Questions
1. Calculate the average return over the last 3 years. 2. Calculate the standard deviation of...

1. Calculate the average return over the last 3 years.

2. Calculate the standard deviation of your company’s returns over the last 3 years.

[I will make sure to give thumbs up to those who answer]

8/1/2016

100.975754

9/1/2016

108.172951

10/1/2016

108.6418

11/1/2016

105.752083

12/1/2016

111.392426

1/1/2017

116.711029

2/1/2017

131.753159

3/1/2017

138.767197

4/1/2017

138.757538

5/1/2017

147.557281

6/1/2017

139.689148

7/1/2017

144.257507

8/1/2017

159.068329

9/1/2017

150.072464

10/1/2017

164.600632

11/1/2017

167.336838

12/1/2017

165.378021

1/1/2018

163.618988

2/1/2018

174.065674

3/1/2018

164.629501

4/1/2018

162.15683

5/1/2018

183.361038

6/1/2018

182.334488

7/1/2018

187.436829

8/1/2018

224.21698

9/1/2018

223.135147

10/1/2018

216.334518

11/1/2018

176.519318

12/1/2018

156.463837

1/1/2019

165.093445

2/1/2019

171.749146

3/1/2019

189.221313

4/1/2019

199.900192

5/1/2019

174.398407

6/1/2019

197.919998

7/1/2019

203.300003

In: Finance

Required information Exercise 17-8 Liquidity analysis and interpretation LO P3 [The following information applies to the...

Required information

Exercise 17-8 Liquidity analysis and interpretation LO P3

[The following information applies to the questions displayed below.]

Simon Company’s year-end balance sheets follow.

At December 31 2017 2016 2015
Assets
Cash $ 25,420 $ 29,713 $ 30,952
Accounts receivable, net 89,900 62,900 55,300
Merchandise inventory 114,000 82,500 55,000
Prepaid expenses 8,186 7,800 3,439
Plant assets, net

197,691

 192,257 171,109
Total assets $ 435,197 $ 375,170 $ 315,800
Liabilities and Equity
Accounts payable $ 107,280 $ 62,770 $ 41,269
Long-term notes payable secured by
mortgages on plant assets		 80,999 85,426 69,094
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 84,418 64,474 42,937
Total liabilities and equity $ 435,197 $ 375,170 $ 315,800


The company’s income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:

For Year Ended December 31 2017 2016
Sales $ 565,756 $ 446,452
Cost of goods sold $ 345,111 $ 290,194
Other operating expenses 175,384 112,952
Interest expense 9,618 10,268
Income taxes 7,355 6,697
Total costs and expenses 537,468 420,111
Net income $ 28,288 $ 26,341
Earnings per share $ 1.74 $ 1.62

1. Compute days' sales uncollected

Days' Sales Uncollected
Choose Numerator: / Choose Denominator: x Days = Days' Sales Uncollected
Current assets / Current liabilities x = Days' Sales Uncollected
2017: / x = 0 days
2016: / x = 0 days

2. Compute accounts receivable turnover

Accounts Receivable Turnover
Choose Numerator: / Choose Denominator: = Accounts Receivable Turnover
Current assets / Current liabilities = Accounts receivable turnover
2017: / = 0 times
2016: / = 0 times

3. Compute inventory turnover

Inventory Turnover
Choose Numerator: / Choose Denominator: = Inventory Turnover
/ = Inventory turnover
2017: / = times
2016: / = times

4. Compute days' sales in inventory

Days’ Sales In Inventory
Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory
/ x = Days’ sales in inventory
2017: / x = days
2016: / x = days

In: Accounting

Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...

Common-Size Income Statements and Horizontal Analysis

Income statements for Mariners Corp. for the past two years are as follows:

(amounts in thousands
of dollars)
2017 2016
Sales revenue $60,000 $50,000
Cost of goods sold 42,000 30,000
   Gross profit $18,000 $20,000
Selling and administrative expense 9,000 5,000
   Operating income $9,000 $15,000
Interest expense 2,000 2,000
   Income before tax $7,000 $13,000
Income tax expense 2,000 4,000
   Net income $5,000 $9,000

Required:

1. Using the format in Example 13-5, prepare common-size comparative income statements for the two years for Mariners Corp. Round percentages to one decimal point.

