Vertical Analysis: In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc. Requirement 1 To compute: Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity , and total assets for the current year and prior year.

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Answer 1

Question

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

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I need a expert not AI Step Amount Category Inventory 1. Beginning Balance, January 1 28,000 Beginning Balance Raw Materials 2. (+) Purchases (RM Purchases) 220,000 Addition Raw Materials 3. (-) Ending Balance 20,000 Ending Balance Raw Materials 4. = Transferred Out (RM used) (228,000) Transferred Out Raw Materials 5. (+) Direct Labor (152,000) Transferred Out Direct Labor 6. (+) Fixed Overhead 300,000 Addition Overhead 7. (+) Variable Overhead - Addition Overhead 8. = Total Factory Overhead (390,000) Transferred Out Overhead 9. Beginning Balance, January 1 40,000 Beginning Balance WIP 10. (+) Additions (RM used) 228,000 Addition WIP 11. (+) Additions (DL used) 152,000 Addition WIP 12. (+) Additions (OH used) 390,000 Addition WIP 13. (-) Ending Balance, December 31 55,000 Ending Balance WIP 14. = Transferred Out (COGM) (755,000)…

Step Amount Category Inventory 1. Beginning Balance, January 1 28,000 Beginning Balance Raw Materials 2. (+) Purchases (RM Purchases) 220,000 Addition Raw Materials 3. (-) Ending Balance 20,000 Ending Balance Raw Materials 4. = Transferred Out (RM used) (228,000) Transferred Out Raw Materials 5. (+) Direct Labor (152,000) Transferred Out Direct Labor 6. (+) Fixed Overhead 300,000 Addition Overhead 7. (+) Variable Overhead - Addition Overhead 8. = Total Factory Overhead (390,000) Transferred Out Overhead 9. Beginning Balance, January 1 40,000 Beginning Balance WIP 10. (+) Additions (RM used) 228,000 Addition WIP 11. (+) Additions (DL used) 152,000 Addition WIP 12. (+) Additions (OH used) 390,000 Addition WIP 13. (-) Ending Balance, December 31 55,000 Ending Balance WIP 14. = Transferred Out (COGM) (755,000) Transferred Out WIP 15.…

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Answer 2

Question

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

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Answer 3

Question

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

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Answer 4

Question

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

Answer 6

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

Answer 7

Chapter 6, Problem 3.4AA

a.

To determine

Vertical Analysis:

In vertical analysis, every line item is represented as a percentage of a base amount which can be either total assets, total liabilities, total equities, etc.

Requirement 1

To compute:

Cash as a percentage of total current assets, total current liabilities, total stockholders’ equity, and total assets for the current year and prior year.

Answer 8

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

Answer 9

b.

To determine

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.

Answer 10

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

Answer 11

c.

To determine

Days’ sales uncollected:

This ratio defines how fast a company converts its receivable into known amounts of cash. The lesser the ratio is, the better it is for the company as it will prove that the company employs an efficient system of cash collection from customers.

Requirement 3

To compute:

The days’ sales uncollected for both the current and prior year.

Answer 12

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

Answer 13

d.

To determine

Changes in Days’ sales uncollected:

The changes in the ratio of days’ sales uncollected will greatly impact the liquidity problem of the entity. If it is reduced, the company is considered to be efficiently managing its cash collection mechanism or in case, it is increased, the otherwise will follow.

Requirement 4

Whether S’s receivables collection is showing a favorable or unfavorable change.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 6 - Prob. 1QS Ch. 6 - Prob. 2QS Ch. 6 - Prob. 3QS Ch. 6 - Prob. 4QS Ch. 6 - Prob. 5QS Ch. 6 - Prob. 6QS Ch. 6 - Prob. 7QS Ch. 6 - Prob. 8QS Ch. 6 - Prob. 9QS Ch. 6 - Prob. 10QS

Horizontal Analysis: In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years. Requirement 2 To compute: Percentage change between the beginning and ending cash balances for the current year.

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Chapter 6 Solutions

Horizontal Analysis:

In a horizontal analysis, a single line item is represented and compared as a percentage change from one base year to the subsequent years.

Requirement 2

To compute:

Percentage change between the beginning and ending cash balances for the current year.