Revenue is recognized when shipped. Based on shipping dates, total revenue for 2018 is $1,372,637. The audit team has set overall materiality at $13,000.
The total dollar volume of AR that was not approved was $13,726.
Would you classify the authorization control deficiency identified above as material weakness, control deficiency or significant deficiency?
In: Accounting
In Enron's bankruptcy, "Revenue Recognition" was one of the major issues. First, summarize the revenue recognition issue in Enron Bankruptcy. Second, as an auditor, what type of evidence would you want to examine to determine whether Enron was inappropriately recording revenue from the Sithe Energies contract?
In: Accounting
The revenue recognition model promises to provide a coherent and consistent revenue recognition framework for all companies to follow. Do you agree? Explain. (hint: you may wish to discuss the advantages and disadvantages of the model)
In: Accounting
Starting with your identified 2019 level of revenue, you expect that revenue will increase by 10% in 2020. You anticipate annual revenue growth will slow by 1% per year to the long-run industry growth rate of 5% by 2025. • You expect EBIT to be 12.5% of sales each year. • You expect any increase in net working capital requirements each year to be 10% of any year-on-year annual increases in revenue. • You expect capital expenditures to equal depreciation expenses in each year. • Nike’s Tax rate is 20%. • Nike’s weighted average cost of capital (WACC) is 9%.
Case 1 - Suppose you believe Nike's initial revenue growth rate in 2020 will be between 8% and 14% (with growth slowing linearly to 5% by year 2025). What range of prices for Nike stock is consistent with these forecasts? Case 2 – Beginning again with your base case assumptions, suppose you believe Nike's initial EBIT margin (as a % of revenue) will be between 9% and 14% of revenue. What range of prices for Nike stock is consistent with these forecasts? Case 3 – Beginning again with your base case assumptions, you observe that similar companies in the apparel industry have WACCs ranging from 7.5% to 10%. What range of prices for Nike stock is consistent with these forecasts? Case 4 - What range of stock prices is consistent if you vary the estimates in cases 1 – 3 simultaneously? Put another way, what is the range of stock prices you might expect if the worst/best case scenarios occur from each of the previous three cases simultaneously.
7) Determine a terminal value for Nike’s FCF from 2026 and beyond (value expressed in millions of 2025 dollars).
The terminal value, in 2025 dollars, of Nike's free cash flows from 2026 onward is:____ million dollars. (please round your answer to ONE decimal point)
8) Determine Nike’s Enterprise Value (as of the end of FY2019)
Nike's Enterprise Value, as of the end of FY2019, is: $____million dollars. (please round your answer to ONE decimal place)
In: Finance
In: Finance
Pina Colada Corporation had net sales revenue of $5,860,000 and investment revenue of $220,000 for the year ended December 31, 2020. Other items pertaining to 2020 were as follows:
| Cost of goods sold | $4,610,000 | ||
| Salaries and wages expense (sales) | 450,000 | ||
| Advertising expense | 122,000 | ||
| Entertainment expense | 81,000 | ||
| Selling expenses | 653,000 | ||
| Salaries and wages expense (administrative) | 297,000 | ||
| Rent expense | 100,000 | ||
| Utilities expense | 45,000 | ||
| Administrative expenses | 442,000 | ||
| Increase in value of company reputation | 70,000 | ||
| Unrealized gain on value of patents | 35,000 | ||
| Interest expense | 153,000 | ||
| Income tax expense | 87,000 |
Pina Colada has 100,000 common shares outstanding throughout the
year.
Prepare a multiple-step income statement for Pina Colada Corporation, showing expenses by function. Include calculation of EPS. (Round per share answer to 2 decimal places, e.g. 52.75.)
|
Pina Colada Corporation Income Statement For the Year Ended December 31, 2020December 31, 2020 |
||||
|---|---|---|---|---|
| $enter a dollar amount | ||||
| enter a dollar amount | ||||
| enter a total amount for the first part | ||||
| $enter a dollar amount | ||||
| enter a dollar amount | ||||
| enter a subtotal of the two previous amounts | ||||
| enter a total amount for the second part | ||||
|
enter an income statement item |
enter a dollar amount | |||
| enter a subtotal of the two previous amounts | ||||
| enter a dollar amount | ||||
| enter a total amount for all three parts | ||||
| enter a dollar amount | ||||
| $enter a total net income or loss amount | ||||
| $enter a dollar amount | ||||
In: Accounting
Monopoly Discussion Total Revenue and Elasticity:
The total revenue test shows that the monopolist will avoid
the inelastic segment of its demand schedule. As long as demand is
elastic, total revenue will rise when the monopoly lowers its
price, but this will not be true when demand becomes
inelastic.
In: Economics
In: Accounting
revenue and collection cycle. Explain what the revenue and collection cycle is in your own words and describe two audit procedures you would do if you were auditing an organization and why you would do those procedures.
In: Accounting
is net sales= net revenue? term sales and revenue are same? is Net sales and cost of goods sold same?
In: Accounting