Mariners Corp.
Common-Size Comparative Income Statements
For The Years Ended December 31, 2017 And 2016 (In Thousands of Dollars)
2017 Dollars 2017 Percent 2016 Dollars 2016 Percent
Sales revenue $ % $ %
Cost of goods sold
Gross profit $ % $ %
Selling and administrative expense
Operating income $ % $ %
Interest expense
Income before tax $ % $ %
Income tax expense
Net income $ % $ %

Feedback

Prepare in correct form common-size comparative income statements for two years. Set up with five columns.

2. Based on Mariner's common size statements in 2017 compared to 2016, it can be concluded that

all of these are true.

gross profit as a percentage of sales declined due to higher cost of goods sold.

net income decreased both in dollars and as a percentage of sales.

selling and administrative expenses increased both in dollars as well as percentage of sales.

a

Feedback

Correct

3. Using the format in Example 13-2, prepare comparative income statements for Mariners Corp., including columns for the dollars and for the percentage increase or decrease in each item on the statement. Round all percentages to the nearest whole percent. If an answer is zero, enter "0".

Mariners Corp.
Comparative Statements of Income
For The Years Ended December 31, 2017 And 2016
December 31, 2017 December 31, 2016 Increase/Decrease Dollars Increase/Decrease (Percent)
Sales revenue $ $ $ %
Cost of goods sold
Gross profit $ $ $
Selling and administrative expense
Operating income $ $ $
Interest expense
Income before tax $ $ $
Income tax expense
Net income $ $ $

In: Accounting

Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...

Common-Size Income Statements and Horizontal Analysis

Income statements for Mariners Corp. for the past two years are as follows:

(amounts in thousands
of dollars)
2017 2016
Sales revenue $60,000 $50,000
Cost of goods sold 42,000 30,000
   Gross profit $18,000 $20,000
Selling and administrative expense 9,000 5,000
   Operating income $9,000 $15,000
Interest expense 2,000 2,000
   Income before tax $7,000 $13,000
Income tax expense 2,000 4,000
   Net income $5,000 $9,000

Required:

1. Using the format in Example 13-5, prepare common-size comparative income statements for the two years for Mariners Corp. Round percentages to one decimal point.

Mariners Corp.
Common-Size Comparative Income Statements
For The Years Ended December 31, 2017 And 2016 (In Thousands of Dollars)
2017 Dollars 2017 Percent 2016 Dollars 2016 Percent
Sales revenue $ % $ %
Cost of goods sold
Gross profit $ % $ %
Selling and administrative expense
Operating income $ % $ %
Interest expense
Income before tax $ % $ %
Income tax expense
Net income $ % $ %

Feedback

Prepare in correct form common-size comparative income statements for two years. Set up with five columns.

2. Based on Mariner's common size statements in 2017 compared to 2016, it can be concluded that

all of these are true.

gross profit as a percentage of sales declined due to higher cost of goods sold.

net income decreased both in dollars and as a percentage of sales.

selling and administrative expenses increased both in dollars as well as percentage of sales.

a

Feedback

Correct

3. Using the format in Example 13-2, prepare comparative income statements for Mariners Corp., including columns for the dollars and for the percentage increase or decrease in each item on the statement. Round all percentages to the nearest whole percent. If an answer is zero, enter "0".

Mariners Corp.
Comparative Statements of Income
For The Years Ended December 31, 2017 And 2016
December 31, 2017 December 31, 2016 Increase/Decrease Dollars Increase/Decrease (Percent)
Sales revenue $ $ $ %
Cost of goods sold
Gross profit $ $ $
Selling and administrative expense
Operating income $ $ $
Interest expense
Income before tax $ $ $
Income tax expense
Net income $ $

In: Accounting

Smart Hardware purchased new shelving for its store on April 1, 2013. The shelving is expected...

Smart Hardware purchased new shelving for its store on April 1, 2013. The shelving is expected to have a 20-year life and no residual value. Smart Hardware adopts the cost model as its accounting policy in subsequently measuring its property, plant, and equipment. The following expenditures were associated with the purchase:

  

  Cost of the shelving $ 120,000  
  Freight charges 5,200
  Sales taxes 7,800
  Installation of shelving 27,000
  Cost to repair shelf damaged during installation 4,000

    

a-1.

Compute depreciation expense for the years 2013 through 2016, using the straight-line method with fractional years rounded to the nearest whole month. (Omit the "$" sign in your response.)

  

Year Depreciation expense
2013 $   
2014   
2015   
2016   

   

a-2.

Compute depreciation expense for the years 2013 through 2016, using the 200 percent declining-balance, using the half-year convention. (Omit the "$" sign in your response.)

