Questions
Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and...

Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet
Following are the income statements and balance sheets of General Mills, Inc.

Income Statement,
Fiscal Years Ended ($ millions)
May 29, 2011 May 30, 2010
Net Sales $ 14,880.2 $ 14,635.6
Cost of sales 8,926.7 8,835.4
Selling, general and administrative expenses 3,192.0 3,162.7
Divestitures (gain), net (17.4) --
Restructuring, impairment, and other exit costs 4.4 31.4
Operating income 2,774.5 2,606.1
Interest, net 346.3 401.6
Earnings before income tax expense and equity in income of affiliates 2,428.2 2,204.5
Income tax expense 721.1 771.2
After-tax earnings from joint ventures 96.4 101.7
Net earnings including noncontrolling interests 1,803.5 1,535.0
Net earnings attributable to noncontrolling interests 5.2 4.5
Net earnings attributable to General Mills $ 1,798.3 $ 1,530.5
Balance Sheet
($ millions)
May 29, 2011 May 30, 2010
Assets
Cash and cash equivalents $ 619.6 $ 673.2
Receivables 1,162.3 1,041.6
Inventories 1,609.3 1,344.0
Deferred income taxes 27.3 42.7
Prepaid expenses and other current assets 483.5 378.5
Total current assets 3,902.0 3,480.0
Land, buildings and equipment 3,345.9 3,127.7
Goodwill 6,750.8 6,592.8
Other intangible assets 3,813.3 3,715.0
Other assets 862.5 763.4
Total assets $ 18,674.5 $ 17,678.9
Liabilities and Equity
Accounts payable $ 995.1 $ 849.5
Current portion of long-term debt 1,031.3 107.3
Notes payable 311.3 1,050.1
Other current liabilities 1,321.5 1,762.2
Total current liabilities 3,659.2 3,769.1
Long-term debt 5,542.5 5,268.5
Deferred income taxes 1,127.4 874.6
Other liabilities 1,733.2 2,118.7
Total liabilities 12,062.3 12,030.9
Stockholders' equity
Common stock, 754.6 shares issued, $0.10 par value 75.5 75.5
Additional paid-in capital 1,319.8 1,307.1
Retained earnings 9,191.3 8,122.4
Common stock in treasury, at cost, shares of 109.8 and 98.1 (3,210.3) (2,615.2)
Accumulated other comprehensive loss (1,010.8) (1,486.9)
Total shareholders' equity 6,365.5 5,402.9
Noncontrolling interests 246.7 245.1
Total equity 6,612.2 5,648.0
Total Liabilities and Equity $ 18,674.5 $ 17,678.9

Forecast General Mill's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed). Assume that depreciation and amortization expense is included as part of selling, general and administrative expense ($ millions).

Net sales growth 4.0%
Cost of sales/Net sales 60.0%
Selling, general and administrative expenses/Net sales 21.5%
Divestitures (gain), net $--
Restructuring, impairment, and other exit costs $--
Interest, net $346.3
Income tax expense/Pretax income 29.7%
After-tax earnings from joint ventures $96.4
Net earnings attributable to noncontrolling interests/Net earnings before attribution 0.5%
  • Round answers one decimal place.

  • Do not use negative signs with your answers.

Income Statement, Fiscal Years Ended ($ millions) 2012
Estimated
Net sales $Answer

Correct
Mark 1.00 out of 1.00

Cost of goods sold Answer

Correct
Mark 1.00 out of 1.00

Selling, general and administrative expenses Answer

Correct
Mark 1.00 out of 1.00

Divestitures (gain), net Answer

Correct
Mark 1.00 out of 1.00

Restructuring, impairment, and other exit costs Answer

Correct
Mark 1.00 out of 1.00

Operating income Answer

Correct
Mark 1.00 out of 1.00

Interest expense Answer

Correct
Mark 1.00 out of 1.00

Earnings before income tax expense and equity in income of affiliates Answer

Correct
Mark 1.00 out of 1.00

Income tax expense Answer

Correct
Mark 1.00 out of 1.00

Equity in income of affiliates Answer

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Mark 1.00 out of 1.00

Net earnings including noncontrolling interests Answer

Correct
Mark 1.00 out of 1.00

Net earnings attributable to noncontrolling interests Answer

Correct
Mark 1.00 out of 1.00

Net earnings attributable to General Mills $Answer

Correct
Mark 1.00 out of 1.00

Forecast General Mill's fiscal 2012 balance sheet using the following relations (assume "no change" for accounts not listed). Assume that all capital expenditures are purchases of land, building and equipment, net. ($ millions).

