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Business Accounting FINANCIAL + MANAG. ACCT. (LL) W/CONNECT

1 To prepare: The forecasted income statement . Introduction: Income statement helps in the identification of the amount of profit earned during the period. The statement considers the revenue generated and expenses incurred in the specified period to calculate the amount of profit. The forecasted income statement is as follows- Particulars Amount ($) Net sales $ 1 , 000 , 000 × 109 % 1,090,000 Less- Cost of sales $ 1 , 090 , 000 × 61 % 664,900 Gross margin 425,100 Expenses (other than the cost of sales) $ 200 , 000 × 106 % 212,000 Net income 213,100 Table (1) The forecasted income statement has a net sale of $1,090,000 because the sales increased by 9%. The previous cost of goods sold ratio is 61% $ 610 , 000 / $ 1 , 000 , 000 and the same remains the same. The other expenses were increased by 6% in the forecasted period. Thus, the net income is $213,100. 2 To determine: The acceptance or rejection of the proposal. Introduction: Net income is the amount earned from operating and non-operating activities by the business. It considers all the revenues and expenses and identifies the net amount earned in a specified period. The business should accept the new sales policy because the net income is increased after the acceptance of the proposal. The net income before the proposal is $190,000 while the net income after the proposal is $213,100. The net income is increased because of the implementation of the new sales policy. Hence, the business should move forward with the new sales policy. Thus, the business should accept the proposal. 3 To determine: The factors other than net income which affect the acceptance of new sales policies. Introduction: The acceptance or rejection of the proposal depends upon the net effect on the business. In case the business is benefited, then the proposal is accepted otherwise the proposal is rejected. The business should examine the accounts receivables and cash section before accepting the proposal. The items were affected because of a change in the credit policy and thus affects the financial position of the business. The increase in the discount rate will decrease the collection of cash within the discount period. The decrease in the overall credit period from 60 days to 30 days might affect credit sales. Thus, the accounts receivables will also get affected by the new sales policy. The acceptance of the policy will result in a change in the current working capital amount and thus business must consider it before accepting the policy. Thus, an examination of the working capital requirement should be made before taking the decision.

1 To prepare: The forecasted income statement . Introduction: Income statement helps in the identification of the amount of profit earned during the period. The statement considers the revenue generated and expenses incurred in the specified period to calculate the amount of profit. The forecasted income statement is as follows- Particulars Amount ($) Net sales $ 1 , 000 , 000 × 109 % 1,090,000 Less- Cost of sales $ 1 , 090 , 000 × 61 % 664,900 Gross margin 425,100 Expenses (other than the cost of sales) $ 200 , 000 × 106 % 212,000 Net income 213,100 Table (1) The forecasted income statement has a net sale of $1,090,000 because the sales increased by 9%. The previous cost of goods sold ratio is 61% $ 610 , 000 / $ 1 , 000 , 000 and the same remains the same. The other expenses were increased by 6% in the forecasted period. Thus, the net income is $213,100. 2 To determine: The acceptance or rejection of the proposal. Introduction: Net income is the amount earned from operating and non-operating activities by the business. It considers all the revenues and expenses and identifies the net amount earned in a specified period. The business should accept the new sales policy because the net income is increased after the acceptance of the proposal. The net income before the proposal is $190,000 while the net income after the proposal is $213,100. The net income is increased because of the implementation of the new sales policy. Hence, the business should move forward with the new sales policy. Thus, the business should accept the proposal. 3 To determine: The factors other than net income which affect the acceptance of new sales policies. Introduction: The acceptance or rejection of the proposal depends upon the net effect on the business. In case the business is benefited, then the proposal is accepted otherwise the proposal is rejected. The business should examine the accounts receivables and cash section before accepting the proposal. The items were affected because of a change in the credit policy and thus affects the financial position of the business. The increase in the discount rate will decrease the collection of cash within the discount period. The decrease in the overall credit period from 60 days to 30 days might affect credit sales. Thus, the accounts receivables will also get affected by the new sales policy. The acceptance of the policy will result in a change in the current working capital amount and thus business must consider it before accepting the policy. Thus, an examination of the working capital requirement should be made before taking the decision.

