Homework Answers
a.Normal accounts payable should be squared up either during the discount period, if offered or else by 30 days. This is general better practise followed by companies.
b. The highest debt leverage ratio is 2:1. Anything higher than this ratio signifies threat to the solvency capacity of the company.
c. The ideal dividend payout ratio should be around 35-55 percent. anything below this will make company have lesser retained earnings which is unhealthy.
d. The inventory turnover ratio depends upon the type of business and the type of inventory. However, the general inventory turnover ratio is somewhere around 4 - 6 times.
e. The collection period depends upon the industry of the company. however, companies generally allow 30 days towards credit period.
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4. What factors should a company consider in deciding the following? a. What its accounts payable...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
Net income 8,000 The following information pertains to Carolina Company: $ 65,000 Increase in accounts payable...
Net income 8,000 The following information pertains to Carolina Company: $ 65,000 Increase in accounts payable .... $ Depreciation expense 8,000 Acquisition of equipment Payment of dividends. 4,000 with cash.... Increase in accounts receivable 6,000 Sale of treasury stock.. Collection of long-term notes receivable 6,000 Payment of long-term debt.... Loss on sale of land. 15,000 Proceeds from sale of land. Decrease in inventories Under the indirect method, net cash provided by operating activities would be 22,000 1,000 16,000 38,000 1,000...
Assets in millions) Liabilities (in millions) Cash 300 Accounts payable 50 Accounts receivable 100 Notes payable...
Assets in millions) Liabilities (in millions) Cash 300 Accounts payable 50 Accounts receivable 100 Notes payable 150 Inventories 200 Total Current Liabilities: 200 Total Current Assets: 600 Long Term Debt 100 Equipment 300 Total Liabilities: 300 Land 100 Common Stock 300 Total Fixed Assets: 400 Retained Earnings 400 Total Assets: 1000 Total Common Equity 700 You are asked to prepare a pro forma balance sheet given the following information. Net earnings are expected to be $100 million. The company wants...
What factors should management consider when deciding on the method to use for controlling and reimbursing...
What factors should management consider when deciding on the method to use for controlling and reimbursing sales reps' expenses? Give some examples of how each factor might influence the decision.
please include T-accounts and the steps Comparative Balance Sheets At 12-31-18 At 12-31-17 Income Statement For...
please include T-accounts and the steps
Comparative Balance Sheets At 12-31-18 At 12-31-17 Income Statement For period 01-01-18 to 12-31-18 Assets Cash Accounts Receivable Inventory Prepaid Expenses Equipment Accum Depreciation Total Assets 515,000 195,000 320,000 $ 52,000 $ 22.000 6 16,000 S 4,000 $ 305,000 $ (15,000 $ 384.000 40,000 27.000 12.000 2,000 240,000 (10,000) 311.000 Sales COGS Gross Profit Operating Expenses Depreciation Expense Other Expenses Total Operating Expenses Income Before Taxes Income Tax Expense Net Income $ $ 5,000...
Acme Company Balance Sheet As of January 5, 2019 (amounts in thousands) Cash 13,700 Accounts Payable...
Acme CompanyBalance SheetAs of January 5, 2021(amounts in thousands)Cash13,700Accounts Payable2,000Accounts Receivable3,200Debt3,600Inventory5,100Other Liabilities900Property Plant & Equipment15,400Total Liabilities6,500Other Assets800Paid-In Capital7,200Retained Earnings24,500Total Equity31,700Total Assets38,200Total Liabilities & Equity38,200Update the balance sheet above to reflect the transactions below, which occur on January 6, 20211. Receive payment of $12,000 owed by a customer2. Purchase equipment for $45,000 in cash3. Issue $85,000 in stock4. Borrow $67,000 from a bank5. Buy $17,000 worth of manufacturing supplies on credit6. Pay $7,000 owed to a supplier7. Receive payment of $11,000...
Suppose a company receives a windfall of cash. What factors should the board of directors consider...
Suppose a company receives a windfall of cash. What factors should the board of directors consider when deciding how to allocate the newly found capital? minimum 150 words
what factors should north consider and what inquiries should north make in deciding whether to use...
what factors should north consider and what inquiries
should north make in deciding whether to use Tyler's internal audit
work?
b. Do professional audit standards require any investigation of prospective clients? c. Suppose Shine also told you that 10 years ago his closely held hamburger franchise busines went bankrupt, and on investigation, you learn from its former auditors (your own firm in anothe city) that Shine was fraudulent in its application of franchise-fee income recognition rules an presented such difficulties...