Receivables/Net sales 7.8%
Inventories/Net sales 10.8%
Deferred income tax/Net sales 0.2%
Prepaid expenses and other current assets/Net sales 3.2%
Other intangible assets $0 amortization
Other Assets/Net sales 5.8%
Accounts payable/Net sales 6.7%
Other current liabilities/Net sales 8.9%
Current portion of long-term debt $733.6
Deferred income taxes/Net sales 7.6%
Other liabilities/Net sales 11.6%
Noncontrolling interests *
Capital expenditures/Net sales 4.4%
Depreciation/Prior year net PPE 20.7%
Dividends/Net income 40.6%
Current maturities of long-term debt in fiscal 2013 $733.6
*increase by net income attributable to noncontrolling interests and assume no dividends
  • Round answers one decimal place.  

  • Do not use negative signs with your answers.

Balance Sheet
($ millions)
2012
Estimated
Assets
Cash and cash equivalents $Answer

Incorrect
Mark 0.00 out of 1.00

Receivables Answer

Correct
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Inventories Answer

Correct
Mark 1.00 out of 1.00

Deferred income taxes Answer

Correct
Mark 1.00 out of 1.00

Prepaid expenses and other Answer

Correct
Mark 1.00 out of 1.00

Total current assets Answer

Incorrect
Mark 0.00 out of 1.00

Land, buildings, and equipment Answer

Incorrect
Mark 0.00 out of 1.00

Goodwill Answer

Incorrect
Mark 0.00 out of 1.00

Other intangible assets Answer

Incorrect
Mark 0.00 out of 1.00

Other assets Answer

Correct
Mark 1.00 out of 1.00

Total assets $Answer

Incorrect
Mark 0.00 out of 1.00

Liabilities and equity
Accounts payable $Answer

Correct
Mark 1.00 out of 1.00

Current portion of long-term debt Answer

Correct
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Notes payable Answer

Incorrect
Mark 0.00 out of 1.00

Other current liabilities Answer

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Mark 1.00 out of 1.00

Total current liabilities Answer

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Total long-term debt Answer

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Deferred income taxes Answer

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Mark 1.00 out of 1.00

Other liabilities Answer

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Total liabilities Answer

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Stockholders equity
Common stock Answer

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Additional paid-in capital Answer

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Retained earnings Answer

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Common stock in treasury Answer

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Accumulated other comprehensive loss Answer

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Total shareholders' equity Answer

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Noncontrolling interests Answer

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Mark 0.00 out of 1.00

Total equity Answer

Incorrect
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Total liabilities and Equity $ Answer

Incorrect
Mark 0.00 out of 1.00

In: Accounting

Following are the financial statements of Target Corporation from its FY2015 annual report. Target Corporation Consolidated...

Following are the financial statements of Target Corporation from its FY2015 annual report.

Target Corporation
Consolidated Statements of Operations
12 Months Ended
$millions Jan. 30, 2016 Jan. 31, 2015 Feb. 01, 2014
Sales 76,785 72,618 71,279
Cost of sales 54,133 51,278 50,039
Gross margin 22,652 21,340 21,240
Selling, general and administrative expenses 15,280 14,676 14,465
Depreciation and amortization 2,213 2,129 1,996
Gain on sale (620) - (319)
Earnings from continuing operations before interest expense & income taxes 5,779 4,535 5,170
Net interest expense 607 882 1,049
Earnings from continuing operations before income taxes 5,172 3,653 4,121
Provision for income taxes 1,681 1,204 1,427
Net earnings from continuing operations 3,491 2,449 2,694
Discontinued operations, net of tax 42 (4,085) (723)
Net earnings (loss) 3,533 (1,636) 1,971


