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    Kenmare Architects LTD Kal Was Incorporated and Commenced Operations On

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    Miroslav Gegoski
    Kenmare Architects Ltd (KAL) was incorporated on January 1, 2014 by Sheila Kenmare as the sole employee. In 2015, KAL sold 1,000 additional common shares to Sheila's mother. KAL also received financing from Sheila's Uncle Harry in the form of a loan in 2014, where only interest was due that year. In 2015, both interest and partial principal was due on the loan, and Sheila paid off more than what was required.

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    Kenmare Architects LTD Kal Was Incorporated and Commenced Operations On

    Uploaded by

    Miroslav Gegoski
    375 views1 page
    Kenmare Architects Ltd (KAL) was incorporated on January 1, 2014 by Sheila Kenmare as the sole employee. In 2015, KAL sold 1,000 additional common shares to Sheila's mother. KAL also received financing from Sheila's Uncle Harry in the form of a loan in 2014, where only interest was due that year. In 2015, both interest and partial principal was due on the loan, and Sheila paid off more than what was required.

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    Kenmare Architects Ltd Kal Was Incorporated and Commenced Operations On

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    Kenmare Architects Ltd Kal Was Incorporated and Commenced Operations On

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    Kenmare Architects Ltd (KAL) was incorporated on January 1, 2014 by Sheila Kenmare as the sole employee. In 2015, KAL sold 1,000 additional common shares to Sheila's mother. KAL also received financing from Sheila's Uncle Harry in the form of a loan in 2014, where only interest was due that year. In 2015, both interest and partial principal was due on the loan, and Sheila paid off more than what was required.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    375 views1 page

    Kenmare Architects LTD Kal Was Incorporated and Commenced Operations On

    Uploaded by

    Miroslav Gegoski
    Kenmare Architects Ltd (KAL) was incorporated on January 1, 2014 by Sheila Kenmare as the sole employee. In 2015, KAL sold 1,000 additional common shares to Sheila's mother. KAL also received financing from Sheila's Uncle Harry in the form of a loan in 2014, where only interest was due that year. In 2015, both interest and partial principal was due on the loan, and Sheila paid off more than what was required.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Kenmare Architects Ltd KAL was incorporated and

    commenced operations on #8478


    Kenmare Architects Ltd. (KAL) was incorporated and commenced operations on January 1,
    2014. Sheila Kenmare, the company's only employee, consults with various clients and uses
    expensive equipment to complete her work.When the company was formed, Sheila bought
    10,000 common shares but at the beginning of 2015, another 1,000 common shares were sold
    to Sheila's mother.In addition to selling shares, KAL received financing from Sheila's Uncle
    Harry in the form of a loan that was taken out on January 1, 2014. Her uncle required the
    company to pay only the interest on the loan and no principal in 2014, which KAL did. However,
    he wanted both interest and a portion of the principal to be paid during 2015. These payments
    were made evenly throughout 2015. Harry was surprised when Sheila paid down more of the
    loan balance in 2015 than he asked her to.The following shows the financial statements of the
    company for the past two years:Instructions(a) When the company was formed, how much did
    Sheila pay for her shares? How much did her mother pay for her shares?(b) At the end of 2014,
    what portion of the loan did Uncle Harry want paid off in 2015? How much of the loan was
    actually paid off in 2015? What was the total amount of cash received by Harry in 2014 and
    2015?(c) Calculate the current ratio for each year. Has the company's liquidity improved?(d)
    Calculate the debt to total assets ratio for each year. Did the company's solvency improve?
    What effect did the change in this ratio have on the income statement?(e) Calculate the
    earnings per share of the company for each year. Why do you think that the earnings per share
    changed in 2015?(f) Assume that the price Sheila paid for her shares was the share price
    throughout 2014. Using that price, determine the value of the price-earnings ratio for that year.
    Assume that the price Sheila's mother paid for her shares was the share price throughout 2015.
    Using that price, determine the price-earnings ratio for 2015. Why do you think the value of this
    ratio changed? Do you think that the share price change was justified?(g) What was the major
    reason for the company to sell shares in 2015?View Solution:
    Kenmare Architects Ltd KAL was incorporated and commenced operations on

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