10:383 all 100%|Question 4The income statement for Forklift Electrical Ltdfor two years are shown below:Forklift Electrical LtdIncome Statement ComparisonCurrent yearPrior Year(amounts in thousands)$ 33,75021,938$ 11,812$ 24,75016,830$ 7,920SalesCost of goods soldGross profitWages$ 8,775$ 6,188Utilities675250RepairsSellingTotal expenses169325506200$ 10,125$ 6,963Total assets (investment base) $ 4,500$ 1,500Required:a) d) Assuming an 8% cost of capital, calculate theresidual income for each year.e) Would the management of Forklift ElectricalLtd have been more likely to accept theinvestment opportunity if the residual incomehad been used as a performance measureinstead of ROI? Explain your answer.|Unsaved changesSaveB IUAII!!!

A business corporation may open different branches and these branches are called as business…

Question 4 The income statement for Forklift Electrical Ltd for two years are shown below: Forklift Electrical Ltd Income Statement Comparison Current year Prior Year (amounts in thousands) $ 33,750 21,938 $ 11,812 $ 24,750 16,830 $ 7,920 Sales Cost of goods sold Gross profit Wages $ 8,775 $ 6,188 Utilities 675 250 325 Repairs Selling Total expenses 169 506 200 $ 10,125 $ 6,963 Total assets (investment base) $ 4,500 $ 1,500 Required: a) d) Assuming an 8% cost of capital, calculate the residual income for each year. e) Would the management of Forklift Electrical Ltd have been more likely to accept the investment opportunity if the residual income had been used as a performance measure instead of ROI? Explain your answer.

Question 4 The income statement for Forklift Electrical Ltd for two years are shown below: Forklift Electrical Ltd Income Statement Comparison Current year Prior Year (amounts in thousands) $ 33,750 21,938 $ 11,812 $ 24,750 16,830 $ 7,920 Sales Cost of goods sold Gross profit Wages $ 8,775 $ 6,188 Utilities 675 250 325 Repairs Selling Total expenses 169 506 200 $ 10,125 $ 6,963 Total assets (investment base) $ 4,500 $ 1,500 Required: a) d) Assuming an 8% cost of capital, calculate the residual income for each year. e) Would the management of Forklift Electrical Ltd have been more likely to accept the investment opportunity if the residual income had been used as a performance measure instead of ROI? Explain your answer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

25
Required information For Year Ended December 31 Sales Cost of goods sold Other operating expenses Current Year $ 411, 225 209,550 12, 100 9,525 $ 673,500 642, 400 $31,100 $ 1.90 :. -. - == ....... 9 US Sa M
Round your answer to the nearest whole percent
Assume the following sales data for a company:Current year$832,402 Preceding year608,082What is the percentage increase in sales from the preceding year to the current year? a.136.89% b.36.89% c.73.05% d.26.95% The relationship of $242,729 to $104,267, expressed as a ratio, is a.0.8 b.2.3 c.0.4 d.0.7
Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $10,850,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,450,000.00 4 Gross profit $4,850,000.00 $4,550,000.00 5 Selling expenses $2,170,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,797,500.00 $3,500,000.00 8 Income from operations $1,052,500.00 $1,050,000.00 9 Other revenue 99,500.00 20,000.00 10 $1,152,000.00 $1,070,000.00 11 Other expense (interest) 132,000.00 120,000.00 12 Income before income tax $1,020,000.00 $950,000.00 13 Income tax expense 420,000.00 400,000.00 14 Net income $600,000.00 $550,000.00 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Assets…
Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $10,850,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,450,000.00 4 Gross profit $4,850,000.00 $4,550,000.00 5 Selling expenses $2,170,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,797,500.00 $3,500,000.00 8 Income from operations $1,052,500.00 $1,050,000.00 9 Other revenue 99,500.00 20,000.00 10 $1,152,000.00 $1,070,000.00 11 Other expense (interest) 132,000.00 120,000.00 12 Income before income tax $1,020,000.00 $950,000.00 13 Income tax expense 420,000.00 400,000.00 14 Net income $600,000.00 $550,000.00 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Assets…
Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $10,850,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,450,000.00 4 Gross profit $4,850,000.00 $4,550,000.00 5 Selling expenses $2,170,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,797,500.00 $3,500,000.00 8 Income from operations $1,052,500.00 $1,050,000.00 9 Other revenue 99,500.00 20,000.00 10 $1,152,000.00 $1,070,000.00 11 Other expense (interest) 132,000.00 120,000.00 12 Income before income tax $1,020,000.00 $950,000.00 13 Income tax expense 420,000.00 400,000.00 14 Net income $600,000.00 $550,000.00 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Assets 3…
Assume the following sales data for a company: Current year $770,668 Preceding year 635,551 What is the percentage increase in sales from the preceding year to the current year? a.121.26% b.17.53% c.82.47% d.21.26%
Need answer the question
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $493,000 $419,000 Cost of goods sold 281,010 213,690 83,810 Selling expenses 83,800 Administrative expenses 93,670 71,230 Income tax expense 14,790 20,950 a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amour nounts as positive numbers. Innovation Quarter Inc Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $493,000 $419,000 281,010 213,690 Cost of goods sold Selling expenses 83,810 83,800 96 96 93,670 71,230 Administrative expenses
5. Revenue and expense data for Young Technologies Inc. are as follows: Year 2 Year 1 Sales $500,000 $440,000 Cost of goods sold 325,000 242,000 Selling expenses 70,000 79,200 Administrative expenses 75,000 70,400 Income tax expense 10,500 16,400 Required: a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent. ... b. Complete the following regarding the significant changes disclosed by the comparative income statement. The vertical analysis indicates that the cost of goods sold as a percent of sales (increased/decreased) between the two years. Selling and administrative expenses as a percentage of sales (increased/decreased) and income tax expense (increased/decreased). Overall, net income as a percent of sales (increased/decreased).
Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $369,600 $280,000 Cost of goods sold 312,000 240,000 Gross profit $57,600 $40,000 Selling expenses $17,080 $14,000 Administrative expenses 15,600 12,000 Total operating expenses $32,680 $26,000 Income before income tax $24,920 $14,000 Income tax expenses 10,000 5,600 Net income $14,920 $8,400 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales $369,600 $280,000 $ % Cost of goods sold 312,000 240,000 % Gross profit $57,600 $40,000 %