Target Corporation
Consolidated Statements of Financial Position
$millions Jan. 30, 2016 Jan. 31, 2015
Assets
Cash and cash equivalents, inc. short-term investments of $3,008 and $1,520 $4,046 $2,210
Inventory 8,601 8,282
Assets of discontinued operations 322 1,058
Other current assets 1,161 2,074
Total current assets 14,130 13,624
Property and equipment, net 25,817 25,952
Noncurrent assets of discontinued operations 75 717
Other noncurrent assets 840 879
Total assets $40,862 $41,172
Liabilities and Shareholders' investment
Accounts payable $7,418 $7,759
Accrued expenses and other current liabilities 4,236 3,783
Current portion of LT debt and other borrowings 815 91
Liabilities of discontinued operations 153 103
Total current liabilities 12,622 11,736
Long-term debt and other borrowings 11,945 12,634
Deferred income taxes 823 1,160
Noncurrent liabilities of discontinued operations 18 193
Other noncurrent liabilities 1,897 1,452
Total noncurrent liabilities 14,683 15,439
Shareholders' investment
Common stock 50 53
Additional paid-in-capital 5,348 4,899
Retained earnings 8,788 9,644
Accumulated other comprehensive loss
Pension and other benefit liabilities (588) (561)
Currency translation adjustment and cash flow hedges (41) (38)
Total shareholders' investment 13,557 13,997
Total liabilities and shareholders' investment $40,862 $41,172


We forecast Target's income statement using the following forecast assumptions for both years:

Sales (growth rate) 10%
Cost of sales/Sales 70.5%
Selling, general and administrative expenses/Sales 19.9%
Depreciation and amortization (% of prior year PPE, net) 8.4%
Net interest expense No change
Provisions for income taxes/Pretax income 32.5%
Assume Target disposes of the net assets from discontinued operations (assets less liabilities) in FY2016 for proceeds of $350 million.


Instructions: Forecast Target's fiscal year ended 2016 and 2017 income statements.

  • Use the same forecasting assumptions for both years.
  • Round forecasts to $ millions.
  • Use rounded figures for subsequent forecast calculations.
  • Do not use negative signs with your answers in the income statement.

Hint: Forecasted FY2016 gain on sale is computed as proceeds from the disposal of net assets from discontinued operations minus net assets from discontinued operations ($350 million - $226 million). Forecast $0 for gain on sale in FY2017.

Target Corporation
Consolidated Statements of Operations
$ millions FY2016 Est. FY2017 Est.
Sales $Answer

Mark 0.00 out of 1.00

$Answer

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Cost of sales Answer

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Answer

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Gross margin Answer

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Answer

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Selling, general and administrative expenses Answer

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Answer

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Depreciation and amortization Answer

Mark 0.00 out of 1.00

Answer

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Gain on sale Answer

Mark 0.00 out of 1.00

Answer

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Earnings from continuing operations before interest and tax Answer

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Answer

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Net interest expense Answer

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Answer

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Earnings from continuing operations before tax Answer

Mark 0.00 out of 1.00

Answer

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Provisions for income taxes Answer

Mark 0.00 out of 1.00

Answer

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Net earnings $Answer

Mark 0.00 out of 1.00

$Answer

Mark 0.00 out of 1.00


We forecast Target's financials using the following forecast assumptions for both year:

Inventory/Sales 11.7%
Other current assets/Sales 1.6%
Other noncurrent assets/Sales 1.1%
Accounts payable/Sales 10.1%
Accrued and other current liabilities/Sales 5.7%
Deferred income taxes/Sales 1.1%
Other noncurrent liabilities/Sales 2.6%
CAPEX/Sales 1.90%
Dividends/Net income 40.5%
Common stock No change
Additional paid-in capital No change
Accumulated other comprehensive loss No change
Current Maturities L-T Debt for 2016 $751
Current Maturities L-T Debt for 2017 $2,251
Current Maturities L-T Debt for 2018 $201

Assume Target buys back common stock at $2,000 million in FY2016 and retires the stock.

(Hint: Retained earnings are reduced by the cost of the stock buy back.) No stock buybacks happen in FY2017.

Instructions: Forecast Target's fiscal year ended 2016 and 2017 balance sheets.

