Answer:
Explanation:
Horizontal analysis of financial statements is a system of comparing each item of financial statement in a previous year to the current year with each line item analysis expressed in a horizontal pattern for clear comparison.
The change in growth is calculated by deducting the previous year's value of an item of the financial statement from the current year while the percentage growth is calculated by calculating the growth value as a percentage of the previous year value
2022 2021 Change % Change
Net sales 639,400 578,200 61,200 10.6%
Cost of goods 464,800 433400 31,400 7.3%
Gross profit 174,600 144,800 29,800 20.6%
Operating exp. 70,500 43,000 27,500 70%
Net Income 104,100 101,800 2,300 2.26%
For the year ended December 31, 2016, Norstar Industries reported net income of $655,000. At January 1, 2016, the company had 900,000 common shares outstanding. The following changes in the number of shares occurred during 2016: Apr. 30 Sold 60,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 72,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for the year ended December 31, 2016.
Answer:
1.272 per share
Explanation:
The computation of earnings per share is shown below:-
Weighted Average number of Common shares outstanding = outstanding common shares ÷ Net income
= 900,000 ÷ $707,810
= 1.272 per share
Where,
Net Income = Preferred Dividends ÷ Weighted Average number of Common shares outstanding
= $655,000 ÷ (1 + 0.05) + ( 60,000 × 8 months ÷ 12 months) × 1.05 + (72,000 × 7 months ÷ 12 months)
= $623,810 + 40,000 × 1.05 + 42,000
= $623,810 + 42,000 + 42,000
= 707,810
As of December 31, 2019, Sheridan Company had $3500 of raw materials inventory. At the beginning of 2019, there was $3000 of materials on hand. During the year, the company purchased $315000 of materials; however, it paid for only $252500. How much inventory was requisitioned for use on jobs during 2019
Answer: $314,500
Explanation:
When calculating how much of a material of any sort was used, the following formula should be used,
= Beginning inventory + Purchases - Ending inventory
This is the same formula largely used to calculate Cost of Goods sold.
Here, the figure to be concerned about is the actual materials used not the ones paid for.
Plugging in figures into the formula then,
= 3,000 + 315,000 - 3,500
= $314,500
Thus $314,500 was the inventory requisitioned for use on jobs during 2019.
Allegheny Company ended Year 1 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $68,000 and $3,450, respectively. During Year 2, Allegheny wrote off $6,300 of Uncollectible Accounts. Using the percent of receivables method, Allegheny estimates that the ending Allowance for Doubtful Accounts balance should be $5,400. What amount will Allegheny report as Uncollectible Accounts Expense on its Year 2 income statement
Answer:
$8,250
Explanation:
Relevant data provided for compute the Uncollectible Accounts Expense is here below:-
Amount written off = $6,300
Closing balance = $5,400
Opening balance = $3,450
The computation of Uncollectible Accounts Expense is shown below:-
Uncollectible Accounts Expense = Amount written off + Closing balance - Opening balance
= $6,300 + $5,400 - $3,450
= $11,700 - $3,450
= $8,250
Therefore for computing the Uncollectible Accounts Expense we simply applied the above formula.
Evaluate the statement “Accounting is all about numbers.". Using the definition of accounting to justify your answer.
Explanation:
Accounting is not all about numbers. For accounting is characterized as the entire process of recording financial transactions of an organization.
Some of the accounting activities are the summary and analysis of accounting information to economic entities, as well as communicating non-financial information such as those that can impact people and the environment.
Check all true statements regarding CMBS:
a.CMBS have less exposure to prepayment risk than RMBS
b.Loans in a CMBS deal are recourse loans The multifamily/apartment CRE sector never uses CMBS for financing as it relies on RMBS
c.CMBS are the main source of financing for commercial real estate loans
d.The number of commercial mortgages in a CMBS deal are usually lower than the number of residential mortgage in a RMBS deal
Answer: A and D only
Explanation:
CMBS Loan are also referred to as a Conduit Loan, this is a type of real estate loan usually commercial, which is secured by a first-position mortgage on a commercial property. These loans are usually packaged, and sold by a Conduit Lender, commercial banks, investment banks, and syndicates of banks.
