When managers set goals for employees at the beginning of the year, they often “negotiate” the goal.When doing so, how would you recommend they think about how difficult the goal should be to achieve?
In: Economics
The following is the income statement for Nikov and Co. for the year ended 31 December 2014, along with information relating to the preceding year.
Income statement for the year ended 31 December
| 2014 £000 |
2013 £000 |
|
|---|---|---|
| Sales revenue | 420.2 | 382.5 |
| Cost of sales | (126.1) | (114.8) |
| Gross profit | 294.1 | 267.7 |
| Salaries and wages | (92.6) | (86.4) |
| Selling and distribution costs | (98.9) | (75.4) |
| Rent and rates | (22.0) | (22.0) |
| Bad debts written off | (19.7) | (4.0) |
| Telephone and postage | (4.8) | (4.4) |
| Insurance | (2.9) | (2.8) |
| Motor vehicle expenses | (10.3) | (8.6) |
| Depreciation – delivery van | (3.1) | (3.3) |
| – fixtures and fittings | (4.3) | (4.5) |
| Operating profit | 35.5 | 56.3 |
| Loan interest | (4.6) | (5.4) |
| Profit for the year | 30.9 | 50.9 |
Required:
Analyse the performance of the business for the year to 31 December 2014 in so far as the information allows.
In: Accounting
The following data are available for Sellco for the fiscal year
ended on January 31, 2017:
| Sales | 770 | units | |||
| Beginning inventory | 240 | units | @ | $ | 3 |
| Purchases, in chronological order | 320 | units | @ | $ | 4 |
| 400 | units | @ | $ | 7 | |
| 220 | units | @ | $ | 7 |
|
Required: a. Calculate cost of goods sold and ending inventory under the cost flow assumptions, FIFO, LIFO and Weighted average (using a periodic inventory system): (Round unit cost to 2 decimal places.) |
|
+b. Assume that net income using the weighted-average cost flow assumption is $13,400. Calculate net income under FIFO and LIFO. (Round unit cost to 2 decimal places.)
|
+
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In: Accounting
Income Statement
For the Year Ended December 31, 2018
Sales $8,500,000
Manufacturing Expenses
Variable $3,250,000
Fixed overhead 640,000 3,890,000
Gross Margin $4,610,000
Selling and administrative expenses
Commissions $580,000
Fixed marketing expenses 300,000
Fixed admin expenses 450,000 1,330,000
Net Operating Income $3,280,000
Fixed Interest expenses 230,000
Income before Taxes $3,050,000
Income Taxes (21%) 640,500
Net Income $2,409,500
Your company is considering out-sourcing the sales and marketing to an agency specializing in these types of sales. The outsourcing would remove the commissions, reduce the marketing by $270,000, and reduce the fixed administrative expenses by $35,000. The out-sourcing firm, Jangler Marketing, will charge a fee of 14% of sales. Jangler requires a 3-year contract. Jangler believes that it can increase sales by 10% for 2019 and 13% each year after (2020 and 2021). The company believes that with its current sales and marketing staff, sales will increase by 8% for 2019 and 9% in each year after (2020 and 2021).
1.Prepare contribution format projected income statements for 2019, 2020 & 202a assuming the company hires Jangler Marketing.
2.Prepare contribution format projected income statements assuming the outsourcing is rejected.
In: Accounting
| Consider the following. |
| a. |
What is the duration of a two-year bond that pays an annual coupon of 8 percent and whose current yield to maturity is 10 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) |
| Duration of a bond |
| b. |
What is the expected change in the price of the bond if interest rates are expected to decline by 0.3 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
| Expected change in the price |
$ |
In: Finance
The client has a subsidiary in the USA and another in Canada, which this year together accounted for 8% of the group’s revenue, profit and net assets. Neither subsidiary is audited although both use external professional accountant to prepare the financial statement. The client’s management was unwilling to ask local accountants to perform a full audit.
Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
In: Accounting
The following table shows the U.S. rates of personal tax as of the year 2016, and these tax rates presented in this table are marginal tax rates. (This is Table 3.7 on Page 74 of your textbook.)
|
Single Taxpayers |
Married Taxpayers Filing Joint Returns |
Tax Rate (%) |
|
0-$9,275 |
0-$18,550 |
10.0 |
|
$9,276-$37,650 |
$18,551-$75,300 |
15.0 |
|
$37,651-$91,150 |
$75,301-$151,900 |
25.0 |
|
$91,151-$190,150 |
$151,901-$231,450 |
28.0 |
|
$190,151-$413,350 |
$231,451-$413,350 |
33.0 |
|
$413,351-$415,050 |
$413,351-$466,950 |
35.0 |
|
$415,051 and above |
$466,951 and above |
39.6 |
Based on this table, answering the following questions:
(Please show your intermediate processes, instead of just a final number for your answers. Only round your final answers to two decimal places.)
