1.
Accounts payable (a
.k.a. trade accounts payable) is the account credited when goods or services are purchased on
open account (meaning payment has been delayed - often due in 30 days).
a.
Explain the following: 1.5/10, n/30
b.
In the above example, what is the effective interest rate earned by taking advantage of the discount
(paying before the 30 days).
2.
Explain the difference between accounts Payable and notes Payable
.
3.
Explain the difference between an interest bearing note and a non-interest bearing note
.
4.
What is the difference between
unearned revenue
(sales) and
revenue
. Prepare the journal entry for each of the
following:
a.
Sold $15,000 of product in a cash sale.
b.
Received $15,000 payment in advance from customer for product to be shipped in 20 d
In: Accounting
Assuming the number of units sold and produced are the same, which of the following statements is true when comparing net income using absorption and direct costing?
|
a. |
Absorption costing will yield a higher net income. |
|
b. |
Direct costing will yield a higher net income. |
|
c. |
Net income will be the same under both methods. |
|
d. |
Direct costing will have higher sales revenue. |
9. Assuming that the number of units produced is greater than the number of units sold, which of the following statements is true when comparing net income using absorption and direct costing?
|
a. |
Absorption costing will yield a higher net income. |
|
b. |
Direct costing will yield a higher net income. |
|
c. |
Net income will be the same under both methods. |
|
d. |
Sales revenue will be less using absorption costing. |
In: Accounting
Indiana Co. began a construction project in 2021 with a contract
price of $163 million to be received when the project is completed
in 2023. During 2021, Indiana incurred $39 million of costs and
estimates an additional $81 million of costs to complete the
project. Indiana recognizes revenue over time and for this project
recognizes revenue over time according to the percentage of the
project that has been completed.
In 2022, Indiana incurred additional costs of $59 million and
estimated an additional $36 million in costs to complete the
project. Indiana (Do not round your percentage
calculated):
Multiple Choice
Recognized $4.00 million gross profit on the project in 2022.
Recognized $27.50 million gross profit on the project in 2022.
Recognized $7.23 million gross profit on the project in 2022.
Recognized $29.00 million gross profit on the project in 2022.
In: Accounting
As vice president of sales for a rapidly growing company, you are grappling with the question of expanding the size of your direct sales force (from its current level of 60 national salespeople). You are considering hiring from 5 to 10 additional personnel.
sing hypotherical numbers, please explain (show work on excel):
a)How would you estimate the additional dollar cost of each additional salesperson?
b) Based on your company’s past sales experience, how would you estimate the expected net revenue generated by an additional salesperson? (Be specific about the information you might use to derive this estimate.)
c) How would you use these cost and revenue estimates to determine whether a sales force increase (or possibly a decrease) is warranted?
In: Economics
Required information
[The following information applies to the questions
displayed below.]
In 2018, the Westgate Construction Company entered into a contract
to construct a road for Santa Clara County for $10,000,000. The
road was completed in 2020. Information related to the contract is
as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,291,000 | $ | 3,555,000 | $ | 2,259,400 | |||
| Estimated costs to complete as of year-end | 5,609,000 | 2,054,000 | 0 | ||||||
| Billings during the year | 2,110,000 | 3,736,000 | 4,154,000 | ||||||
| Cash collections during the year | 1,855,000 | 3,500,000 | 4,645,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
rev: 09_15_2017_QC_CS-99734
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)
In: Accounting
"Budgets"
Please respond to the following:
Analyze the major pros and cons of preparing annual company budgets. Identify at least two (2) critical budget line items that you believe are essential for managing your company. Provide a rationale for your response.
One way to monitor a company is to break it into different centers or business units. For example, a Revenue Center oversees the sales teams while the Cost Center focuses on making the product or delivering the services. If the company maintains a store or locations that handles both revenue and costs, this is called a Profit Center. Managers of each center have their own budgets and are held accountable for achieving it. Analyze the most common responsibility reporting systems. From your analysis, argue at least one (1) pro and one (1) con of using responsibility reporting systems.
In: Accounting
An investor is planning to buy an asset which will cost ksh 8,000,000. The asset has a useful life of 10 years and will have a scrap value of 700,000 at the end of the tenth year. There is a 55% chance that the asset will bring in additional revenue of 15,000,000 per year and a 45% chance that the asset will bring in additional revenue of 5,000,000 per year for eight years and will incur additional costs of 900,000 per year for ten years. The machine will also require additional investment in working capital of 1,000,000 on installation. The tax rate is given as 30%. Assume that depreciation is at 20% per annum on a reducing balance method. The investors required rate of return is given as 10%:
Required
a) Determine cash flows from this project.
b) Determine the NPV of the project and give your comment.
In: Finance
Goodyear Tire and Rubber Company is the ninth largest tire manufacturer in the world. Here are the sales revenues for the past five years:
|
Year |
Revenue (millions) |
|
1 |
$4,877.9 |
|
2 |
5,065.4 |
|
3 |
5,525.6 |
|
4 |
5,729.8 |
|
5 |
5,499.7 |
a.When might a manager prefer linear trend/double exponential smoothing techniques to moving average/simple exponential smoothing techniques and why? (5 points)
b. Based on MAD for the last three years (years 3, 4, and 5), which method (linear-trend or double-exponential smoothing method with a = 0.4 and b = 0.2 (start with initial estimates S1 = $4,867.90 and T1 = $201.5 for year 1)) provides the better forecasts? Explain. Then, use your selected forecasting method, forecast the revenue for year 6 and year 7.
In: Operations Management
Bill has a small printing business. His accountant, Charles, asked Bill to come to his office to discuss his end of the year financial statements. Charles, knowing that Bill was having a difficult time operating the printing business, showed him his income statement. Revenue is up and so is his profit but cash flow is poor.
Bill exclaimed, "I made a net profit of $80,000 that I have to pay taxes on??? You are kidding right? There is no way!!! I don't have enough money in the bank this week to pay rent. How is this possible?????"
Pretend you are Charles (the accountant) and explain how it is possible for Bill's business to show a net profit with increased revenue but not have much money in the bank. Be very thorough with your answer. This happens quite often with small businesses.
In: Accounting
Silver Sun Aviation is considering a project that would last for 2 years and have a cost of capital of 17.06 percent. The relevant level of net working capital for the project is expected to be 16,000 dollars immediately (at year 0); 12,000 dollars in 1 year; and 0 dollars in 2 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, and 2 are presented in the following table (in dollars). The tax rate is 50 percent. What is the net present value of this project?
|
Year 0 |
Year 1 |
Year 2 |
|
|
Revenue |
$0 |
186,000 |
186,000 |
|
Costs |
$0 |
62,000 |
62,000 |
|
Depreciation |
$0 |
49,000 |
49,000 |
|
Cash flows from capital spending |
-100,000 |
0 |
16,000 |
there's a table with all the values above
In: Finance