Top executive officers of Vernon Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement.

  
Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $77,000. The president has announced that the company’s goal is to increase net income by 15 percent.

Required

The following items are independent of each other.

1. Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal?

2. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 1 percent. Prepare a pro forma income statement still assuming the President's goal to increase net income by 15 percent. Calculate the required reduction in selling & administrative expenses to achieve the budgeted net income.

3. The company decides to escalate its advertising campaign to boost consumer recognition, which will increase selling and administrative expenses to $341,000. With the increased advertising, the company expects sales revenue to increase by 15 percent. Assume that cost of goods sold remains a constant proportion of sales. Prepare a pro forma income statement. Will the company reach its goal?

Interpreting the Accounts Receivable Footnote
Hewlett-Packard Company reports the following in its 2015 10-K report.

Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts.

(a) What is the gross amount of accounts receivables for Hewlett-Packard in fiscal 2015 and 2014?

(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2015 and 2014? (Round your answers to two decimal places.)

(c)What amount of bad debts expense did Hewlett-Packard report each year 2013 through 2015 (ignore increase in allowance from acquisitions)? What amount was actually written off?

Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?

Generally, HP has overestimated its accruals, which has deflated profit by the over-accrual of bad debts.

Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts.

The difference between bad debt expense and write-off during the three years is insignificant so it appears that profit has been fairly stated.

The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported.

(d)Compute Hewlett-Packard's write-offs as a percentage of the allowance account at the beginning of the year.
(Round your answers to two decimal places)
2015 write-offs as a percentage of beginning of year allowance: Answer%
2014 write-offs as a percentage of beginning of year allowance: Answer%
What inferences can we draw as a result of changes in the allowance for doubtful accounts from 2014 to 2015?

The allowance for uncollectible accounts has increased as a percentage of gross accounts receivable in 2015. We can , therefore, expect write-offs to increase.

HPQ's write-offs as a percentage of the allowance decreased from 2014-2015. By this measure it appears that HPQ is accurately accruing for anticipated credit losses.

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2015. This means that HPQ is over-stating its bad debt expense in the current year.

HPQ's write-offs as a percentage of the allowance increase from 2014 to 2015. This may imply that the allowance is too small.

Under ordinary circumstances: For all babies born in the entire global population, the proportion of male births tends to be consistently a bit higher, than the proportion of female births (Source: WHO - World Health Organization).

In fact: For a randomly sampled individual birth from the global population, the probability that the baby's sex will be male is approximately 51.2%.

Imagine that we will randomly record the sex outcome at birth for 1000 future individual babies from the global population.

We will let random variable X stand for the total number of male births in our sample.

[Note: This problem takes place within the Binomial Setting, and thus we model it using a Binomial Distribution.]

A.) What is the approximate value of P(X≥542) ?

Write your answer as a percentage value, and round to two digits after the decimal point. Include a percent symbol after your answer (no spaces).

B.) A famous mathematical theorem states that the Binomial Distribution in this problem, will be well-approximated by a ___________Distribution.

What single-word, formal distribution name correctly fills-in the blank in this last sentence?

A researcher wonders if the currently-believed global male-births proportion value of approximately p = 51.2% is still correct.

The researcher decides to perform a two-sided significance test, and in advance, chooses a significance-level of 1%.

The researcher then randomly samples the reported birth-sex information for 1000 recent global births, and finds that exactly 551 of these babies were reported to be males.

A.) In percentage form, and rounded to three digits past the decimal point: What is the approximate P-value of this test?

Include a percentage symbol at the end of your numerical answer (with no spaces).

Recall from the previous problems:

In order to study the global proportion of male baby births, a researcher randomly sampled the reported birth-sex information for 1000 recent global births. The researcher found that exactly 551 of these babies were reported to be males.

Using this same sample data, the researcher now decides to build a 99%-level confidence interval for estimating the current true global proportion of male baby births.

In percentage form, and rounded to two digits past the decimal point: What is the approximate value of the Lower Limit of this confidence interval?

A.) Include a percentage symbol at the end of your numerical answer (with no spaces).

B.) In percentage form, and rounded to two digits past the decimal point: What is the approximate value of the Upper Limit of this confidence interval?

Include a percentage symbol at the end of your numerical answer (with no spaces).

C.) In percentage form, and rounded to two digits past the decimal point: What is the approximate value of the Margin of Error for this confidence interval?

Include a percentage symbol at the end of your numerical answer (with no spaces).

C.) Suppose the researcher now wishes that they had instead built a confidence interval still having this same 99% confidence level, but with a margin of error no greater than 1%.

To achieve these new specifications: The researcher intends in the future, to draw a completely new random sample of reported birth-sex information for recent global births.

D.) What minimum sample size will the researcher need to draw, in order to achieve these new confidence interval specifications?

(Note: Your answer should be a whole number here. Do not include any commas in the number.)

Hewlett-Packard Company (HPQ) reports the following in its 2007 10-K report.

HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts.

(a) What is the gross amount of accounts receivables for HPQ in fiscal 2007 and 2006?

(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2007 and 2006? (Round your answers to two decimal places.)

(c)What amount of bad debts expense did HPQ report each year 2005 through 2007? What amount was actually written off?

Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?

Generally, HP has overestimated its accruals, which has deflated profit by the over-accrual of bad debts.

Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts.

The difference between bad debt expense and write-off during the three years is insignificant so it appears that profit has been fairly stated.

The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported.

(d)Compute HPQ's write-offs as a percentage of the allowance account at the beginning of the year (Round your answers to two decimal places).
2007 write-offs as a percentage of beginning of year allowance: Answer%
2006 write-offs as a percentage of beginning of year allowance: Answer%
What inferences can we draw as a result of changes in the allowance for doubtful accounts from 2006 to 2007?

HPQ's write-offs as a percentage of the allowance decreased from 2006-2007. By this measure it appears that HPQ is accurately accruing for anticipated credit losses.

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2007. We can , therefore, expect write-offs to increase.

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2007. This means that HPQ is over-stating its bad debt expense in the current year.

HPQ's write-offs as a percentage of the allowance decreased from 2006-2007. The reduction in write-off is reflected in their income statement as a corresponding reduction of bad debt expense and an increase in profit.

Interpreting the Accounts receivable Footnote
Hewlett-Packard Company (HPQ) reports the following in its 2010 10-K report.

HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts.

(a) What is the gross amount of accounts receivables for HPQ in fiscal 2010 and 2009?

(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2010 and 2009? (Round your answers to two decimal places.)

(c)What amount of bad debts expense did HPQ report each year 2008 through 2010? What amount was actually written off?

Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?

Generally, HP has overestimated its accruals, which has inflated profit by the over-accrual of bad debts.

Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts.

The difference between bad debt expense and write-off during the three years is small, so it appears they are accurately accruing for anticipated credit losses.

The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported.

(d)Compute HPQ's write-offs as a percentage of the allowance account at the beginning of the year (Round your answers to two decimal places).
2010 write-offs as a percentage of beginning of year allowance: Answer%
2009 write-offs as a percentage of beginning of year allowance: Answer%
What inferences can we draw as a result of changes in the allowance for doubtful accounts from 2009 to 2010?

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2010. We can , therefore, expect write-offs to increase.

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2010. This means that HPQ is over-stating its bad debt expense in the current year.

HPQ's write-offs as a percentage of the allowance decreased from 2009-2010. The reduction in write-off is reflected in their income statement as a corresponding reduction of bad debt expense and an increase in profit.

HPQ's write-offs as a percentage of the allowance decreased from 2009-2010. By this measure it appears that HPQ is accurately accruing for anticipated credit losses.

Question text

Interpreting the Accounts Receivable Footnote
Hewlett-Packard Company reports the following in its 2015 10-K report.

Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts.

(a) What is the gross amount of accounts receivables for Hewlett-Packard in fiscal 2015 and 2014?

(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2015 and 2014? (Round your answers to two decimal places.)

(c)What amount of bad debts expense did Hewlett-Packard report each year 2013 through 2015 (ignore increase in allowance from acquisitions)? What amount was actually written off?

Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?

Generally, HP has overestimated its accruals, which has deflated profit by the over-accrual of bad debts.

Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts.

The difference between bad debt expense and write-off during the three years is insignificant so it appears that profit has been fairly stated.

The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported.

(d)Compute Hewlett-Packard's write-offs as a percentage of the allowance account at the beginning of the year.
(Round your answers to two decimal places)
2015 write-offs as a percentage of beginning of year allowance: Answer%
2014 write-offs as a percentage of beginning of year allowance: Answer%
What inferences can we draw as a result of changes in the allowance for doubtful accounts from 2014 to 2015?

The allowance for uncollectible accounts has increased as a percentage of gross accounts receivable in 2015. We can , therefore, expect write-offs to increase.

HPQ's write-offs as a percentage of the allowance decreased from 2014-2015. By this measure it appears that HPQ is accurately accruing for anticipated credit losses.

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2015. This means that HPQ is over-stating its bad debt expense in the current year.

HPQ's write-offs as a percentage of the allowance increase from 2014 to 2015. This may imply that the allowance is too small.

In a study of the accuracy of fast food​ drive-through orders, Restaurant A had 341accurate orders and 57 that were not accurate.

Construct a 90​% confidence interval estimate of the percentage of orders that are not accurate.

a. Construct a 90​% confidence interval. Express the percentages in decimal form.

------------- <p<-------------

​(Round to three decimal places as​ needed.)

b. Compare the results from part​ (a) to this 90​% confidence interval for the percentage of orders that are not accurate at Restaurant​ B: 0.131 <p< 0.182.

You have 34 years left until retirement and want to retire with $4.6 million. Your salary is paid annually, and you will receive $72,000 at the end of the current year. Your salary will increase at 4.5 percent per year, and you can earn a 12.5 percent return on the money you invest. If you save a constant percentage of your salary, what percentage of your salary must you save each year?

A random sample of 150 visitors traveling in Hawaii found that 14% of them hiked the Legendary Na Pali Coast. Create a 94% confidence interval for the population proportion of visitors hiking the Na Pali Coast. Enter the lower and upper bounds for the interval in the following boxes, respectively. You may answer using decimals rounded to four places or a percentage rounded to two. Make sure to use a percent sign if you answer using a percentage.