  • Use the same forecasting assumptions for both years.
  • Round forecasts to $ millions.
  • Use rounded figures for subsequent forecast calculations.
  • Do not use negative signs with your answers in the income statement.
Target Corporation
Consolidated Statements of Financial Position
$ millions FY2016 Est. FY2017 Est.
Assets
Cash and cash equivalents, inc. short-term investments $Answer

Mark 0.00 out of 1.00

$Answer

Mark 0.00 out of 1.00

Inventory Answer

Mark 0.00 out of 1.00

Answer

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Other current assets Answer

Mark 0.00 out of 1.00

Answer

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Total current assets Answer

Mark 0.00 out of 1.00

Answer

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Property and equipment, net Answer

Mark 0.00 out of 1.00

Answer

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Other noncurrent assets Answer

Mark 0.00 out of 1.00

Answer

Mark 0.00 out of 1.00

Total assets $Answer

Mark 0.00 out of 1.00

$Answer

Mark 0.00 out of 1.00

Liabilities and Shareholders' investment
Accounts payable $Answer

Mark 0.00 out of 1.00

$Answer

Mark 0.00 out of 1.00

Accrued expenses and other current liabilities Answer

Mark 0.00 out of 1.00

Answer

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Current portion of LT debt and other borrowings Answer

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Answer

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Total current liabilities Answer

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Answer

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Long-term debt and other borrowings Answer

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Answer

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Deferred income taxes Answer

Mark 0.00 out of 1.00

Answer

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Other noncurrent liabilities Answer

Mark 0.00 out of 1.00

Answer

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Total noncurrent liabilities Answer

Mark 0.00 out of 1.00

Answer

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Shareholders' investment
Common stock Answer

Mark 0.00 out of 1.00

Answer

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Additional paid-in capital Answer

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Answer

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Retained earnings Answer

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Answer

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Accumulated other comprehensive loss Answer

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Answer

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Total shareholders' investment Answer

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Answer

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Total liabilities and shareholders' investment $Answer

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$Answer

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In: Accounting

Question text Reformulating Allowance for Doubtful Accounts and Bad Debt Expense Merck & Company reported the...

Question text

Reformulating Allowance for Doubtful Accounts and Bad Debt Expense

Merck & Company reported the following from its 2016 financial statements.

$ millions 2013 2014 2015 2016
Accounts receivable, net $7,189 $6,631 $6,489 $7,019
Allowance for doubtful accounts 149 156 168 199


a. Compute accounts receivable gross for each year.

$ millions 2013 2014 2015 2016
Accounts receivable, gross $Answer

Correct
The correct answer is: 7338
Mark 1.00 out of 1.00

$Answer

Correct
The correct answer is: 6787
Mark 1.00 out of 1.00

$Answer

Correct
The correct answer is: 6657
Mark 1.00 out of 1.00

$Answer

Correct
The correct answer is: 7218
Mark 1.00 out of 1.00


b. Determine the percentage of allowance to gross account receivables for each year.

Round answers to two decimal places (ex: 0.02345 = 2.35%).

2013 2014 2015 2016
% allowance Answer

Correct
The correct answer is: 2.03
Mark 1.00 out of 1.00

%
Answer

Correct
The correct answer is: 2.3
Mark 1.00 out of 1.00

%
Answer

Correct
The correct answer is: 2.52
Mark 1.00 out of 1.00

%
Answer

Correct
The correct answer is: 2.76
Mark 1.00 out of 1.00

%


c. Assume that we want to reformulate the balance sheet and income statement to reflect a constant percentage of allowance to gross accounts receivables for each year. Compute the four-year average and then reformulate the balance sheet and income statements for each of the four years. Follow the process shown in Analyst Adjustments 5.2 and assume a tax rate of 35%.

Four- year average of percentage of allowance to gross accounts receivables.

Round answer to two decimal places (ex: 0.02345 = 2.35%)

Answer

Correct
The correct answer is: 2.4
Mark 1.00 out of 1.00

%

Reformulate the balance sheet and income statements.

  • Use rounded answer above for computations, then round answers to one decimal place.

  • Use negative signs with answers to indicate the adjustment decreases an account.