  

Year Depreciation expense
2013 $   
2014   
2015   
2016   

  

a-3.

Compute depreciation expense for the years 2013 through 2016, using the 150 percent declining-balance, using the half-year convention. (Omit the "$" sign in your response.)

  

Year Depreciation expense
2013 $   
2014   
2015   
2016   

  

c-1.

Which of the depreciation methods applied in part a resulted in the lowest reported book value at the end of 2016?
(Click to select)

  

c-2.

Is book value an estimate of an asset’s fair value?
(Click to select)Yes or No
d-1.

Assume that Smart Hardware sold the old shelving that was being replaced. The old shelving had originally cost $90,000. Its book value at the time of the sale was $4000. Record the sale of the old shelving was sold for $12,000 cash. (Omit the "$" sign in your response.)
General Journal Debit Credit
  (Click to select)    
  (Click to select)    
       (Click to select)    
       (Click to select)    
d-2.

Assume that Smart Hardware sold the old shelving that was being replaced. The old shelving had originally cost $90,000. Its book value at the time of the sale was $4000. Record the sale of the old shelving was sold for $2,000 cash. (Omit the "$" sign in your response.)

  

General Journal Debit Credit
  (Click to select)    
  (Click to select)    
  (Click to select)    
       (Click to select)    

In: Accounting

American customer satisfaction index: Starbucks in the U.S. 2006-2016 2006 77 2007 78 2008 77 2009...

American customer satisfaction index: Starbucks in the U.S. 2006-2016

2006

77

2007

78

2008

77

2009

76

2010

78

2011

80

2012

76

2013

80

2014

76

2015

74

2016

75

ABOUT THIS STATISTIC: This statistic shows the American customer satisfaction index scores of Starbucks in the United States from 2006 to 2016. Starbucks had an ACSI score of 75 in 2016.

Starbucks

The Starbucks Corporation is a coffeehouse chain based in Seattle which operates more than 25 thousand stores worldwide (as of 2016). Just over 50 percent (around 7,880) of all Starbucks stores were company-operated stores, from which Starbucks generates around 79 percent of its revenue. Around 5,292 stores are licensed stores. Starbucks, which became a publicly traded company on June 26, 1992, generated around 21.32 billion U.S. dollars in revenue in the 2016 fiscal year.

In its company-operated stores Starbucks generates 74 percent of revenue from the sale of beverages, 19 percent from food sales and three percent from the sale of packaged and single serve coffees. Another four percent of retail sales are attributable to coffee-making equipment and other merchandise.

The United States is Starbucks’ biggest and most important market. In 2016, revenues from Starbucks Americas segment amounted to more than 14 billion U.S. dollars. The

Americas segment comprises over 13,000 stores in the U.S., Canada, Mexico, Puerto Rico, Brazil Chile and other American countries with around 86 percent of those stores located in the United States. 2

  1. Plot this set of data as a scatterplot in excel. Insert excel graph here:
  1. Find the correlation coefficient.
  2. Is it positive or negative?
  3. What does the sign tell us?
  4. What does the correlation imply about the relationship between the time and the satisfaction?
  1. Is the correlation significant? Why or why not? (Answer in 1-2 complete sentences.) (Use the Pearson calculator).

20) Draw the trendline in excel. Can the regression line be used for prediction? No, it is too weak. Insert excel graph here:

In: Statistics and Probability

Required information Exercise 13-8 Liquidity analysis and interpretation LO P3 [The following information applies to the...

Required information

Exercise 13-8 Liquidity analysis and interpretation LO P3

[The following information applies to the questions displayed below.]

Simon Company’s year-end balance sheets follow.

At December 31 2017 2016 2015
Assets
Cash $ 26,619 $ 31,115 $ 32,412
Accounts receivable, net 89,000 62,100 53,200
Merchandise inventory 114,500 83,000 57,000
Prepaid expenses 8,572 8,168 3,601
Plant assets, net

217,041

 208,489 184,487
Total assets $ 455,732 $ 392,872 $ 330,700
Liabilities and Equity
Accounts payable $ 112,342 $ 65,731 $ 43,216
Long-term notes payable secured by
mortgages on plant assets		 84,821 89,457 72,354
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 96,069 75,184 52,630
Total liabilities and equity $ 455,732 $ 392,872 $ 330,700


The company’s income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:

For Year Ended December 31 2017 2016
Sales $ 592,452 $ 467,518
Cost of goods sold $ 361,396 $ 303,887
Other operating expenses 183,660 118,282
Interest expense 10,072 10,753
Income taxes 7,702 7,013
Total costs and expenses 562,830 439,935
Net income $ 29,622 $ 27,583
Earnings per share $ 1.82 $ 1.70

(1) Compute days' sales uncollected.

