Company 1:
| Industry Median | 2020 | 2019 | 2018 | 2017 | 2016 | |
| Profitability | ||||||
| Gross Margin | 39.2% | 29.8% | 29.3% | 29.7% | 30.1% | 29.5% |
| EBITDA Margin | 9.5% | 9.3% | 8.9% | 9.3% | 10.3% | 9.7% |
| Operating Margin | 6.1% | 6.0% | 5.5% | 5.6% | 6.3% | 7.5% |
| Pretax Margin | 5.4% | 5.4% | 4.9% | 5.0% | 5.6% | 6.7% |
| Effective Tax Rate | 23.3% | 22.0% | 21.3% | 29.3% | 32.7% | 32.5% |
| Net Margin | 4.2% | 4.2% | 3.8% | 3.5% | 3.8% | 4.5% |
Company 2:
| Industry Median | 2020 | 2019 | 2018 | 2017 | 2016 | |
| Profitability | ||||||
| Gross Margin | 21.3% | 22.1% | 21.7% | 22.0% | 22.4% | 22.2% |
| EBITDA Margin | 4.9% | 4.1% | 4.2% | 4.2% | 5.0% | 5.2% |
| Operating Margin | 3.2% | 2.0% | 3.6% | 2.1% | 3.0% | 3.3% |
| Pretax Margin | 2.4% | 1.6% | 3.3% | 1.2% | 2.5% | 2.8% |
| Effective Tax Rate | 23.6% | 23.7% | 22.6% | 34.8% | 32.8% | 33.8% |
| Net Margin | 1.5% | 1.2% | 2.5% | 0.8% | 1.7% | 1.9% |
Please discuss the profitability aspects for both companies and decide which company do you think perform better. The discussion should include, but not exhaustive to trend, prospect, competitive structure etc.
In: Finance
The balance sheets for Plasma Screens Corporation, along with additional information, are provided below: PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 155,100 $ 171,800 Accounts receivable 74,800 88,000 Inventory 87,000 72,800 Prepaid rent 2,400 1,200 Long-term assets: Land 440,000 440,000 Equipment 732,000 630,000 Accumulated depreciation (406,000 ) (252,000 ) Total assets $ 1,085,300 $ 1,151,800 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 91,000 $ 77,800 Interest payable 6,900 13,800 Income tax payable 6,400 4,200 Long-term liabilities: Notes payable 115,000 230,000 Stockholders' equity: Common stock 660,000 660,000 Retained earnings 206,000 166,000 Total liabilities and stockholders' equity $ 1,085,300 $ 1,151,800 Additional Information for 2021: Net income is $61,000. The company purchases $102,000 in equipment. Depreciation expense is $154,000. The company repays $115,000 in notes payable. The company declares and pays a cash dividend of $21,000. Required: Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.
In: Accounting
The balance sheets for Plasma Screens Corporation, along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 107,800 | $ | 118,100 | ||||
| Accounts receivable | 80,000 | 94,500 | ||||||
| Inventory | 100,000 | 84,500 | ||||||
| Prepaid rent | 5,000 | 2,500 | ||||||
| Long-term assets: | ||||||||
| Land | 505,000 | 505,000 | ||||||
| Equipment | 810,000 | 695,000 | ||||||
| Accumulated depreciation | (433,000 | ) | (278,000 | ) | ||||
| Total assets | $ | 1,174,800 | $ | 1,221,600 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 104,000 | $ | 89,500 | ||||
| Interest payable | 6,300 | 12,600 | ||||||
| Income tax payable | 9,000 | 5,500 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable | 105,000 | 210,000 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 725,000 | 725,000 | ||||||
| Retained earnings | 225,500 | 179,000 | ||||||
| Total liabilities and stockholders' equity | $ | 1,174,800 | $ | 1,221,600 | ||||
Additional Information for 2021:
Required:
Prepare the statement of cash flows using the indirect method.
