You are a financial consultant and have been asked to forecast how much revenue your client organization must generate per case to meet its financial requirements. Your client has provided you with the information below. You need to provide the following information to your client:

The target case rate

AND

A brief analysis of the impact of a 5% reduction in the budgeted expense.

(Revenue recognition- installment sales)The Garcia Corp is a real estate developer. In Year 1, it sold a house to Michael Sukul for $200,000, in return for five yearly installments of $40,000 each, plus interest. The first installment was paid at the time of sale. The house cost Garcia $115,000 to build. Compute the revenue and cost of sales that Garcia would recognize each year from Year 1 to Year 5 if it used.

A. Immediate recognition at time of sale

B. The installment method

C. The cost recovery method

abc ltd. revenue for 2012 amounted to $564 000 (2011- $315 000) purchases of inventory for the two years were as follows: 2012 - $303 000 2011 - $182 500 operating expenses were : 2012 $100 000 2011 $78 000 profit before tax at the end of 2012 was $27 500. no dividends had been paid in the last few years. taking into account the above information, the directors decided to change the basis for valuing inventories to weighted average cost as it will result in a more appropriate presentation of events/ transaction in the financial statements of the company.a summary of the closing inventories is provided below: 2009 ($) 2010 ($) 2011 ($) 2012 ($) on the first in, first out method 18 000 19 500 27 000 48 000 on t he wei ght ed aver age cost met hod 19 000 22 900 34 800 51 000required prepare the statement of comprehensive income for abc ltd for the year ended 31 december 2012, applying the new inventory valuation method.

A retail company receives most of its revenue from credit or debit card transactions or payments by check. Funds received from credit and debit card transactions automatically deposit in interest bearing accounts. However, the company does receive some cash payments from customers each day. These cash receipts total $7,250,000 annually. The company makes no cash payments to its suppliers or creditors. Money held in the cash account earns no interest. The company estimates that the transaction cost of moving funds from the cash account into investments that earn interest are $30.00 regardless of the amount transferred. The company earns on average 1.65% interest on funds held in interest bearing accounts and investments. 1. How much cash should the company allow to accumulate before making a deposit if it wants to minimize the total cost associated with carrying and converting cash? 2. If the company follows the optimal strategy identified in question 1, how frequently (on average) will the company move cash from the cash account into interest bearing investments? 3. If the company transfers funds as frequently as indicated in question 2: a. what will the total annual costs to transfer funds be? b. what will the average balance in the company’s cash account be? c. how much interest will the company forego annually by keeping funds in the cash account? d. what is the total cost to maintain a cash account? 4a. Determine the total cost associated with the cash account if the company transfers funds to interest bearing investments weekly rather than as often as indicated in question 2.

Which of the following items creates complications related to revenue recognition?

Select one:

A. Bonuses tied to sales goals

B. Long-term construction contracts

C. Multiple element sales contracts

D. Consignment goods

E. All of the above

2)

The year-end Year 2 financial statements for Grandier Inc., report net sales of $117,351 million, net operating profit after tax of $4,687 million, net operating assets of $39,502 million. The year-end Year 1 balance sheet reports net operating assets of $42,683 million.

The company’s year-end Year 2 net operating asset turnover is:

Select one:

a. 2.97

b. 2.86

c. 11.9%

d. 11.4%

e. There is not enough information to calculate the ratio.

3. Apple’s Worldwide Revenues from 2004 to 2019 is as follows:
Year Worldwide Revenue in Billions
2004 8.2
2005 13.9
2006 19.3
2007 24.6
2008 37.5
2009 42.9
2010 65.2
2011 108.2
2012 156.5
2013 170.9
2014 182.8
2015 233.72
2016 215.64
2017 229.23
2018 265.6
2019 260.17

a. Enter the data above into the tab labeled Apple. Graph the data in Excel and use your graph to determine what kind of time series pattern exist. Put your answer in your spreadsheet.
b. Make the following forecasts for 2020. For all of them, use Mean Squared Error to determine which of the forecasts is the best. Make sure your answers are clearly labeled.
i. Naïve forecast from one prior time period
ii. Calculate a 4-period moving average
iii. Calculate a 3-period moving average with the following weights for time t: time period t-1=0.8, t-2 = 0.15, t-3=.05
c. In the tab called Apple Smoothing, use the data from 3. to forecast 2020 using an alpha equal to 0.7, 0.8, and 0.9. Using MSE, which one offers the best estimate for 2020?
d. In the tab called Apple Regression, use the information from 3. and run a regression to determine your forecast for 2020
i. Put your regression output in F1 of the same workbook.
ii. Calculate what your forecast is for 2020 in F21.
iii. How does well does this regression equation predict revenue? Write your answer in F22. In addition, explain what your numerical answer means in words.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Match the event with the appropriate result.

Bob Ross Ltd builds large ships and uses the percentage of completion method of revenue recognition. The following information pertains to the construction contracts it had in place as of its December 31, 2012 year-end.

4a1) How much revenue will Bob's Construction recognize in 2011?

4a2) How much G.P. will Bob's Construction recognizes in 2012?

____________________________________________

4b) Bob Ltd. entered a contract to build a new airport terminal for $2,500,000. Construction commenced on August 1, 2011, with a planned completion date of December 31, 2013. A summary of the costs, billings, and collections is provided below:

Bob uses the percentage of completion method. What amount would appear as accounts receivable on Bob's December 31, 2012 balance sheet?

____________________________________________

4c) With the same data as 4b, Bob's Construction Ltd. entered a contract to build a new airport terminal for $2,500,000. Construction commenced on August 1, 2011, with a planned completion date of December 31, 2013.  Bob uses the percentage of completion method. How much gross profit would Bob's Construction recognize in 2012?

Physician Office Revenue for Visit Code 99214 has a full established rate of $72.00. Of ten different payers, there are nine different contracted rates, as follows:

Payer                          Contracted Rate      

FHP                                    $35.70

HPHP                                   58.85

MC                                       54.90

UND                                    60.40

CCN                                     70.20

MO                                      70.75

CGN                                    10.00

PRU                                     54.90

PHCS                                   50.00

ANA                                    45.00

Rates for illustration only.

Required

1.      Set up a worksheet with four columns: Payer, Full Rate, Contracted Rate, and Contractual Allowance.

2.      For each payer, enter the full rate and the contracted rate.

3.      For each payer, compute the contractual allowance.

The first payer has been computed below:

               Full                  Contracted          Contractual
Payer     Rate       (less)        Rate         =      Allowance
FHP      $72.00                   $35.70                 $36.30