2013 2014 2015 2016
Adjusted allowance for doubtful accts. $Answer

Correct
The correct answer is: 176.1
Mark 1.00 out of 1.00

$Answer

Correct
The correct answer is: 162.9
Mark 1.00 out of 1.00

$Answer

Correct
The correct answer is: 159.8
Mark 1.00 out of 1.00

$Answer

Correct
The correct answer is: 173.2
Mark 1.00 out of 1.00

Balance Sheets Adjustments
Allowance for doubtful accounts Answer

Correct
The correct answer is: 27.1
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: 34
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: 25.8
Mark 0.00 out of 1.00

Answer

Correct
The correct answer is: 0
Mark 1.00 out of 1.00

Accounts receivable, net Answer

Correct
The correct answer is: -27.1
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: -34
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: -25.8
Mark 0.00 out of 1.00

Answer

Correct
The correct answer is: 0
Mark 1.00 out of 1.00

Deferred tax liabilities Answer

Correct
The correct answer is: -9.5
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: -11.9
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: -9
Mark 0.00 out of 1.00

Answer

Correct
The correct answer is: 0
Mark 1.00 out of 1.00

Retained Earnings Answer

Correct
The correct answer is: -17.6
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: -22.1
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: -16.8
Mark 0.00 out of 1.00

Answer

Correct
The correct answer is: 0
Mark 1.00 out of 1.00

Income Statements Adjustments
Bad debts expense Answer

Correct
The correct answer is: 27.1
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: 6.9
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: -8.2
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: -25.8
Mark 0.00 out of 1.00

Income tax expense at 35% Answer

Correct
The correct answer is: -9.5
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: -2.4
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: 2.9
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: 9
Mark 0.00 out of 1.00

Net Income Answer

Correct
The correct answer is: -17.6
Mark 1.00 out of 1.00

Answer

Incorrect
The correct answer is: -4.5
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: 5.3
Mark 0.00 out of 1.00

Answer

Incorrect
The correct answer is: 16.8
Mark 0.00 out of 1.00

In: Accounting

Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit...

Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow:

Manufacturing Assembly
Capacity (units) 215000 115000
Sales price * $ 108 $ 375
Variable costs $ 48 $ 150
Fixed costs $ 10150000 $ 6150000

* For Manufacturing, this is the price to third parties.

For Assembly, this does not include the transfer price paid to Manufacturing.

  

Required:

1. Current production levels in Manufacturing are 115000 units. Assembly requests an additional 21500 units to produce a special order. What transfer price would you recommend?

Enter your answer as whole dollars. Do not enter $ or commas.

2. Suppose Manufacturing is operating at full capacity when Assembly requests an additional 21500 units to produce a special order. What transfer price would you recommend?

3. Suppose Manufacturing is operating at 205000 units when Assembly requests an additional 21500 units to produce a special order. What transfer price would you recommend?

In: Accounting

Cornell Corporation manufactures faucets. Several weeks ago, the firm received a special-order inquiry from Yale, Inc....

Cornell Corporation manufactures faucets. Several weeks ago, the firm received a special-order inquiry from Yale, Inc. Yale desires to market a faucet similar to Cornell's model no. 55 and has offered to purchase 3,000 units. The following data are available:

• Cost data for Cornell's model no. 55 faucet: direct materials, $48; direct labor, $30 (2 hours at $15 per hour); and manufacturing overhead, $70 (2 hours at $35 per hour).

• The normal selling price of model no. 55 is $180; however, Yale has offered Cornell only $124 because of the large quantity it is willing to purchase.

• Yale requires a modification of the design that will allow a $7 reduction in direct-material cost.

• Cornell's production supervisor notes that the company will incur $6,433 in additional set-up costs and will have to purchase an $21,700 special device to manufacture these units. The device will be discarded once the special order is completed.

• Total manufacturing overhead costs are applied to production based on direct labor hours. Total budgeted overhead is $840,000. This figure is based on budgeted yearly fixed overhead of $624,000, a budgeted variable overhead of $216,000, and a budgeted activity level of 24,000 direct labor hours.

• Cornell will allocate $8,000 of existing fixed administrative costs to the order as “…part of the cost of doing business.

” Required: A. One of Cornell's staff accountants wants to reject the special order because “financially, it's a loser.” Do you agree with this conclusion if Cornell currently has excess capacity? Show calculations to determine the incremental profit or loss on this special order to support your answer.

B.If Cornell currently has no excess capacity, should the order be rejected? (Assume for part B that Cornell cannot acquire excess capacity via overtime or any other way.) Briefly explain.

In: Accounting

Review Apple Inc.'s financial statements in 2018 10K form and write two paragraphs about Apple's horizontal...

Review Apple Inc.'s financial statements in 2018 10K form and write two paragraphs about Apple's horizontal financial analysis.

In: Accounting

The PC Supply manufactures memory cards that sell to wholesalers for $2.00 each. Variable and fixed...