Days' Sales Uncollected
Choose Numerator: / Choose Denominator: x Days = Days' Sales Uncollected
/ x = Days' Sales Uncollected
2017: / x = 0 days
2016: / x = 0 days

(2) Compute accounts receivable turnover.

Accounts Receivable Turnover
Choose Numerator: / Choose Denominator: = Accounts Receivable Turnover
/ = Accounts receivable turnover
2017: / = times
2016: / = times

(3) Compute inventory turnover.

Inventory Turnover
Choose Numerator: / Choose Denominator: = Inventory Turnover
/ = Inventory turnover
2017: / = times
2016: / = times

(4) Compute days' sales in inventory.

Days’ Sales In Inventory
Choose Numerator: / Choose Denominator: x Days = Days’ Sales In Inventory
/ x = Days’ sales in inventory
2017: / x = 0 days
2016: / x = 0 days

In: Finance

Amortization and Impairment Testing of Identifiable Intangible Assets During the year ended July 30, 2016, Cisco...

Amortization and Impairment Testing of Identifiable Intangible Assets

During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands):

Limited Lives Indefinite Lives
Technology Customer Relationships IPR&D

Acquired Company

(in thousands)

 Useful life
(in years)		 Amount Useful life
(in years)		 Amount Amount
Lancope, Inc 5 $79,000 6 $29,000 $121,000
Jasper Technologies, Inc 6 240,000 7 75,000 23,000


Cisco acquired Lancope, Inc. in December 2015, and Jasper Technologies, Inc. in March 2016. Cisco separately tests identifiable intangibles acquired from each company for impairment, and collects the following information to conduct impairment tests at the end of fiscal 2016 (in thousands):

Technology Customer Relationships IPR&D

Acquired Company

(in thousands)

 Sum of
expected
undiscounted
cash flows		 Sum of
expected
discounted
cash flows		 Sum of
expected
undiscounted
cash flows		 Sum of
expected
discounted
cash flows		 Sum of
expected
undiscounted
cash flows		 Sum of
expected
discounted
cash flows
Lancope, Inc $70,000 $65,000 $25,000 $20,000 $130,000 $105,000
Jasper Technologies, Inc 200,000 150,000 80,000 65,000 30,000 26,000

Required

a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition.

  • Round answers to the nearest whole number.
  • Enter answers in thousands.
Acquired Company Technology Customer
Relationships
Lancope, Inc. $Answer $Answer
Jasper Technologies, Inc. Answer Answer

b. Calculate impairment losses for fiscal 2016.

  • Round answers to the nearest whole number.
  • Enter answers in thousands.
Acquired Company Technology Customer
Relationships		 IPR&D
Lancope, Inc. $Answer $Answer $Answer
Jasper Technologies, Inc. Answer Answer Answer

c. Determine the amounts reported on Cisco’s fiscal 2016 balance sheet for technology, customer relationships, and in-process R&D.

  • Round answers to the nearest whole number.
  • Enter answers in thousands.
Amounts reported on Cisco's fiscal 2016 balance sheet
Technology $Answer
Customer Relationships Answer
IPR&D Answer

In: Accounting

Amortization and Impairment Testing of Identifiable Intangible Assets During the year ended July 30, 2016, Cisco...

Amortization and Impairment Testing of Identifiable Intangible Assets

During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands):

Limited Lives Indefinite Lives
Technology Customer Relationships IPR&D

Acquired Company

(in thousands)

 Useful life
(in years)		 Amount Useful life
(in years)		 Amount Amount
Lancope, Inc 5 $79,000 6 $29,000 $121,000
Jasper Technologies, Inc 6 240,000 7 75,000 23,000


Cisco acquired Lancope, Inc. in December 2015, and Jasper Technologies, Inc. in March 2016. Cisco separately tests identifiable intangibles acquired from each company for impairment, and collects the following information to conduct impairment tests at the end of fiscal 2016 (in thousands):

Technology Customer Relationships IPR&D

Acquired Company

(in thousands)

 Sum of
expected
undiscounted
cash flows		 Sum of
expected
discounted
cash flows		 Sum of
expected
undiscounted
cash flows		 Sum of
expected
discounted
cash flows		 Sum of
expected
undiscounted
cash flows		 Sum of
expected
discounted
cash flows
Lancope, Inc $70,000 $65,000 $25,000 $20,000 $130,000 $105,000
Jasper Technologies, Inc 200,000 150,000 80,000 65,000 30,000 26,000

Required

a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition.

