Problem 8-80A
Ratio Analysis

Consider the following information taken from GER's financial statements:

Also, GER's operating cash flows were $12,829 and $14,874 in 2020 and 2019, respectively.

Required:

Round your answers to two decimal places.

1. Calculate the current ratios for 2020 and 2019.

2. Calculate the quick ratios for 2020 and 2019.

3. Calculate the cash ratios for 2020 and 2019.

4. Calculate the operating cash flow ratios for 2020 and 2019.

5. Conceptual Connection: What are some reasons why GER's liquidity may be considered to be improving and some reasons why it may be worsening?

GER’s liquidity appears to hold constant when one looks only at the quick ratio . However, because the receivables and inventories  may not be easily converted to cash, the liquidity of GER may be worsening.

A. Journalize the following transactions and post them to ledger. From the following transactions of Phoenix Inc for Oct ,2016. (i)Journalize the below transactions (ii)Post the Journal entries in to ledger accounts Date Transactions 2016 Oct 1 Niel started business with cash $ 800,000 Oct 2 purchased goods worth $ 3000 Oct 15 Sold goods for $ 25000 Oct 18 Purchased stationeries $4000 Oct 23 Purchased furniture for $ 24,000 Oct 25 Paid electricity charges with cash $3000 Oct 26 Paid Salary $18000 Oct 28 Paid rent $500 B. “Bookkeeping is synonymous to accounting” Analyse this statement.

Sheffield Warehouse distributes hardback books to retail stores and extends credit to all of its customers. During the month of June, the following merchandising transactions occurred. June 1 Purchased books on account for $2,845 from Catlin Publishers. 3 Sold books on account to Garfunkel Bookstore for $1,400. The cost of the merchandise sold was $800. 6 Received $45 credit for books returned to Catlin Publishers. 9 Paid Catlin Publishers in full. 15 Received payment in full from Garfunkel Bookstore. 17 Sold books on account to Bell Tower for $1,400. The cost of the merchandise sold was $850. 20 Purchased books on account for $800 from Priceless Book Publishers. 24 Received payment in full from Bell Tower. 26 Paid Priceless Book Publishers in full. 28 Sold books on account to General Bookstore for $1,700. The cost of the merchandise sold was $770. 30 Granted General Bookstore $210 credit for books returned costing $30. Need to know what each one is for either positive or negative for cash, accts Rec, Inv, accts pay, common stock, rev, exp.

Need to know if positive or negative for either cash, accts rec, inv, accts pay, common stock, rev, exp.

Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting records for the most popular item in inventory showed the following: Transactions Units Unit Cost Beginning inventory, January 1 410 $4.00 Transactions during the year: a. Purchase, January 30 310 3.50 b. Purchase, May 1 470 5.00 c. Sale ($6 each) (170) d. Sale ($6 each) (710) Required: a. Compute the amount of goods available for sale. b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Examine the wellness wheel. The wellness wheel provides the different aspects of a person’s life that contributes to a good quality of life. Which among these do you want to improve? Which aspects of your life do you want to focus on? Write a letter to yourself or to other people on what you will do given this pandemic. For example, if you choose, the physical wellness, what will you do to achieve physical wellness (e.g. exercise, eat healthy, etc.). Specify and elaborate. This will serve as your commitment to remain positive in this trying time. You may choose at least one or more than one it depends on you.

PLEASE ANSWER ASAP THANKS

Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment
Roopali is considering an investment proposal with the following cash flows:

For parts b. and c., round answers to three decimal places, if applicable.

a. Determine the payback period.
Answer

years

b. Determine the accounting rate of return on initial investment
Answer

c. Determine the accounting rate of return on average investment
Answer

2- Henrietta is self-employed and would like to know what kind of deduction she could get for her home office. She has gross income from her business of $150,000. Her total home square footage is 2,500. The square footage of her office is 150. Total utilities $600. Total home mortgage interest $10,000. Total real estate taxes $4,000.

1. Explain to Henrietta the options for calculating the home office deduction.
2. Based on the information provided what would be Henrietta’s deduction?
3. What information should you discuss with Henrietta regarding the requirements of taking this deduction?

Ranking Investment Proposals:Payback Period, Accounting Rate of Return, and Net Present Value
Presented is information pertaining to the cash flows of three mutually exclusive investment proposals:

Select the best investment proposal  using the payback period, the accounting rate of return on initial investment, and the net present value criteria. Assume that the organization's cost of capital is 14 percent.

Note: Follow rounding instructions noted for each computation. Use a negative sign with your answers, when appropriate.

