from a bank if you were to start a business? What are the requirements to get a loan?

Thanks for all your help!!!

Justin answers:

A small business loan is one of the most treasured commodities in the business world. It is still very hard to get despite the claims and promises of banks, credit unions, and other lending institutions that they want to help American smallsuppliers and vendors. The main reason that the banks use for not granting many loans during this period is like the same reason that a student can’t get a job coming out of school. They don’t have the experience.

Michael asks…

I NEED SMART BUSlNESS PEOPLES HELP?????

Ok i’m 16 years old and i’m thinking about starting a business when I grow up because it SEEMS like an easy way to make money. I know thats not the case all the time and that you have a 50/50 chance of your business failing but I think if I can set everything just right maybe just maybe I can be successful and be able to live out my dreams.

Well I need to know a couple of things…

1) What type of businesses have been the most successful e.g. retaurants, jewelry stores, real estate, just to name a few.
I know any type of business can be successful with the right type propaganda and promotion and such but I need to know which ones have turned out the most success full.

I also want to know if investing in gold is a good idea. Since gold prices go up regularly it sure does seem like a good idea to invest in it.

How would you get a loan from a bank if you were to start a business? What are the requirements to get a loan?

Thanks for all your help!!!

Justin answers:

Restaurants are profitable if one has the know how and a great kitchen. Many benifits, like all persoanl groceries and meals, tax free.

Very competitive and 50/50 may be overestimating success.

Gold may be a wise investment. But don’t put 100% of a portfolio in any one thing. Watch the next election.

Chances for a bank loan are slim to none for a new business, unless you have collateral.

Good luck, and follow your dreams.

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