The PC Supply manufactures memory cards that sell to wholesalers for $2.00 each. Variable and fixed costs are as follows: Variable Costs per card Fixed Costs per Month Manufacturing Direct materials $0.30 Direct labor 0.25 Factory overhead 0.25 0.80 Factory overhead $4,000 Selling and admin. 0.15 Selling and admin. 3,000 Total $0.95 Total $7,000 PC Supply produced and sold 10,000 cards during October 2010. There were no beginning or ending inventories.

a. Prepare a contribution income statement for the month of October.

b. Determine PC Supply’s monthly break-even point in units.

c. Determine the effect on monthly profit of a 1,100 unit increase in monthly sales.

d. If PC Supply is subject to an income tax of 28 percent, determine the dollar sales volume is required to earn a monthly after-tax profit of $22,000.

In: Accounting

La Femme Accessories Inc. produces women's handbags. The cost of producing 1,180 handbags is as follows:...

La Femme Accessories Inc. produces women's handbags. The cost of producing 1,180 handbags is as follows:

Direct materials $15,500
Direct labor 8,400
Factory overhead 6,400
Total manufacturing cost $30,300

The selling and administrative expenses are $27,400. The management desires a profit equal to 18% of invested assets of $498,000.

If required, round your answers to nearest whole number.

a. Determine the amount of desired profit from the production and sale of 1,180 handbags.
$

b. Determine the product cost per unit for the production of 1,180 handbags.
$per unit

c. Determine the product cost markup percentage for handbags.
%

d. Determine the selling price of handbags. Round your answers to nearest whole value.

Cost $per unit
Markup $per unit
Selling price $per unit

In: Accounting

On January 1, 20X8 , Bond Corporation acquired 80 percent of Gale Company's voting stock. On...

On January 1, 20X8 , Bond Corporation acquired 80 percent of Gale Company's voting stock. On the date of acquisition, the book value and fair value of Gale's net assets were equal. Bond uses the equity method of accounting for its ownership of Gale, and includes the amount of accumulated depreciation prior to acquisition in its elimination entries on the consolidation worksheet.

On December 31, 20X8, the trial balances of the two companies are as follows :

Item Debit Credit Debit Credit
Current Assets                          538,000              127,000
Depreciable Assets                          950,000              428,000
Investment in Gale Co.                          298,400
Depreciation Expense                          185,000                12,000
Other Expenses                          550,000                62,000
Dividends Declared                          300,000                40,000
Accumulated Depreciation                   284,000                50,000
Current Liabilities                   250,000              105,000
Long-Term Debt                   220,000                27,000
Common Stock                   328,600              133,000
Retained Earnings                   750,000              119,000
Sales                   860,000              235,000
Income from Gale Co.                          128,800
                                2,692,600                        2,692,600                     669,000                     669,000

a)   What amount did Bond Corporation pay for its investment in Gale Company on January 1, 20X8?
b)   Prepare the elimination entries required to prepare the consolidated financial statements as of December 31, 20X8.
c)   Determine the amount reported on the consolidated financial statements as of December 31, 20X8 for retained earnings .
d)   Determine the amount reported on the consolidated financial statements as of December 31, 20X8 for depreciable assets.

In: Accounting

Cliffhangers Company had the following product information for March 2019: Selling Price $149 per unit Direct...

Cliffhangers Company had the following product information for March 2019:

Selling Price $149 per unit
Direct Materials $35 per unit
Direct Labor $29 per unit
Variable Manufacturing Overhead $13 per unit

Variable selling $6 per unit

  
Fixed Manufacturing Overhead . $129,000

Fixed Selling $164,000
Production 5,800 units
Sales (units) 4,400 units

REQUIRED:

  1. What is the product cost per unit under absorption costing?

  2. What is the product cost per unit under variable costing?

  3. Prepare an income statement using absorption costing.

  4. Prepare an income statement using variable costing.

In: Accounting

What are two methods of conducting business in the U.S. Compare the tax advantages and disadvantages....

What are two methods of conducting business in the U.S. Compare the tax advantages and disadvantages. Provide examples to support the advantages and disadvantages identified.

In: Accounting

Luo Inc. had the following statement of financial position at December 31, 2014 (amounts in thousands)....

Luo Inc. had the following statement of financial position at December 31, 2014 (amounts in thousands).