Loans in a CMBS are always bigger so they are less in a CMBS deal. Sometimes it’s onlyone loan in a Single Asset (SA) CMBS deal
Prepayments are discouraged in CMBS through defeasance,prepayment penalties or yield maintenance fees.
Answer:
a.CMBS have less exposure to prepayment risk than RMBS
d. The number of commercial mortgages in a CMBS deal are usually lower than the number of residential mortgage in a RMBS deal
Explanation:
Commercial Mortgage-Backed Securities (CMBS) as the name implies are mortgage backed securities that are secured with commercial mortgages while Residential Mortgage-Backed Securities (RMBS) are mortgage backed securities secured by residential property.
a) CMBS are based on mortgages which usually have a fixed term contract in place meaning that prepayment is less of a thing with CMBS than with RMBS so the former does indeed have a less exposure to prepayment risk than the latter.
d) This is indeed true because both packages have to look appealing to investors but can only use different amounts to reach the minimum threshold. This is because Commercial Mortgages pay more than Residential Mortgages so more RMBS have to be pulled together to form an attractive investment as opposed to CMBS. This is why the number in CMBS are usually less than that of RMBS.
ImpressMe Products embosses notebooks with school and corporate logos. Last year, the company’s direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour. Calculate ImpressMe’s direct labor rate variance. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
Answer:
Direct labor rate variance= $12,575 unfavorable
Explanation:
Giving the following information:
Last year, the company’s direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour.
To calculate the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 352,100/50,300= $7 per hour
Direct labor rate variance= (6.75 - 7)*50,300
Direct labor rate variance= $12,575 unfavorable
A division is considering the acquisition of a new asset that will cost $2,950,000 and have a cash flow of $740,000 per year for each of the four years of its life. Depreciation is computed on a straight-line basis with no salvage value. Ignore taxes. Required: a. & b. What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation? What is the residual income each year if the cost of capital is 8 percent?
Answer and Explanation:
The computation of ROI for each year of the asset's life and residual income each year is shown below:-
Year Investment base ROI Residual income
1 $2,950,000 8% -$233,500
2 $2,212,500 11% -$233,500
3 $1,475,000 17% -$115,500
4 $737,500 34% -$56,500
ROI = Net income ÷ Total investment × 100
Net Income = Cash flow - Depreciation
Residual income = Net income - (Investment × Cost of capital)
Depreciation = Investment base ÷ 4 years
The return on investment and the residual income can be find out by using the excel spreadsheet. Kindly find it in the attachment
A bakery buys sugar from a big distributor to use in baking cakes. Typically, they use 3663 bags of sugar in a year. The price of sugar is typically $14 per bag. The cost to the bakery for placing an order is $26, and the annual carrying cost is $17 per bag. The distributor has offered the bakery the following volume discount schedule: Order Size Discount rate on the original price 1--449 0 percent 450--799 5 percent more than 800 10 percent We are trying to find how many bags of sugar should the store order, whenever they place a new order of sugar.Assume 364 days a year and 52 weeks a year. IMPORTANT: Note, the discounts off of original price are reported. You need to calculate the actual prices. Keep two decimal places in your calculations.If we ignore the discounts, how many bags of sugar should we order
Suppose that the standard deviation of monthly changes in the price of commodity A is $2. The standard deviation of monthly changes in a futures price for a contract on commodity B (which is similar to commodity A) is $3. The correlation between the futures price and the commodity price is 0.9. What hedge ratio should be used when hedging a one month exposure to the price of commodity A
Answer:
0.6
Explanation:
Correlation r = 0.9,
Standard deviation of monthly change in price of commodity A, σA = 2,
Standard deviation of monthly change in price of commodity B, σB = 3
The hedge ratio will be calculated using the formula
Hedge ratio=r×σA÷σB
Hedge ratio=0.9×2÷3
Hedge ratio = 0.6
Therefore, the hedge ratio used when hedging a one month exposure to the price of commodity A is 0.6.