The following items were taken from the accounting records of a company. Accounts Payable 57,000 Long-term...
The following items were taken from the accounting records of a company. Accounts Payable 57,000 Long-term investments 35,000 Accounts Receivable 32,000 Trademarks 6,000 Building 255,000 Accrued Expenses 9,000 Cash 15,000 Short-term Notes Payable 35,000 Equipment 76,000 Common Stock 1,000 Retained Earnings Interest Income 2,000 Prepaid Expenses 12,000 Inventory 82,000 Sales 123,000 Dividends paid 25,000 Salary Expense 22,000 Cost of Goods Sold 62,000 Prepare a balance sheet. The following items were taken from the accounting records of a company. Accounts Payable...
At the beginning of 2018, the Redd Company had the following balances in its accounts: Cash...
At the beginning of 2018, the Redd Company had the following balances in its accounts: Cash Inventory Common stock Retained earnings $8,400 2,400 7,900 2,900 During 2018, the company experienced the following events: 1. Purchased inventory that cost $5,900 on account from Redd Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $540 were paid in cash. 2. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit....
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
Net income 8,000 The following information pertains to Carolina Company: $ 65,000 Increase in accounts payable .... $ Depreciation expense 8,000 Acquisition of equipment Payment of dividends. 4,000 with cash.... Increase in accounts receivable 6,000 Sale of treasury stock.. Collection of long-term notes receivable 6,000 Payment of long-term debt.... Loss on sale of land. 15,000 Proceeds from sale of land. Decrease in inventories Under the indirect method, net cash provided by operating activities would be 22,000 1,000 16,000 38,000 1,000...
Assets in millions) Liabilities (in millions) Cash 300 Accounts payable 50 Accounts receivable 100 Notes payable 150 Inventories 200 Total Current Liabilities: 200 Total Current Assets: 600 Long Term Debt 100 Equipment 300 Total Liabilities: 300 Land 100 Common Stock 300 Total Fixed Assets: 400 Retained Earnings 400 Total Assets: 1000 Total Common Equity 700 You are asked to prepare a pro forma balance sheet given the following information. Net earnings are expected to be $100 million. The company wants...
please include T-accounts and the steps
Comparative Balance Sheets At 12-31-18 At 12-31-17 Income Statement For period 01-01-18 to 12-31-18 Assets Cash Accounts Receivable Inventory Prepaid Expenses Equipment Accum Depreciation Total Assets 515,000 195,000 320,000 $ 52,000 $ 22.000 6 16,000 S 4,000 $ 305,000 $ (15,000 $ 384.000 40,000 27.000 12.000 2,000 240,000 (10,000) 311.000 Sales COGS Gross Profit Operating Expenses Depreciation Expense Other Expenses Total Operating Expenses Income Before Taxes Income Tax Expense Net Income $ $ 5,000...
what factors should north consider and what inquiries
should north make in deciding whether to use Tyler's internal audit
work?
b. Do professional audit standards require any investigation of prospective clients? c. Suppose Shine also told you that 10 years ago his closely held hamburger franchise busines went bankrupt, and on investigation, you learn from its former auditors (your own firm in anothe city) that Shine was fraudulent in its application of franchise-fee income recognition rules an presented such difficulties...
The following items were taken from the accounting records of a company. Accounts Payable 57,000 Long-term investments 35,000 Accounts Receivable 32,000 Trademarks 6,000 Building 255,000 Accrued Expenses 9,000 Cash 15,000 Short-term Notes Payable 35,000 Equipment 76,000 Common Stock 1,000 Retained Earnings Interest Income 2,000 Prepaid Expenses 12,000 Inventory 82,000 Sales 123,000 Dividends paid 25,000 Salary Expense 22,000 Cost of Goods Sold 62,000 Prepare a balance sheet. The following items were taken from the accounting records of a company. Accounts Payable...
At the beginning of 2018, the Redd Company had the following balances in its accounts: Cash Inventory Common stock Retained earnings $8,400 2,400 7,900 2,900 During 2018, the company experienced the following events: 1. Purchased inventory that cost $5,900 on account from Redd Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $540 were paid in cash. 2. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit....
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