LUO INC.

Statement of Financial Position

December 31, 2014

Investments

¥ 32,000

Share capital—ordinary

¥100,000

Plant assets (net)

81,000

Retained earnings

23,200

Land

40,000

Bonds payable

41,000

Accounts receivable

21,200

Accounts payable

30,000

Cash

20,000

¥194,200

¥194,200

During 2015, the following occurred.

1. Luo liquidated its non-trading equity investment portfolio at a loss of ¥5,000.

2. A tract of land was purchased for ¥38,000.

3. An additional ¥30,000 in ordinary shares were issued at par.

4. Dividends totaling ¥10,000 were declared and paid to shareholders.

5. Net income for 2015 was ¥35,000, including ¥12,000 in depreciation expense.

6. Land was purchased through the issuance of ¥30,000 in additional bonds.

7. At December 31, 2015, Cash was ¥70,200, Accounts Receivable was ¥42,000, and Accounts Payable was ¥40,000.

Instructions

Prepare a statement of cash flows for the year 2015 for Luo.

In: Accounting

Dan is Single, Age 47 and has a new business on 1/15/2018, he provides service for...

Dan is Single, Age 47 and has a new business on 1/15/2018, he provides service for a summer camp for children.

Dan's 2018 transactions related to business:

Income    $100,000


Mortgage Interest 8,000


Property Taxes 3,000

Utilities    5,000

Supplies    7,000

Telephone fees 2,000

Estimated Federal Tax
Payments    15,000

Dan Purchased a commercial building on 2/1/2018 for $300,000 in which (building=80% of the cost and land= 30% of the cost).
Dan also purchased a computer for his business on 2/15/2018 for $2000. Dan does not take section 179 deduction or bonus depreciation.

Question 1) are the business expense deductions FOR AGI or FROM AGI ?
Question 2) List any non deductible expenses
Question 3) If Dan Sells the computer on 9/20/19 for $600, what is his gain of loss?

In: Accounting

Discuss the successful application of the Balanced Scorecard of the computer industry or sector. Find and...

Discuss the successful application of the Balanced Scorecard of the computer industry or sector. Find and list the reasons for the success and at least two factors that posed a problem.

In: Accounting

Valotic Tech Inc. sells electronics over the Internet. The Consumer Products Division is organized as a...

Valotic Tech Inc. sells electronics over the Internet. The Consumer Products Division is organized as a cost center. The budget for the Consumer Products Division for the month ended January 31 is as follows (in thousands):

Question not attempted.

1

Customer service salaries

$546,840.00

2

Insurance and property taxes

114,660.00

3

Distribution salaries

872,340.00

4

Marketing salaries

1,028,370.00

5

Engineer salaries

836,850.00

6

Warehouse wages

586,110.00

7

Equipment depreciation

183,792.00

8

Total

$4,168,962.00

During January, the costs incurred in the Consumer Products Division were as follows:

Question not attempted.

1

Customer service salaries

$602,350.00

2

Insurance and property taxes

110,240.00

3

Distribution salaries

861,200.00

4

Marketing salaries

1,085,230.00

5

Engineer salaries

820,008.00

6

Warehouse wages

562,632.00

7

Equipment depreciation

183,610.00

8

Total

$4,225,270.00

Required:
1. Prepare a budget performance report for the director of the Consumer Products Division for the month of January. For those boxes in which you must enter subtractive or negative numbers use a minus sign.
2.

For which costs might the director be expected to request supplemental reports?

1. Prepare a budget performance report for the director of the Consumer Products Division for the month of January. For those boxes in which you must enter subtractive or negative numbers use a minus sign.

Question not attempted.

Valotic Tech Inc.

Budget Performance Report—Director, Consumer Products Division

For the Month Ended January 31 (in thousands)

1

Actual

Budget

Over Budget

Under Budget

2

Customer service salaries

3

Insurance and property taxes

4

Distribution salaries

5

Marketing salaries

6

Engineer salaries

7

Warehouse wages

8

Equipment depreciation

9

2. For which costs might the director be expected to request supplemental reports?

All salaries: customer service, distribution, marketing, and engineer

Customer service salaries

Customer service and marketing salaries as well as warehouse wages

Customer service and marketing salaries

Warehouse wages and engineer salaries

Marketing salaries

In: Accounting