Hardware is adding a new product line that will require an investment of $ 1 comma 476 comma 000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $ 300 comma 000 the first year, $ 290 comma 000 the second year, and $ 240 comma 000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places
Answer:
42,51%
Explanation:
Accounting Rate of Return (ARR) = Average Profits / Average Investment
Calculation of Average Profits
Average Profit = Sum of Profits / Number of Years
= (300,000+290,000+240,000×8)/10
= $2,510,000 / 8
= $313,750
Calculation of Average Investment
Average Investment = Initial Investment + Scrape Value / 2
= $1,476,000/2
= $738,000
Accounting Rate of Return (ARR) = $313,750/$738,000×100
= 42,51%
Frederick Company has two service departments (Cafeteria Services & Maintenance). Frederick has two production departments (Assembly Department & Packaging Department.) Frederick uses a step allocation method where Cafeteria Services is allocated to all departments and Maintenance Services is allocated to the production departments. All allocations are based on total employees. Cafeteria Services has costs of $255,000 and Maintenance has costs of $175,000 before any allocations. What amount of Maintenance total cost is allocated to the Packaging Department? (round to closest whole dollar) Employees are: Cafeteria Services 4 Maintenance 5 Assembly Department 10 Packaging Department 10
Answer:
The Total allocation of maintenance cost of packaging department is $87,500
Explanation:
According to the given data we have the following:
The Total Maintenance cost is $175,000 before allocation.
Total employees of in Production Department is= 10 Assembly + 10 Packaging= 20
Hence, Total maintenance cost per employee = $175,000 / 20
Total maintenance cost per employee =$8,750
Therefore, the Total allocation of maintenance cost of packaging department= Total maintenance cost per employee× Employees Packaging Department
Total allocation of maintenance cost of packaging department=$ 8,750 X 10 employees= $87,500
Suppose the interest rate is 4.3 %. a. Having $ 400 today is equivalent to having what amount in one year? b. Having $ 400 in one year is equivalent to having what amount today? c. Which would you prefer, $ 400 today or $ 400 in one year? Does your answer depend on when you need the money? Why or why not? a. Having $ 400 today is equivalent to having what amount in one year?
Answer: a. $417.2. b. $383.51. c. $400 today.
Explanation:
a. Present value = $400
Interest rate = 4.3%
Future value= PV(1+r)^n
= 400(1+0.043)^1
= 400(1.043)
= $417.2
b. FV = $400
PV = Unknown
Interest = 4.3%
Future value= PV(1+r)^n
400 = PV(1+0.043)^1
400 = PV(1.043)
PV = 400/1.043
PV = $383.51
c. I'll prefer $400 today.
My answer does not depend on me needing money presently, I can actually invest the $400 today and get more value when it's a year. I'll have made more than $400.
Fultz Company has accumulated the following budget data for the year 2020.
1. Sales: 31,410 units, unit selling price $85.
2. Cost of one unit of finished goods: direct materials 1 pound at $6 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $7 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,120 pounds; ending, 15,480 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Prepare a schedule showing the computation of cost of goods sold for 2020.
Answer:
COST OF Goods SOLD $ 1,1539,110
Explanation:
Fultz Company
Schedule of Cost of Goods Sold for 2020
As there are no beginning and ending finished goods inventories the total units produced are sold. (Finished Goods required 31410 Units)
Inventories raw materials : beginning, 10,120 pounds
Add Direct Materials Purchases 36770 pounds
Less Inventories ending raw materials , 15,480 pounds
Direct Materials Used 31410 pounds
Materials 1 pound at $6 per pound= $ 6* 31410 Units= $ 188460
Direct labor 3 hours at $12 per hour= $ 36* 31410 Units= $ 1130780
Manufacturing Overhead $7 per direct labor hour= $ 7* 31410 Units=
$ 219870
Total Manufacturing Costs $ 1,1539,110
There are no beginning and ending work in process inventories so the total manufacturing cost gives us the COST OF Goods SOLD.
The classical dichotomy and the neutrality of money
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.
Maria spends all of her money on paperback novels and beignets. In 2011 she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a beignet was $3.00.
Which of the following give the nominal value of a variable?
1-The price of a beignet is $3.00 in 2011.
