Managerial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134067179
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 14, Problem 14.45ACT
Discussion & Questions
- 1. Describe horizontal analysis. Describe vertical analysis. What is each technique used for? How are the two methods similar? How are they different?
- 2. How is the
current ratio calculated? What is it used to measure? How is it interpreted? - 3. Assume a company has a current ratio of 2.0. List two examples of transactions that could cause the current ratio to increase. Also list two examples of transactions that could cause the current ratio to decrease.
- 4. What does the
accounts receivable turnover measure? What does a relatively high accounts receivable turnover indicate about a company? - 5. Describe the set of circumstances that could result in net income increasing while
return on investment (ROI) decreases. - 6. Suppose a company has a relatively high inventory turnover What does the high inventory turnover indicate about the company s short-term liquidity?
- 7. Describe at least four financial conditions that may signal financial trouble.
- 8. Describe at least two reasons that a company’s ratios might not be comparable overtime.
- 9. Compare and contrast the current ratio and the quick ratio.
- 10. Describe why book value per share of common stock may not be useful for investment analysis.
- 11. Find a recent annual report for a publicly held company in which you are interested. Summarize what sustainability information is provided in that annual report. Based on the sustainability information provided in the annual report, what measurements do you think the company might use to track its sustainability efforts? (You can use your imagination here; the actual sustainability measures are unlikely to be in the annual report.)
- 12. There are three components in the triple bottom line; people, planet, and profit. Which component do you think is most important? Why?
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Students have asked these similar questions
On January 1, 2024, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $532,000 by Elmira on December 31, 2026. The effective interest rate is 8%.
Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
How much sales revenue would Wright recognize on January 1, 2024, for this transaction?
Prepare journal entries to record the sale of merchandise on January 1, 2024 (omit any entry that might be required for the cost of the goods sold), the December 31, 2024, interest accrual, the December 31, 2025, interest accrual, and receipt of payment of the note on December 31, 2026.
Wesson Company is a consulting firm. The firm expects
to have $45,000 in indirect costs during the year and bill
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Swathmore Clothing Corporation grants its customers 30 days’ credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 2% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly.
At the end of 2023, accounts receivable were $610,000 and the allowance account had a credit balance of $74,000. Accounts receivable activity for 2024 was as follows:
Beginning balance
$ 610,000
Credit sales
2,800,000
Collections
(2,663,000)
Write-offs
(57,000)
Ending balance
$ 690,000
The company’s controller prepared the following aging summary of year-end accounts receivable:
Age Group
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0−60 days
$ 460,000
4%
61−90 days
78,000
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67,000
26
Over 120 days
85,000
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$ 690,000…
Chapter 14 Solutions
Managerial Accounting, Student Value Edition (5th Edition)
Ch. 14 - (Learning Objective 1) Which of the following...Ch. 14 - Prob. 2QCCh. 14 - Prob. 3QCCh. 14 - Prob. 4QCCh. 14 - (Learning Objective 3) Which of the following is...Ch. 14 - (Learning Objective 4) Working capital is defined...Ch. 14 - Prob. 7QCCh. 14 - Prob. 8QCCh. 14 - Prob. 9QCCh. 14 - Prob. 10QC
Ch. 14 - Prob. 14.1SECh. 14 - Find trend percentages (Learning Objective 1)...Ch. 14 - Prob. 14.3SECh. 14 - Prepare common-size income statements (Learning...Ch. 14 - Analyze common-size income statements (Learning...Ch. 14 - Cartwrights Data Set used for S14-6 through...Ch. 14 - Cartwrights Data Set used for S14-6 through...Ch. 14 - Cartwrights Data Set used for S14-6 through...Ch. 14 - Prob. 14.9SECh. 14 - Prob. 14.10SECh. 14 - Prob. 14.11SECh. 14 - Prob. 14.12AECh. 14 - Prob. 14.13AECh. 14 - Prob. 14.14AECh. 14 - Prob. 14.15AECh. 14 - Prob. 14.16AECh. 14 - Calculate ratios (Learning Objective 4) Kelleher...Ch. 14 - Prob. 14.18AECh. 14 - Prob. 14.19AECh. 14 - Prob. 14.20AECh. 14 - Prob. 14.21AECh. 14 - Classify company sustainability measurements into...Ch. 14 - Prob. 14.23BECh. 14 - Prob. 14.24BECh. 14 - Prob. 14.25BECh. 14 - Prob. 14.26BECh. 14 - Prob. 14.27BECh. 14 - Calculate ratios (Learning Objective 4) Ponderosa...Ch. 14 - Prob. 14.29BECh. 14 - Prob. 14.30BECh. 14 - Prob. 14.31BECh. 14 - Calculate ratios (Learning Objective 4) Thornton...Ch. 14 - Prob. 14.33BECh. 14 - Prob. 14.34APCh. 14 - Comprehensive analysis (Learning Objectives 2, 3, ...Ch. 14 - Prob. 14.36APCh. 14 - Ratio analysis over two years (Learning Objective...Ch. 14 - Prob. 14.38APCh. 14 - Prob. 14.39BPCh. 14 - Prob. 14.40BPCh. 14 - Prob. 14.41BPCh. 14 - Ratio analysis over two years (Learning Objective...Ch. 14 - Make an investment decision (Learning Objective 4)...Ch. 14 - Prob. 14.44SCCh. 14 - Discussion Questions 1. Describe horizontal...Ch. 14 - Prob. 14.47ACTCh. 14 - Using financial statement ratios to analyze...
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