  • Round answers to the nearest whole number.
  • Enter answers in thousands.
Acquired Company Technology Customer
Relationships
Lancope, Inc. $Answer $Answer
Jasper Technologies, Inc. Answer Answer

b. Calculate impairment losses for fiscal 2016.

  • Round answers to the nearest whole number.
  • Enter answers in thousands.
Acquired Company Technology Customer
Relationships		 IPR&D
Lancope, Inc. $Answer $Answer $Answer
Jasper Technologies, Inc. Answer Answer Answer

c. Determine the amounts reported on Cisco’s fiscal 2016 balance sheet for technology, customer relationships, and in-process R&D.

  • Round answers to the nearest whole number.
  • Enter answers in thousands.
Amounts reported on Cisco's fiscal 2016 balance sheet
Technology $Answer
Customer Relationships Answer
IPR&D Answer

In: Accounting

Described below are six independent and unrelated situations involving accounting changes. Each change occurs during 2016...

Described below are six independent and unrelated situations involving accounting changes. Each change occurs during 2016 before any adjusting entries or closing entries were prepared. Assume the tax rate for each company is 40% in all years. Any tax effects should be adjusted through the deferred tax liability account.
a.

Fleming Home Products introduced a new line of commercial awnings in 2015 that carry a one-year warranty against manufacturer’s defects. Based on industry experience, warranty costs were expected to approximate 3% of sales. Sales of the awnings in 2015 were $4,400,000. Accordingly, warranty expense and a warranty liability of $132,000 were recorded in 2015. In late 2016, the company’s claims experience was evaluated and it was determined that claims were far fewer than expected: 2% of sales rather than 3%. Sales of the awnings in 2016 were $4,900,000 and warranty expenditures in 2016 totaled $111,475.
b.

On December 30, 2012, Rival Industries acquired its office building at a cost of $1,180,000. It was depreciated on a straight-line basis assuming a useful life of 40 years and no salvage value. However, plans were finalized in 2016 to relocate the company headquarters at the end of 2020. The vacated office building will have a salvage value at that time of $790,000.
c.

Hobbs-Barto Merchandising, Inc., changed inventory cost methods to LIFO from FIFO at the end of 2016 for both financial statement and income tax purposes. Under FIFO, the inventory at January 1, 2016, is $780,000.
d.

At the beginning of 2013, the Hoffman Group purchased office equipment at a cost of $429,000. Its useful life was estimated to be 10 years with no salvage value. The equipment was depreciated by the sum-of-the-years’-digits method. On January 1, 2016, the company changed to the straight-line method.
e.

In November 2014, the State of Minnesota filed suit against Huggins Manufacturing Company, seeking penalties for violations of clean air laws. When the financial statements were issued in 2015, Huggins had not reached a settlement with state authorities, but legal counsel advised Huggins that it was probable the company would have to pay $290,000 in penalties. Accordingly, the following entry was recorded:


  Loss—litigation 290,000
       Liability—litigation 290,000


     Late in 2016, a settlement was reached with state authorities to pay a total of $449,000 in penalties.
f.

At the beginning of 2016, Jantzen Specialties, which uses the sum-of-the-years’-digits method, changed to the straight-line method for newly acquired buildings and equipment. The change increased current year net earnings by $544,000.

Prepare any journal entry necessary as a direct result of the change as well as any adjusting entry for 2016 related to the situation described. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1

Record journal entry as a direct result of the change.

2

Record adjusting entry for change in warranty.

3

Record journal entry as a direct result of the change.

4

Record adjusting entry for depreciation.

5

Record journal entry as a direct result of the change.

6

Record the adjusting entry for change in inventory cost method.

7

Record journal entry as a direct result of the change.

8

Record adjusting entry for depreciation.

9

Record journal entry as a direct result of the change.

10

Record the adjusting entry for revision of liability.

11

Record journal entry as a direct result of the change.

12

Record the adjusting entry for change in depreciation method from sum-of-the-years’-digits method to straight-line method.

In: Accounting