2-Maria's wage is $27.00 per hour in 2011.
3-The price of a beignet is 0.33 paperback novels in 2011.
Which of the following give the real value of a variable?
1-The price of a paperback novel is 3 beignets in 2011.
2-Maria's wage is 9 beignets per hour in 2011.
3-The price of a paperback novel is $9.00 in 2011.
Suppose that the Fed sharply increases the money supply between 2011 and 2016. In 2016, Maria's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a beignet is $6.00.
In 2016, the relative price of a paperback novel is _________
Between 2011 and 2016, the nominal value of Maria's wage (increases/decreases/remains the same) and the real value of her wage ____________
Monetary neutrality is the proposition that a change in the money supply ________ nominal variables and ______ real variables.
Answer:
1. Relative price = $3
2. Increases
3. affects , not affect
Explanation:
As per the data given in the question,
1) The relative price of a paperback novel in 2016 = Maria,s wage ÷ Price of a paperback novel
= $54÷$18
= $3
2) Between 2011 and 2016, the nominal value increases and the real value of Maria's wage remains the same.
3)Monetary neutrality is proposition that the change in the money supply affects the nominal variables but it does not affect the real variables.
A bidding firm, A, is worth $27,000 as a stand-alone entity. A target firm, B, is worth $12,000 as a stand-alone entity, but $18,000 if it is acquired and integrated with Firm A. Several other firms are interested in acquiring Firm B, and Firm B is also worth $18,000 if it is acquired by these other firms. If A acquired B, would this acquisition create value? If yes, how much? How much of this value would the equity holders of A receive? How much would the equity holders of B receive?
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Firm A’s worth as a stand-alone entity = $27,000
Firm B’s worth as a stand-alone entity = $12,000
But if Firm A acquired Firm B it’s increase worth of Firm B at $18000.
Firm A is acquired Firm B, this acquisition create value of
= $18,000 - $12000
= $6000.
With this acquisition equity holders of Firms received $18,000 which is $6,000 more than Firm B stand alone.
Selected comparative financial statements of Korbin Company follow.
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017 2016 2015
Sales $ 555,000 $ 340,000 $ 278,000
Cost of goods sold 283,500 212,500 153,900
Gross profit 271,500 127,500 124,100
Selling expenses 102,900 46,920 50,800
Administrative expenses 50,668 29,920 22,800
Total expenses 153,568 76,840 73,600
Income before taxes 117,932 50,660 50,500
Income taxes 40,800 10,370 15,670
Net income $ 77,132 $ 40,290 $ 34,830
Required:
a. Calculate the income statement data in common-size percents.
Answer and Explanation:
The computation is shown below:
Particulars 2015 % 2014 % 2013 %
Sales $555,000 100 $340,000 100 $278,000 100 Less
COGS $283,500 51.08 $212,500 62.5 $153,900 55.36 Gross profit $271,500 $48.92 $127,500 37.5 $124,100 44.64 Less:
Selling expenses $102,900 18.54 $46,920 13.8 $50,800 18.27 Administrative expenses $50,668 9.13 $29,920 8.8 $228,00 8.20
total expenses $153,568 27.67 $76,480 22.49 $736,00 26.47 Income before tax $117,932 21.25 $50,660 14.9 $50,500 18.16 Income taxes $40,800 7.35 $10,370 3.05 $15,670 5.64
Net income $77,132 13.90 $40,290 11.85 $34,830 12.53
For cost of goods sold percentage we simply divide the cost of goods sold by the sales and the same is applied for other items
Refer to the following selected financial information from McCormick, LLC. Compute the company's days' sales in inventory for Year 2. (Use 365 days a year.) Year 2 Year 1 Cash $ 38,900 $ 33,650 Short-term investments 104,000 67,000 Accounts receivable, net 92,500 86,500 Merchandise inventory 128,000 132,000 Prepaid expenses 13,500 11,100 Plant assets 395,000 345,000 Accounts payable 106,400 114,800 Net sales 718,000 683,000 Cost of goods sold 397,000 382,000
Answer:
47.0 days
Explanation:
As per the given question the solution of company's days' sales in inventory is provided below:-
Company's days sales uncollected for year 2 = Total number of days in a year × Accounts receivables ÷ Net sales
= 365 × $92,500 ÷ $718,000
= 365 × 0.1289
= 47.0 days
So, we have calculated the Company's days sales uncollected for year 2 by putting the values into the formula.