FINANCIAL + MANAG. ACCT. (LL) W/CONNECT

FINANCIAL + MANAG. ACCT. (LL) W/CONNECT

9th Edition

ISBN: 9781264699841

Author: Wild

Publisher: MCG

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FINANCIAL + MANAG. ACCT. (LL) W/CONNECT

Ch. 4 - Prob. 1QS Ch. 4 - Prob. 2QS Ch. 4 - Merchandise accounts and computations C2 Use the...Ch. 4 - Computing net invoice amounts P1 Compute the...Ch. 4 - Recording purchases, returns, and discounts taken...Ch. 4 - Prob. 6QS Ch. 4 - Prob. 7QS Ch. 4 - Prob. 8QS Ch. 4 - Prob. 9QS Ch. 4 - Prob. 10QS

Ch. 4 - Prob. 11QS Ch. 4 - Prob. 12QS Ch. 4 - Prob. 13QS Ch. 4 - Prob. 14QS Ch. 4 - Prob. 15QS Ch. 4 - Prob. 16QS Ch. 4 - Prob. 17QS Ch. 4 - Prob. 18QS Ch. 4 - Prob. 19QS Ch. 4 - Prob. 20QS Ch. 4 - Prob. 21QS Ch. 4 - Prob. 22QS Ch. 4 - Prob. 23QS Ch. 4 - Prob. 24QS Ch. 4 - Prob. 25QS Ch. 4 - Prob. 26QS Ch. 4 - Prob. 27QS Ch. 4 - Prob. 28QS Ch. 4 - Prob. 29QS Ch. 4 - Prob. 30QS Ch. 4 - Prob. 31QS Ch. 4 - Prob. 1E Ch. 4 - Prob. 2E Ch. 4 - Exercise 4-3 Recording purchase, purchase returns...Ch. 4 - Prob. 4E Ch. 4 - Prob. 5E Ch. 4 - Exercise 4-4 Recording sales, sales returns and...Ch. 4 - Prob. 7E Ch. 4 - Prob. 8E Ch. 4 - Prob. 9E Ch. 4 - Prob. 10E Ch. 4 - Prob. 11E Ch. 4 - Prob. 12E Ch. 4 - Prob. 13E Ch. 4 - Prob. 14E Ch. 4 - Prob. 15E Ch. 4 - Prob. 16E Ch. 4 - Prob. 17E Ch. 4 - Prob. 18E Ch. 4 - Prob. 19E Ch. 4 - Prob. 20E Ch. 4 - Prob. 21E Ch. 4 - Prob. 22E Ch. 4 - Prob. 23E Ch. 4 - Prob. 24E Ch. 4 - Prob. 25E Ch. 4 - Prob. 26E Ch. 4 - Prob. 27E Ch. 4 - Prob. 28E Ch. 4 - Prob. 29E Ch. 4 - Prob. 1PSA Ch. 4 - Prob. 2PSA Ch. 4 - Prob. 3PSA Ch. 4 - Prob. 4PSA Ch. 4 - Prob. 5PSA Ch. 4 - Prob. 1PSB Ch. 4 - Prob. 2PSB Ch. 4 - Prob. 3PSB Ch. 4 - Prob. 4PSB Ch. 4 - Prob. 5PSB Ch. 4 - Prob. 4SP Ch. 4 - Prob. 1GLP Ch. 4 - The General Ledger tool in connect several of the...Ch. 4 - Prob. 3GLP Ch. 4 - Prob. 1.1AA Ch. 4 - Prob. 1.2AA Ch. 4 - Prob. 1.3AA Ch. 4 - Prob. 1.4AA Ch. 4 - Prob. 2.1AA Ch. 4 - Prob. 2.2AA Ch. 4 - Prob. 2.3AA Ch. 4 - Prob. 3.1AA Ch. 4 - Prob. 3.2AA Ch. 4 - Prob. 3.3AA Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - How does a company that uses a perpetual inventory...Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - Prob. 1BTN Ch. 4 - COMMUNICATING IN PRACTICE C2 P3 P5 BTN 4-4 You are...Ch. 4 - Prob. 4BTN

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