5. Following information is available for two companies. Analyze the information and answer the questions: a. M G Industries manufactures various types of industrial chemicals. The company had a total asset turnover of 2.5 times for the year ended 31st March 2019. The sales for the year were ₹ 35,50,000. Total assets were ₹ 12,35,890 as on 31st March 2018. Assume that compared to 31st March 2019, total assets were projected to increase by 12% by 31st March 2020. The company projected a total asset turnover of 2.8 times for the year ending 31st March 2020. Given this information, what are the projected sales for year ending 31st March 2020? b. An airline company has taken many aircrafts on lease. Its EBIT for the year ended 31st March 2019 was ₹124.68 crores. Interest coverage ratio was impressive at 5.6 times. However its fixed charges coverage ratio was only 1.4 times. The fixed charges were lease rentals for the aircrafts. Given this information, calculate the lease rentals for the year.

List of account activity and how they are added or subtracted on the statement of cash flows?

1. Cash Received from Customers

2. Decrease in Accounts Receivable

3. Increase in Inventory

4. Decrease in Inventory

5. Increase in Prepaid Expenses

6. Decrease in Prepaid Expenses

7. Equipment Purchase

8. Sale of Equipment

9. Paid Salaries and Wages

10. Cash Received from Issuing Stock

11. Cash Paid for Income Taxes

12. Cash Paid to purchase investments in Securities

13 Dividends Paid to Owners

14. Interest Paid in Liabilities

15. Cash Used to repay Principal to Lenders

16. Cash Used to Repurchase Stock from Owners

17. Cash Provided by Dividends and Interest on Investments

18. Cash from Sale or Maturity of Investments in Securities

19. Cash Provided by Borrowing from a Bank

20. Depreciation Expense

Jason Ackerman is the management accountant for Central Restaurant Supply ​(CRS. Beth Donaldson, the CRS sales​ manager, and Jason are meeting to discuss the profitability of one of the​ customers, Mama Leone's Leone's Pizza. Jason hands Beth the following analysis of Mama Leone's activity during the last​ quarter, taken from Central ​activity-based costing​ system:

Sales $23,400

Cost of goods sold (all variable) 14,025

Order processing (25 orders processed at $300 per order) 7,500

Delivery (2,500 miles driven at $0.75 per mile) 1,875

Rush orders (3 rush orders at $165 per rush order) 495

Sales calls (3 sales calls at $150 per call) 450

Operating income $ (945)

Beth looks at the report and​ remarks, "I'm glad to see all my hard work is paying off with Mama Leone's. Sales have gone up 10 % over the previous​ quarter!"

Jason ​replies, "Increased sales are​ great, but​ I'm worried about Mama Leone's ​margin, Beth. We were showing a profit with Mama Leone's at the lower sales​ level, but now​ we're showing a loss. Gross margin percentage this quarter was 40 %​, down five percentage points from the prior quarter.​ I'm afraid that corporate will push hard to drop them as a customer if things​ don't turn​ around."

​"That's crazy," Beth responds.​ "A lot of that overhead for things like order​ processing, deliveries, and sales calls would just be allocated to other customers if we dropped Mama Leone's. This report makes it look like​ we're losing money on Mama Leone's when​ we're not. In any​ case, I am sure you can do something to make its profitability look closer to what we think it is. No one doubts that Mama Leone's is a very good​ customer."

Requirements

Assume that Beth is partly correct in her assessment of the report. Upon further​ investigation, it is determined that 10 % of the order processing costs and 20 % of the delivery costs would not be avoidable if CRS were to drop Mama Leone's. Would CRS benefit from dropping Mama Leone's​? Show your calculations.

Beth​'s bonus is based on meeting sales targets. Based on the preceding information regarding gross margin​ percentage, what might Beth have done last quarter to meet her target and receive her​ bonus? How might CRS revise its bonus system to address​ this?

Should Jason rework the​ numbers? How should he respond to Beth​'s comments about making Mama Leone's look more​ profitable?

Direct Labor Variances

The following data relate to labor cost for production of 3,400 cellular telephones:

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.

Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

The company has reported the following actual results for the product for September:

Required:

a. Compute the materials price variance for September.

b. Compute the materials quantity variance for September.

c. Compute the labor rate variance for September.

d. Compute the labor efficiency variance for September.

e. Compute the variable overhead rate variance for September.

f. Compute the variable overhead efficiency variance for September.

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

1. Problem 8-77A
   Excise Taxes

   Reagan Gas provides gas utilities to a wide area of eastern Illinois. During May 2019 it billed 36,000 of its residential customers located in the town of Moline a total of $3,295,000 for electricity (this is considered revenue). In addition Reagan is required to collect the following taxes:

   1. State excise tax: A tax of $5.00 per customer plus 3% of billing used to fund the Illinois Energy Commission
   2. Federal excise tax: A tax of $0.45 per customer plus 0.2% of billing used to fund the Federal Energy Commission

   Required:

   1. Determine how much Reagan will bill these customers in total for the month of May 2019.
   $

   2. Prepare the entry to record the billing of these amounts. If an amount box does not require an entry, leave it blank.

   	(Record sale)

   3. Prepare the entry to record the collection of these amounts.

   	(Record collection of receivables)

   4. Prepare the entry to record the payment of the state excise taxes to the appropriate governmental unit.

   	(Record payment)

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