On January 1, 2021, Legion Company sold $250,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $163,976, priced to yield 12%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.)
Answer:
The bond interest expense to be shown in profit or loss as t 30 June 2021
$9,838.56
Explanation:
The bond interest expense is the actual finance cost of using the funds made available by bondholders while the coupon payment is the portion of the finance cost paid to them periodically.
Interest expense=bonds cash proceeds*yield to maturity*6/12
bonds cash proceeds is $163,976
yield to maturity is 12%
interest expense=$163,976*12%*6/12=$9,838.56
Answer:
$9,838.56
Explanation:
Interest Expense using effective interest rate method can determined by multiplying the carrying value of the bond and yield rate of the bond because the bonds issued on the discount has different interest expense than the interest payment made to bond holder.
As the interest is paid semiannually the interest expense will be calculated for only 6 months.
Interest expense=Cash proceeds on issuance of bond x YTM x 6/12
As per given data
Cash proceeds are $163,976
YTM is 12%
Interest expense=$163,976 x 12% x 6/12=$9,838.56
A company sells goods to a customer who will pay the full amount in 30 days.How should the company record the sale
Answer:
Credit sales
Debit receivables
Explanation:
This is a sales on account transaction which affect the sales and receivables account.
When this transaction occurs , the company has definitely made a sale which will lead to an inflow of cash in 30 days time, even though the income is recognized immediately according to the accrual method of accounting
To record this , the sales account is credited with the value of the goods sold and the account receivable is debited for with the same amount.
The receivable is a record of payment being owed to the company by its customers.
Which law is referred to as the credit cardholders Bill Of Rights ?
Answer: credit CARD act
Hope this helps!!!
A) Fair and Accurate Credit Transaction Act
Why do more than half of enterprise application projects exceed budgets, deliver less than expected benefits, or experience overruns?
Answer: The answer is provided below
Explanation:
1. Underfinancing: One main reason that cause budget overrun and less than expected benefits is underfinancing. Allocation of an adequate amount of budget to project at the beginning will lead to a budget overrun or failure.
2. Unfeasible Cost Estimates: Estimation of cost is a vital process in a project and another common reason for budget overrun. When the cost is calculated by inexperienced or unqualified personnel, the project is going to face budget overruns.
3. Underestimating the Project Complexity: Big projects are usually at the risk of overrunning its budget as a result of bigger complications that may arise during its execution.
4. Lack of Resource Planning: When one fails to plan the resources that are available effectively, then this would lead to a budget overrun and less benefits. A common mistakes that cause overrun is failure to estimate the resources which would be utilized during the project.
How long do foodbourne illnesses last
Answer:
5-7 days
Explanation:
Immune-comprised individuals may experience a more serious illness. Severe diarrhea (often bloody diarrhea), abdominal cramps, and vomiting. Usually little or no fever. Can begin 2 to 8 days, but usually 3-4 days after consumption of contaminated food or water and last about 5 to 7 days depending on severity.
Answer:
about a week
Explanation:
Can begin 2 to 8 days, but usually 3-4 days after consumption of contaminated food or water and last about 5 to 7 days depending on severity.
If a firm has retained earnings of $2.7 million, a common shares account of $4.7 million, and additional paid-in capital of $9.4 million, how would these accounts change in response to a 10 percent stock dividend? Assume market value of equity is equal to book value of equity.
Answer:
Change in retained earnings = $1.02 million (Decrease)
Change in common shares account = $5.17 million (Increase)
Change in additional paid-in capital = $10.61 million (Increase)
Explanation:
Given:
Retained earnings = $2.7 million
Common shares account = $4.7 million
Additional paid-in capital = $9.4 million
Stock dividend = 10%
Find:
Changes in account.
