X company always aim a steady net income, but the company this year had high sales resulted in extremely high net income, so the president told the controller to increase the yearly allowance for doubtful account from 4% to 6% of net credit sales because he is nervous the stockholders might expect the company to always be able to sustain such a high net income. Q/ what actions the controller should take and why ?

X company always aim a steady net income, but the company this year had high sales resulted in extremely high net income, so the president told the controller to increase the yearly allowance for doubtful account from 4% to 6% of net credit sales because he is nervous the stockholders might expect the company to always be able to sustain such a high net income. Q/ what actions the controller should take and why ?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1. Explain the relationship between the Cost Management System and the Financial Accounting System 2. Distinguish between IASB standards and the Conceptual Framework for Financial Reporting 3. Hardly a day goes by without an article appearing on the crises affecting many of our financial institutions. It is estimated that the financial crises 2007 - 2008 for example, caused a deep recession. Some argue that if financial institutions had been required to report their investments at fair value instead of cost, large losses would have been reported earlier, which would have signaled regulators to close these financial institutions, therefore minimizing the losses to many investors. Explain how reported accounting numbers might affect an individual's perceptions and actions. Cite two examples. 4. Explain principles based vs. rule-based accounting standards. Which one is mostly used as reference by PSAK or IFRS?
#6 Issue: Reed Kohler is in his final year of employment as controller for Quality Sales Corporation; he hopes to retire next year. As a member of top management, Kohler participates in an attractive company bonus plan. The overall size of the bonus is a function of the firm’s net income before bonus and income taxes—the larger the net income, the larger the bonus. Due to a slowdown in the economy, Quality Sales Corporation has encountered difficulties in managing its cash flow. To improve its cash flow by reducing cash payments for income taxes, the firm’s auditors have recommended that the company change its inventory costing method from FIFO to LIFO. This change would cause a significant increase in the cost of goods sold for the year. Kohler believes the firm should not switch to LIFO this year because its inventory quantities are too large. He believes that the firm should work to reduce its inventory quantities and then switch to LIFO (the switch could be made in a year or…
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How can accountants reduce bad earnings? Question 8 options: Monitor Managers Improve Disclosure Decrease Disclosure Monitor Investors
Q3
Which of the following is correct criticism on the positive accounting theory? O a. It gives prescriptions for accounting practice of the company. O b. It misleads the stock market by manipulating the earnings. O c Its earnings numbers prepared according to a single basis. O d. It says something about good or bad accounting policy of the company.
JKW Corporation (a fictional company) has been selling plumbing supplies since 1981. In 2003, the company adopted the LIFO method of valuing its inventory. The company has grown steadily over the years and a layer has been added to its LIFO inventory in each of the years the method has been used. The company's inventory turnover ratio has averaged 4.5 in recent years. Management attempts to maintain a stable level of inventory at each store; the growth in inventory has been due to new stores being opened each year. In 20X1, the board of directors approved an incentive program that pays managers a sizable bonus in each year that certain performance targets are met. For 20X2, targeted earnings per share are $3.35. In an effort to track progress toward meeting this target, management produced the following income statement for the first nine months of 20X2. JKW Corporation Income Statement January 1-September 30, 20X2 Sales $13,284,000 Cost of goods sold Gross margin Operating expenses…
if the national bank of canada has a quarterly dividend amount of $1.02, do I just multiply $1.02 by 4 to get the annual dividend? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
12. ______________ is the ultimate objective of a finance manager in a business organization. a. Profit maximization b. On time payment of salaries c. None of the options d. Overall growth of the organization
On November 14, Thorogood Enterprises announced that the public and acrimonious battle with its current CEO had been resolved. Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume the company has an expected return equal to the market return. Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place. Market Return (%) Company Return (%) Date November 7 1.3 0.9 November 8 1.1 0.9 November 9 -1.0 -0.4 November 10 -0.6 -0.6 November 11 2.1 1.0 November 14 -0.9 2.6 November 15 0.1 0.1 November 16 0.9 1.5 November 17 1.0 0.4 November 18 -1.0 0.0 November 21 1.1 0.2 Days from Announcement Daily Abnormal Cumulative Abnormal Return Return -5 -0.4 -0.4 -4…
i need ans of surface revenue and deffered revenue
11.3 Hau Lee Furniture, Inc., described in Example 1 of this chapter, finds its current profit of $10,000 inadequate. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $25,000 so he can obtain the bank’s approval for the loan. a) What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit? b) What percentage improvement is needed in the sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000? Please provide steps so that I can better understand how the answer is found.

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