(List cash outflows and any decrease in cash as negative
amounts.)
In: Finance
The term clientele effect refers to the tendency of firms to attract investors who like their dividend policies. Three potential investors are described in the table.
Indicate which type of firms they are most likely to be attracted to.
| Potential Investors | Types of Firms |
|---|---|
| Stockholders in their peak earning years | (high dividend payout, low dividend payout) |
| Investors who have a preference for current investment income | (high dividend payout, low dividend payout) |
| Retired individuals, pension funds, and university endowment funds | (high dividend payout, low dividend payout) |
Defense Dynamics Co. is a typical company that is very concerned with meeting investors’ expectations and keeping investors happy. Its earnings tend to fluctuate from year to year because of the nature of the business the company is in. Which of these statements most likely describes Defense Dynamics Co.’s dividend policy?
Defense Dynamics Co. will be willing to increase its dividend only if it believes that it will be able to maintain the dividend increase in future years.
Defense Dynamics Co. will increase its dividends in years when it has high earnings so that it can distribute excess free cash flows to investors, even if it means that the firm will have to reduce its dividend in subsequent years.
In: Finance
According to Rescorla-Wagner, combining two or more conditioned stimuli with a single US:
A. Strengthens the association between both of the CS and the US
B. Blocks the association between both of the CS and the US
C. Blocks the association between one of the CS and the US
D. Weakens the association between both CS and the US
In: Psychology
In: Accounting
Arroyo Company issued $600,000, 10-year, 6% bonds at 103.
Instructions
(a)
Prepare the journal entry to record the sale of these bonds on January 1, 2017.
(b)
Suppose the remaining Premium on Bonds Payable was $10,800 on December 31, 2020. Show the balance sheet presentation on this date.
(c)
Explain why the bonds sold at a price above the face amount.
In: Accounting
E11.24 (LO5) (Revaluation Accounting) Croatia Company purchased land in
2019 for $300,000. The land
'
s fair value at the end of 2019 is $320,000; at
the end of 2020, $280,000; and at the end of 2021, $305,000. Assume that
Croatia chooses to use revaluation accounting to account for its land.
Instructions
Prepare the journal entries to record the land using revaluation accounting for
2019
–
2021.
In: Accounting
Exercise 2: Inventory-Related Calculations in a Periodic System
The Travalent Company uses the periodic inventory system. The following information is taken from their records. Certain data have been intentionally omitted.
Required: Compute the missing numbers.
|
2018 |
2019 |
2020 |
|
|
Sales |
$4,000 |
$4,200 |
|
|
Sales Discounts |
(20) |
(25) |
(30) |
|
Sales Returns |
(10) |
(20) |
(15) |
|
Net Sales |
|||
|
Beginning Inventory |
1,000 |
1,345 |
|
|
Purchases |
3,000 |
2,700 |
|
|
Freight-In |
150 |
200 |
250 |
|
Purchase Returns |
(200) |
(250) |
(200) |
|
Purchase Discounts |
(100) |
(150) |
|
|
Net Purchases |
3,000 |
||
|
Cost of Goods Available for Sale |
3,800 |
||
|
Ending Inventory |
1,200 |
||
|
Cost of Goods Sold |
2,600 |
||
|
Gross Profit |
1,300 |
1,350 |
In: Accounting
#1. ALLOWANCE METHOD
The balance sheet of Starsky Company at December 31, 2019, includes the following:
Accounts receivable $ 182,100
Less: Allowance for doubtful accounts 17,300
= $164,800
Transactions in 2020 include the following:
1. Accounts receivable of $78,000 were collected
2. Accounts receivable of $60,000 were collected, in which 2% sales discounts were granted.
3. A $5,300 customer account that was written off the books as worthless in 2019 was reinstated.
4. The $5,300 was received from the customer.
5. Customer accounts of $17,500 were written off during the year.
6. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.
Instructions: Journalize the above transactions.
In: Accounting