Computation:
1. Change in retained earnings
Change in retained earnings = Retained earnings - (Retained earnings - Common shares account - Additional paid-in capital)Stock dividend
Change in retained earnings = $2.7 million - ($2.7 million - $4.7 million - $9.4 million)10%
Change in retained earnings = $2.7 million - 1.68 million
Change in retained earnings = $1.02 million (Decrease)
2. Change in common shares account
Change in common shares account = Common shares account (1+Stock dividend)
Change in common shares account = $4.7 million (1+10%)
Change in common shares account = $5.17 million (Increase)
3. Change in additional paid-in capital
Change in additional paid-in capital = Additional paid-in capital + (Additional paid-in capital + Retained earnings)Stock dividend
Change in additional paid-in capital = $9.4 million + ($9.4 million + $2.7 million)10%
Change in additional paid-in capital = $9.4 million + 1.21 million
Change in additional paid-in capital = $10.61 million (Increase)
Four employees received feedback from their managers. Jose was told what he did wrong and was given a warning. Jolette was told that she has been too shy in team meetings and is not speaking enough. Richard was told that his unique skill of analysis has been very valuable to the team. Gloria was told about some errors she made on the reports the team produced. Who will most likely feel highly engaged and be more productive?
Answer:
Richard
Explanation:
In simple words, Among all the employees in the organisation only Richard got the appreciation for the work he is performing. Such appreciation would work as an incentive for Richard to perform his duty with more effectiveness in the future.
Positive comments from the employer always works as a motivation to the employees and results in positive reinforcement of such employee which further results in better results.
Exercise 4-20 (Algo) Statement of cash flows; indirect method [LO4-8] Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises. TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales revenue $ 15,500 Operating expenses: Cost of goods sold $ 5,100 Depreciation expense 410 Insurance expense 950 General and administrative expense 3,500 Total operating expenses 9,960 Income before income taxes 5,540 Income tax expense (2,216 ) Net income $ 3,324 Balance Sheet Information ($ in thousands) Dec. 31,2021 Dec. 31, 2020 Assets: Cash $ 640 $ 370 Accounts receivable 835 1,000 Inventory 825 770 Prepaid insurance 140 40 Equipment 3,300 2,650 Less: Accumulated depreciation (1,180 ) (770 ) Total assets $ 4,560 $ 4,060 Liabilities and Shareholders' Equity: Accounts payable $ 385 $ 530 Accrued liabilities (for general & administrative expense) 385 570 Income taxes payable 365 320 Notes payable (due 12/31/2022) 1,100 800 Common stock 1,120 970 Retained earnings 1,205 870 Total liabilities and shareholders' equity $ 4,560 $ 4,060 Required: Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
Answer and Explanation:
The preparation of the cash flow statement is presented below:
TIGER ENTERPRISES
Cash flow statement
Cash flow from operating activities
Net income $3,324
Adjustment made
Add: Depreciation expenses $410
Add: Decrease in account receivable $165 ($835 - $1,000)
Less: Increase in inventory -$55($825 - $770)
Less: Increase in prepaid insurance -$100 ($140 - $40)
Less: Decrease in account payable -$145 ($385 - $530)
Less: Decrease in accrued liabilities -$185 ($385 - $570)
Add: Increase in income taxes payable $45 ($365 - $320)
Net cash provided by operating activities $3,459
Cash flow from investing activities
Purchase of equipment -$650 ($3,300 - $2,650)
Net cash used by investing activities -$650
Cash flow from financing activities
Issuance of the note payable $300 ($1,100 - $800)
Issuance of the common stock $150 ($1,120 - $970)
Dividend paid -$2,989 ($870 + $3,324 - $1,205)
Net cash used by financing activities -$2,539
Increase in cash $270
Add: Beginning cash balance $370
Ending cash balance $670
The items which shown in a positive sign reflects the cash inflow and the items which shown in a negative sign reflects the cash outflow ,
Stone Company changed its method of pricing inventories from FIFO to LIFO. What type of accounting change does this represent? A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be restated.
Answer:
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
Explanation:
Since the accounting method is being changed from FIFO to LIFO, any adjusting of prior year balances would be impractical. If the change is from LIFO to FIFO, then it makes more sense to adjust prior year balances. By impractical, it means that any changes would be too difficult and expensive to determine, and the value of the change is insignificant (materiality principle).
