Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. With...

Question

Question

Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. With this omission, the

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Current Ratio per Company Statements	1.67	50/30
Current Ratio if Error Fixed	1.43	50/(30+5)
Current Ratio will be	Worse
ROI per Company Statements	11.11%	10/((100+80)/2)
ROI if Error Fixed	5.56%	5/((100+80)/2)
ROI will be	Worse
ROE per Company Statements	25.00%	10/((45+35)/2)
ROE if Error Fixed	13.33%	5/((45-5+35)/2)
ROE will be	Worse

Add a comment

Answer 2

Similar Homework Help Questions

Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. With...

Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. With this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales $50,000,000 All Cost (incl. Interest & Taxes) $40,000,000 Net Income $10,000,000 Summarized Balance Sheet This Year Last Year Assets: All Current Assets combined $50,000,000 $40,000,000 All Long-Term Assets combined $50,000,000 $40,000,000 Total Assets: $100,000,000 $80,000,000 Liabilities & Stockholders Equity All Current Liabilities combined $30,000,000 $25,000,000 All Long-Term Liabilities...
QUESTIONS 30.00007 points Save Answer The MBA802 Company failed to record (accrue) $9,000,000 of cost related...

QUESTIONS 30.00007 points Save Answer The MBA802 Company failed to record (accrue) $9,000,000 of cost related to vendor invoices and warranty liability at year-end. With this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales $97,000,000 All Cost (incl. Interest & Taxes) $83.000.000 Net Income $14,000,000 Summarized Balance Sheet This Year Last Year Assets: All Current Assets combined $74,000,000 $68,000,000 All Long-Term Assets combined $61,000,000 $59.000.000 Total Assets: $135,000,000 $127,000,000 Liabilities & Stockholders Equity All...
Pinnacle Plus declared and paid a cash dividend of $9,100 in the current year. Its comparative...

Pinnacle Plus declared and paid a cash dividend of $9,100 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year Income Statement Sales Revenue $ 235,000 $ 199,000 Cost of Goods Sold 102,000 98,000 Gross Profit 133,000 101,000 Operating Expenses 61,000 53,000 Interest Expense 6,500 6,500 Income before Income Tax Expense 65,500 41,500 Income Tax Expense (30%) 19,650 12,450 Net Income $ 45,850 $ 29,050 Balance Sheet Cash $...

Pinnacle Plus declared and paid a cash dividend of $8,100 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information:

Pinnacle Plus declared and paid a cash dividend of $8,100 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current YearPrevious YearIncome StatementSales Revenue$185,000$159,000Cost of Goods Sold82,00078,000Gross Profit103,00081,000Operating Expenses51,00045,000Interest Expense5,5005,500Income before Income Tax Expense46,50030,500Income Tax Expense (30%)13,9509,150Net Income$32,550$21,350Balance SheetCash$89,075$23,000Accounts Receivable, Net32,00027,000Inventory40,00053,000Property and Equipment, Net110,000120,000Total Assets$271,075$223,000Accounts Payable$57,000$33,500Income Tax Payable1,3751,250Note Payable (long-term)55,00055,000Total Liabilities113,37589,750Common Stock (par $10)99,00099,000Retained Earnings58,70034,250Total Liabilities and Stockholders’ Equity$271,075$223,000 Required:1. Compute the gross profit percentage in the current and previous years. Are the current year...
The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data:...

The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data: Current Year Previous Year Income Statement Sales Revenue Cost of Goods Sold $125,000 58,000 $111,000 54,000 Gross Profit Operating Expenses Interest Expense 67,000 39,000 4,300 57,000 35,400 4.300 Income before Income Tax Expense Income Tax Expense (30%) 23,700 7,110 17,300 5,190 Net Income $ 16,590 $ 12,110 Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net $ 73,415 20,000 28,000 98,000 $...
Balance Sheet December 31s (Millions of dollars) Scramouche Opera N&B Equipment Scramouche Opera Company Company Company...

Balance Sheet December 31s (Millions of dollars) Scramouche Opera N&B Equipment Scramouche Opera Company Company Company Liabilities Current liabilities N&B Equipment Company Assets Current assets Cash $861 $553 Accounts $0 payable Accounts 315 203 Accruals 190 receivable Inventories 1,012 924 $2,100 594 $1,350 1,075 $1,265 Total current $1,012 assets Notes payable Total current liabilities Long-term bonds Total debt Net fixed assets 1,547 $2,812 1,238 $2,250 Net plant and 1,650 1,650 equipment Common equity Common stock $610 328 $488 262 Retained...

Pinnacle Plus declared and paid a cash dividend of $7,800 in the current year. Its comparative...

Pinnacle Plus declared and paid a cash dividend of $7,800 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year $170,000 76,000 94,000 48,000 5,200 40,800 12,240 $ 28,560 $147,000 72,000 75,000 42,600 5, 200 27,200 8,160 $ 19,040 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income Balance Sheet Cash Accounts Receivable,...
The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data:...

The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data: Current Previous Income Statement Sales revenue Cost of goods sold $280,000 150,000 $245,000 140,000 Gross profit Operating expenses Interest expense 130,000 73,300 4,700 105,000 66,400 4,600 Income before income taxes Income tax expense 52,000 15,600 34.000 5,000 Net income $ 36,400 $ 29,000 $ Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) 8,100 39,000 60,000 65,000 $ 10,000 33,000 55,000 58,000...
The most recent data from the annual balance sheets of N&B Equipment Company and Jing Foodstuffs...

The most recent data from the annual balance sheets of N&B Equipment Company and Jing Foodstuffs Inc. are as follows: Balance Sheet December 31st (Millions of dollars) Jing Foodstuffs N&B Equipment Jing Foodstuffs Inc. Company Inc. Liabilities N&B Equipment Company Assets Current assets Current liabilities Cash $574 $369 Accounts payable $0 $0 Accounts 210 135 Accruals 127 0 receivable Inventories 616 396 717 675 Total current 1,400 900 Notes payable Total current liabilities 844 675 assets 1,031 825 Net fixed...

Crane Supply Company’s financial statements for the most recent fiscal year are shown below. The company...

Crane Supply Company’s financial statements for the most recent fiscal year are shown below. The company management projects that sales will increase by 14 percent next year. Assume that all costs and assets increase directly with sales. The company has a constant 40 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long-term debt. Using the forecasted income and dividend information for Crane Supply, find the internal...

Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. With...

Homework Answers