Changes in Various Ratios Presented below is selected information for Turner Company:

2019 2018

Sales revenue $950,000 $850,000

Cost of goods sold 575,000 545,000

Interest expense 20,000 20,000

Income tax expense 27,000 30,000

Net income 65,000 55,000

Cash flow from operating activities 70,000 60,000

Capital expenditures 45,000 45,000

Accounts receivable (net), December 31 126,000 120,000

Inventory, December 31 196,000 160,000

Stockholders’ equity, December 31 450,000 400,000

Total assets, December 31 750,000 675,000

Required Calculate the following ratios for 2019. The 2018 results are given for comparative purposes. Round answers to one decimal place. Use 365 days in a year.

2018 2019  

1. Gross profit percentage 35.9% % blank

2. Return on assets 8.3% % blank

3. Return on sales 6.5% % blank

4. Return on common stockholders’ equity (no preferred stock was outstanding) 13.9% % blank

5. Accounts receivable turnover 8.0 blank

6. Average collection period 45.6 days blank days

7. Inventory turnover 3.6 blank

8. Times-interest-earned ratio 5.3 blank

9. Operating-cash-flow-to-capital-expenditures ratio 1.3 blank

Changes in Various Ratios
Presented below is selected information for Brimmer Company:

Required
Calculate the following ratios for 2013. The 2012 results are given for comparative purposes.

Round answers to one decimal place. Use 365 days in a year.

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You are a recently designated accountant. As a result of having your designation, you have been hired as the controller at a national manufacturing company. Due to a recent economic slowdown, the company has been struggling to meet earnings targets. These targets are the basis for senior management bonuses. You report directly to the CFO.

This is your second month with the company; however, it is your first year end (December 31). The auditor will be coming to audit the books in three weeks. You have fi nalized the fi nancial statements, and
you have reviewed them with the CFO and the CEO.

The week before the auditor is expected to arrive, the CFO comes to your office and explains that the financial results are very disappointing. He explains that: on December 31, a sales contract was signed for $500,000 of goods with delivery to take place January 3. He asks you to record the revenue for this contract on December 31, the date the contract is signed and before the work is performed. This will result in early revenue recognition, and doing so will eliminate the overall net loss for the year.

You are married with a stay-at-home spouse and two small children. To celebrate your success, you recently purchased a new home. It cost a little more than you planned to spend and the mortgage payments are pretty expensive.

What would you do? What are the ethical issues you would need to consider?

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Fixed Component per Month Variable Component per Job Actual Total for February Revenue $ 277 $ 36,030 Technician wages $ 8,500 $ 8,350 Mobile lab operating expenses $ 4,700 $ 31 $ 8,880 Office expenses $ 2,700 $ 3 $ 2,970 Advertising expenses $ 1,560 $ 1,630 Insurance $ 2,860 $ 2,860 Miscellaneous expenses $ 950 $ 1 $ 395 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,700 plus $31 per job, and the actual mobile lab operating expenses for February were $8,880. The company expected to work 140 jobs in February, but actually worked 144 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) This is the last question in the assignment. To submit, use Alt + S. To access other questions, proceed to the question map button.Next Visit question mapQuestion 8 of 8 Total

With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for small, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies.

Health Insurance

Size of Company yes no total

Small 35   15 50

Medium 67 8 75

Large 87 13 100

a.) Conduct a test of independence to determine whether employee health insurance coverage is independent of the size of the company. Use  = .05. Compute the value of the test statistic (to 2 decimals).

b.) the p-value is _____________

c.) What is your conclusion _________________

d.) The USA Today article indicated employees of small companies are more likely to lack health insurance coverage. Calculate the percentages of employees without health insurance based on company size (to the nearest whole number).

Small _____ %

Medium ______ %

Large ______ %

Based on the percentages above what do you conclude ___________________

With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for small, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies.

Health Insurance Size of Company Yes No Total Small 32 18 50 Medium 61 14 75 Large 87 13 100

a) Conduct a test of independence to determine whether employee health insurance coverage is independent of the size of the company. Use = .05. Use Table 12.4.

Compute the value of the 2 test statistic (to 2 decimals). The p value is What is your conclusion?

b) The USA Today article indicated employees of small companies are more likely to lack health insurance coverage. Calculate the percentages of employees without health insurance based on company size (to the nearest whole number).

Small % Medium % Large %

Based on the percentages calculated above, what can you conclude?

With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for small, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies. Health Insurance Size of Company Yes No Total Small 31 19 50 Medium 68 7 75 Large 90 10 100 Conduct a test of independence to determine whether employee health insurance coverage is independent of the size of the company. Use = .05. Use Table 12.4. Compute the value of the 2 test statistic (to 2 decimals). The p value is What is your conclusion? The USA Today article indicated employees of small companies are more likely to lack health insurance coverage. Calculate the percentages of employees without health insurance based on company size (to the nearest whole number). Small % Medium % Large % Based on the percentages calculated above, what can you conclude?

With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for small, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies.

Conduct a test of independence to determine whether employee health insurance coverage is independent of the size of the company. Use a = .05.

Compute the value of the x² test statistic (to 2 decimals).

Find the p-value

What is your conclusion?

The USA Today article indicated employees of small companies are more likely to lack health insurance coverage. Calculate the percentages of employees without health insurance based on company size (to the nearest whole number).
Small:

Medium:

Large:

Based on the percentages calculated above, what can you conclude?