Generally US GAAP rules require that changes from FIFO to LIFO be disclosed in the footnotes only.
Select a publicly traded firm of your choice that enjoys a large shareholder base. What challenges may this firm have encountered (or is likely to encounter) in terms of (a) incorporating ethics into financial management practices, and (b) maintaining/sustaining ethical practices in the face of internal or external (market) pressures? Frame your response relative to the financial manager's fiduciary duty to maximize shareholder's wealth.
Answer: The answer is provided below
Explanation:
The publicly traded firm of my choice is Amazon.
a. Amazon would in its initial phase have encountered challenges as a result of the inculcating of financial management practises. At the beginning, the founders and the employees may not be willing to disclose all the profits on their books of accounts.
Also, the use of debt might not be taken as a healthy sign at the beginning. The preparation of statement of position might not be taken seriously and the internal control mechanisms will have been challenging to put up and also keep accountability.
b. It would have been really difficult for managers to sustain best practises during pressures. Also, stakeholders due to their personal goals might not allow finance manager to independently work. The pressure to exhibit certain level of sales or profit may also be there.
Furthermore, the lagging or leading of expenses might be done to show
lesser or higher profit. A materially price sensitive information might not be disclosed or reported. Finally, the extent of any loss might also not be reported as a result of internal pressures.
All of the following are correct statements about transfers between divisions located in countries with different tax rates except that
A. differences in tax rates across countries complicate the determination of the appro-priate transfer price
B. a decreasing number of transfers are between divisions located in different countries
C. companies must pay income tax in the country where income is generated
D. many companies prefer to report more income in countries with low tax rates.
All of the following are correct statements about transfers between divisions located in countries with different tax rates except that the companies must pay income tax in the country where income is generated. Thus option (C) is correct.
What is tax?Taxes are mandatory contributions levied on individuals or corporations by a government entity—whether local, regional, or national.
Tax revenues finance government activities, including public works and services such as roads and schools, or programs such as Social Security and Medicare.
In economics, taxes fall on whoever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’s goods.
From an accounting perspective, there are various taxes to consider, including payroll taxes, federal and state income taxes, and sales taxes.
Learn more about tax here:
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The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2014, $147,000; 2015, $185,000. Early in 2016, the following errors were discovered.
1. Depreciation of equipment for 2014 was overstated $17,000.
2. Depreciation of equipment for 2015 was understated $38,500.
3. December 31, 2014, inventory was understated $50,000.
4. December 31, 2015, inventory was overstated $16,200.
Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)
Answer:
Debit 2016 Beginning retained earning for $37,700;
Credit Accumulated depreciation for $21,500, and
Credit Inventory for $16,200.
Explanation:
The entries will affect the 2016 beginning Retained earning except for the December 31, 2014 inventory which was understated by $50,000 which was a self correcting error at the end of 2015.
Accumulated depreciation = Understatement of 2015 depreciation - Overstatement of 2014 depreciation = $38,500 - 17,000 = $21,500
The entries will affect the 2016 beginning retained earning as follows:
Details Dr ($) Cr ($)
Beginning retained earning 37,700
Accumulated depreciation 21,500
Inventory - 2015 Overstatement 16,200
To correct the error discovered in the accounts. .
Grape Inc. uses the percentage of credit sales method of estimating doubtful accounts. The Allowance for Doubtful Accounts has an unadjusted credit balance of $3,500 and the company had $180,000 of net credit sales during the period. Grape has experienced bad debt losses of 4% of credit sales in prior periods. After making the adjusting entry for estimated bad debts, what is the ending balance in the Allowance for Doubtful Accounts accou
Answer:
$9,700
Explanation:
The calculation of ending balance in the Allowance for Doubtful Accounts account is shown below:-
Ending balance in the Allowance for Doubtful Accounts account = Net credit sales × Credit sales percentage + Credit balance
= $180,000 × 4% + $2,500
= $7,200 + $2,500
= $9,700
So, for computing the ending balance in the Allowance for Doubtful Accounts account we simply applied the above formula.
