2) Compute the EBIT margin and its components – the gross profit margin and selling, general, and administrative expenses to revenue in 2018 and 2019. What caused the change in EBIT margin? [You do not have to use the average method – i.e. you can use year-end numbers in computing the ratios.]

Instructions – PLEASE READ THEM CAREFULLY

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• Students must mention question number clearly in their answer.
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• Submissions without this cover page will NOT be accepted.

Assignment Question(s):                                                   

Q1- Provide an example of each title here and then record the journal entries.

Following is the first given answer.

1-Purchasing Equipment for cash

Given answer:

ABC company purchased equipment for SAR20,000 cash .

Equipment 20,000

Cash                   20,000

2-Issuing common stocks receiving cash.

3-Providing service receiving cash.

4-Purchasing supplies on credit.

5-Borrowing money from a bank.

6-Paying employees their salaries.

Q2- What is the accrual basis of accounting? When should revenue and expense be recognized in the accrual basis? Provide an example.                         (1 Mark)

Q3- On your own words, explain the purpose and the importance of the income statement, and prepare the income statement for ABC company based on the following information taken from the trial balance in 2019.                               

Knight Corporation produces and sells one product. Knight has provided the following annual per unit cost data at an activity level of 100,000 units: $ Per Unit Sales 100.00 Direct labor 25.00 Direct material 30.00 Variable manufacturing overhead 10.00 Fixed manufacturing overhead 20.00 Variable selling expenses 5.00 Fixed selling expenses 4.00 Fixed administrative expenses 8.00 The relevant range for is 90,000 - 120,000 units. You will be given facts for three different options. Using the facts given, calculate amounts as directed below. Take each option independent of the others (start with the original information given for each). You must enter your answer in the following format: $x,xxx At the current level of activity, calculate the following: Total sales revenue Blank 1 Total contribution margin Blank 2 Total fixed expenses Blank 3 Knight is thinking about taking a price reduction approach to increasing net income. The company believes that a 5% reduction in sales price will increase volume by 10%. Simultaneously, there will be a change in suppliers for direct material that will result in lowering direct material costs by 10%. Calculate the following: Total sales revenue Blank 4 Total contribution margin Blank 5 Total fixed expenses Blank 6 Knight is also considering an approach that will not alter sales price. The company believes that by laying off non-productive workers they can reduce direct labor to 20% of sales. Combined with a $5,000 increase in advertising per month, they estimate sales will increase 2% over current sales. Calculate the following: Total sales revenue Blank 7 Total contribution margin Blank 8 Total fixed expenses Blank 9

Think about the “industry” the company started in, or perhaps which industry has historically generated most of its revenue or profits.
Are these acquisitions and new brands related to that industry or something entirely new?
Do their acquisitions indicate a vertical integration strategy –or a diversification strategy?

Most random or trivial expenses are recorded in the miscellaneous expense account. At the end of the year the miscellaneous expense account has a total of RM1,400 and the total revenue of the company has a total of RM400,000. There is no need to reclassify the expenses in it. This is in line with the ______________ concept. *

a.accrual

b.comparability

c.materiality

d.neutrality

Sachs Brands defined benefit pension plan specifies annual retirement benefits equal to: 1.3% x service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $96,000 at the end of 2018 and the company's actuary projects her salary to be $310,000 at retirement. The actuary's discount rate is 6%.

Required:

2) estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2018. (I got 60,450 which was correct)

3) What is the company's projected benefit obligation at the end of 2018 with respect to Davenport? (I got 204,082 which was correct)

4) If not estimates are changed in the meantime, what will be the company's projected benefit obligation at the end of 2021 (three years later) with respect to Davenport? I NEED THIS ANSWER

Alsalam manufactures undertakes works against customers order. The following details relates to December 31^st 2019

During the month December the company procured raw material worth OMR 150,000.During this period the company has undertaken different jobs. The factory overhead rate is estimated at 130% of direct labour cost but actual factory overhead incurred is OMR 68,000. The company purchased a machinery on 01.01.2019 at OMR 500,000 to be depreciated at 10% p.a. Other important information is given below:

1. Jobs completed No:301,303,304,305 and 306
2. Job no. 301,303,304 and 305were shipped and customers were billed for OMR 60,000, OMR 78,000,OMR 57,000 and OMR 85,000;

1. Material requisitioned and Factory labour used:

As a cost accountant , you are required to pass necessary journal entries for the month of December 2019.Also make work in process and finished goods account and finally arrive the gross profit or loss for the month.   

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below:

Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.

omplete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3
• Required 4

Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time. (Loss amounts should be indicated with a minus sign.)

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.

repare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.

Describe the two-stage process for establishing credit standards.

1. First, the company must establish credit acceptance criteria that represent a maximum amount of payment risk the company is willing to assume.

2. ??

Describe three considerations companies must evaluate when establishing a method of analyzing credit requests.

1. The type of information

2. ??

3. The cost of information

Describe four external sources companies can use to determine the creditworthiness of a credit applicant.

1. ??

2. Trade references, or other companies from whom the applicant has purchased on credit, can provide a secondary source of information about the applicant’s payment performance.

3. Banks or other financial creditors (e.g., commercial finance or leasing companies) can provide standardized credit information about an applicant’s financial condition and available credit.

4.??

Describe the four-step credit scoring process major issuers of retail credit use for consumer credit analysis.

1. Differentiating standard and high-risk accounts based on the applicant’s monthly income, outstanding obligations and employment history

2. Weighting the characteristics of applicants who fit into each category to establish creditworthiness

3. ??

4. Applying further analysis to applicants whose scores fall between the cutoff points

Describe four disadvantages of accepting credit cards for customer financing.

1.??

2. The seller loses promotional opportunities by not having access to a list of credit customers.

3. ??

4.??

Describe four reasons that motivate the holding of inventory.

1. ??

2. As a precautionary measure

3. ??

Direct mail advertisers send solicitations​ (junk mail) to thousands of potential customers hoping that some will buy the​ company's product. The response rate is usually quite low. Suppose a company wants to test the response to a new flyer and sends it to 1000 randomly selected people. The company gets orders from 139 of the recipients and decides to do a mass mailing list to everyone on its mailing list of over​ 200,000. Create a​ 95% confidence interval for the percentage of those people who will order something. (Use 1.96 for the z statistic)