Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 6 percentage points, while selling expenses   by 3 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 3 percentage points.

14 Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 5 percentage points, while selling expenses   by 2 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 2 percentage points.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 6 percentage points, while selling expenses   by 3 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 3 percentage points.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 6 percentage points, while selling expenses   by 3 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 3 percentage points.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales ___ by 5 percentage points, while selling expenses ___ by 2 percentage points, and administrative expenses ___ by 1 percentage points. Thus, net income as a percent of sales ___ by 2 percentage points.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 5 percentage points, while selling expenses   by 2 percentage points, and administrative expenses   by 1 percentage points. Thus, net income as a percent of sales   by 2 percentage points.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales   by 6 percentage points, while selling expenses  by 3 percentage points, and administrative expenses   by 2 percentage points. Thus, net income as a percent of sales   by 3 percentage points.

Lunar Artistry Company needs to purchase new etching and finishing equipment. The owners hope to finance the costly equipment with cash on hand and a short term loan from Erie Bank. The CFO of Lunar Artistry Company has recently completed the sales forecast. She projects sales to increase by 10% each month over the previous month sales for the first quarter with the remaining months remaining constant.

The controller has been asked to prepare the master monthly budget for the first quarter 2021. In the process, the controller has accumulated the following information:

1. Projected Sales for December 2020 are $500,000. Credit sales are 80% of total sales with immediate cash sales as the other 20%. Of the credit sales, cash is collected 20% in the month of the sale and the remainder in the month following the sale.
2. Lunar’s cost of goods sold is generally 60% of the current month sales. All inventory is purchased on account. 40% of inventory purchases are paid for in the month of purchase with the remaining 60% paid the month following the purchase.
3. The controller has determined additional monthly expenses to be as follows:
   1. Salaries                        $55,000 Paid monthly
   2. Advertising                 $20,000 Paid Monthly
   3. Property Taxes            $ 2,900 Paid Feb 28 and Aug 31
   4. Sales Commissions     1.2% of monthly sales
4. The owners of Lunar Artistry Company have selected etching and finishing equipment costing $175,000. They plan to pay cash for the equipment. If they do not have enough cash, assuming the company can maintain a $25,000 balance, the owners will take a short term loan from Erie Bank. The CFO has stated the current interest rate on short term loans is 6% and she anticipates the need for a six-month loan. Interest on short-term loans is payable monthly.
5. Interest is paid each March 31 and September 30 on the Mortgage Payable. The interest rate on the mortgage is 4%
6. The board of directors intends to declare a $40,000 dividend at the end of the first quarter.

REQUIRED:

1. Using the Excel template, complete the sales budget, cash receipt budget, purchase budget, cash disbursement budget and cash budget.
2. Prepare the Budgeted Income Statement, Budgeted Statement of Equity and Budgeted Balance Sheet.
3. As the CFO, write a short memo to the owners recommending whether to purchase the equipment and an appropriate month to make the purchase.

A professor takes a random sample of 25 students and administers a test with questions increasing in difficulty. He takes another sample of 25 students and administers a test with questions decreasing in difficulty. He records measures of test anxiety based on a scale from 1 to 10 (most anxious). Using steps below, run an F test to test the claim that the two given samples come from populations with different variances. Use α = 0.01.

A. State the null and alternative hypotheses in terms of σ₁² & σ₂². Be sure to label which population is which.

B. Find the critical value, Test statistic, and P-value

C. Decision? Reject / Fail to Reject

D. Are the two given samples from populations with different variances? yes/no

Capital budgeting decisions are among the most important decisions facing business entities. Suggest specific milestones needed to evaluate the performance of capital projects and suggest some ways to hold managers accountable for spending overruns. Recommend when capital projects should be abandoned due to subsequent cost overruns. Support your position.