(a1) Suppose there is a person called Alpha who has an annual income of $300,000 and Alpha’s spouse has an annual income of $20,000. What dollar amount of tax do Alpha and Alpha’s spouse each need to pay respectively, if they choose to file their taxes separately? What dollar amount of tax do they need to pay if they choose to file their taxes jointly?
(a2) What are the average tax rates for Alpha and Alpha’s spouse respectively, if they choose to file separately? What is the average tax rate if they choose to file jointly?
(b1) Suppose there is another person called Beta who has an annual income of $160,000 and Beta’s spouse also has an annual income of $160,000. What dollar amount of tax do Beta and Beta’s spouse each need to pay respectively, if they choose to file their taxes separately? What dollar amount of tax do they need to pay if they choose to file their taxes jointly?
(b2) What are the average tax rates for Beta and Beta’s spouse respectively, if they choose to file separately? What is the average tax rate if they choose to file jointly?
(c) Based on what you obtained from (a1) to (b2), what are the conclusions you could infer regarding the ways of filing taxes? (What are the advantages and disadvantages of these two ways?)
In: Finance
This year Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $72,100 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses below:
| Cost of moving his possessions to the city (125 miles away) | $ | 1,200 |
| Interest paid on accumulated student loans | 2,960 | |
| Cost of purchasing a delivery uniform | 1,560 | |
| Contribution to State University deliveryman program | 1,380 | |
Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan’s student loans this year.
In: Accounting
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement:
| McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $361,360 | $304,000 | |
| Cost of goods sold | 262,200 | 190,000 | |
| Gross profit | $99,160 | $114,000 | |
| Selling expenses | $38,350 | $26,000 | |
| Administrative expenses | 21,470 | 16,000 | |
| Total operating expenses | $59,820 | $42,000 | |
| Income from operations | $39,340 | $72,000 | |
| Other revenue | 1,580 | 1,300 | |
| Income before income tax | $40,920 | $73,300 | |
| Income tax expense | 11,500 | 22,000 | |
| Net income | $29,420 | $51,300 | |
Required:
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages to one decimal place. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns.
| McDade Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 | 20Y1 | Increase (Decrease) - Amount | Increase (Decrease) - Percent | |
| Sales | $361,360 | $304,000 | $ | % |
| Cost of goods sold | 262,200 | 190,000 | % | |
| Gross profit | $99,160 | $114,000 | $ | % |
| Selling expenses | $38,350 | $26,000 | $ | % |
| Administrative expenses | 21,470 | 16,000 | % | |
| Total operating expenses | $59,820 | $42,000 | $ | % |
| Income from operations | $39,340 | $72,000 | $ | % |
| Other revenue | 1,580 | 1,300 | % | |
| Income before income tax | $40,920 | $73,300 | $ | % |
| Income tax expense | 11,500 | 22,000 | % | |
| Net income | $29,420 | $51,300 | $ | % |
2. Net income has_______ from 20Y1 to 20Y2. Sales have ;_______ however, the cost of goods sold has ,_______ causing the gross profit to ________
In: Accounting
At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:
| Cash balance, September 1 (from a summer job) | $10,850 |
| Purchase season football tickets in September | 200 |
| Additional entertainment for each month | 310 |
| Pay fall semester tuition in September | 5,600 |
| Pay rent at the beginning of each month | 750 |
| Pay for food each month | 690 |
| Pay apartment deposit on September 2 (to be returned December 15) | 750 |
| Part-time job earnings each month (net of taxes) | 1,500 |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.
| Craig Kovar | ||||||||||||||||||
| Cash Budget | ||||||||||||||||||
| For the Four Months Ending December 31 | ||||||||||||||||||
| September | October | November | December | |||||||||||||||
| Estimated cash receipts from: | ||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||
| Total cash receipts | $ | $ | $ | $ | ||||||||||||||
| Less estimated cash payments for: | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | $ | $ | ||||||||||||||||
| Total cash payments | $ | $ | $ | $ | ||||||||||||||
| Cash increase (decrease) | $ | $ | $ | $ | ||||||||||||||
| Cash balance at end of month | $ | $ | $ | $ | ||||||||||||||
b. Are the four monthly budgets that are presented prepared as
static budgets or flexible budgets?
c. What are the budget implications for Craig Kovar?
Craig can see that his present plan sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $ at the end of December, with no time left to adjust.
In: Accounting