Required: Based on the information contained in the extracts of Bowdry Ltd's latest financial statements, answer the questions below. (a) Give the formulas for calculating the following two working capital ratios: (1) inventory days. (i) receivables collection period. (b) Calculate the inventory days and receivables collection period for Bowdry Ltd for 2021 and 2020 and show your workings. (Assume all sales and purchases are made on credit. All calculations should be to whole days.) (c) (i) In the accounting period above, the payables payment ratio has gone up from 39 in 2020 to 41 days in 2021. Calculate the working capital Cucle for Rowdn I td for 2021 ond 2020
Q: Cala Manufacturing purchases land for $381,000 as part of its plans to build a new plant. The compan...
A: The journal entries are prepared to keep the record of day to day transactions of the business. The...
Q: On Jan. 1, 2021, Gel Co. settled a P 1,000,000 loan by issuing to the lender 10,000 shares with par ...
A: Bonds means an instrument issued by company acknowledging the debt due from company to bond holder. ...
Q: XYZ plc manufactures a single product. Data relating to this figure is as follows: Selling price per...
A: when contribution margin method is followed the variable cost are deducted from sales to arrive at c...
Q: Arnina established a service business to be known as Arnina Photography on July 1, 2021. During the ...
A: The procedure of entering business transactions for the first time in the books of accounts is known...
Q: A draw bench for precision forming and strengthening of carbon steel tubing has a cost of $950,000. ...
A: Depreciation under straight line method : under this method depreciation is equally charged on over ...
Q: What would be the journal entry to record the estimated liability for warranty on Dec. 31? * a. A d...
A: Warranty is a form of assurance that is being given to the buyer that in case product will have any ...
Q: Murata Enterprises has a long-standing policy of acquiring company equipment by leasing. Early in 2...
A: Lease Payment There are mainly two types of leases are there one is operating lease and another one ...
Q: On January 1, Power House Co. prepaid the annual rent of $22,600. Journalize this transaction. If an...
A: Prepaid annual rent = $22600
Q: An Analysis of Nice Company's liabilities disclosed the following: Accounts payable, after deducting...
A: As per IAS 1 Presentation of financial statements, Current liabilities is amount payable within norm...
Q: Given the following data for ABC company for the year ended 2018: inventory turnover ratio = 5.3125x...
A: Answer) Calculation of Property, Plant and Equipment Fixed Assets turnover ratio = Net Sales/ Averag...
Q: The Foundational 15 [LO2-1, LO2-2, LO2-3, LO2-4] [The following information applies to the questions...
A: The predetermined overhead rate is calculated as estimated overhead cost divided by base activity.
Q: A draw bench for precision forming and strengthening of carbon steel tubing has a cost of S950,000. ...
A: >Accounting principle states that the cost of the long term assets (like equipment) is to be capi...
Q: The Kingdom Company uses a sales journal and a cash receipts journal to record transactions with its...
A: Date Account Debited Invoice No. Ref. Sales revenue Cr. Inventory (Dr.) 2 Oct Ahmad Sabre...
Q: Flexibility is one of the principles of an efficient and effective accounting information system! Ex...
A: The accounting information system (AIS) is the system software used by businesses to keep their acco...
Q: Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the T...
A:
Q: Problem 2-5 Preparing the Statement of Comprehensive Income - Multi-Step (Function of Expense Method...
A: An income statement is a financial report that indicates the revenue and expenses of a business. It ...
Q: At the end of the current year, fees of $4,430 have been earned but have not been billed to clients....
A: ANSWER THE ADJUSTING ENTRY FOR THE END OF THE CURRENT YEAR IS ACCOUNT RECEIVABLE Dr $4430 T...
Q: Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhou...
A: Break Even Units = Fixed Costs / Contribution Per Unit Break Even Sales = Break Even Units x Sale Pr...
Q: Instructions Chart of Accounts Journal Instructions Journal On August 1, 20Y1, Newhouse Co. received...
A: 1. Adjusting Entry - Adjusting Entries are the entries that enters at the end of the financial year....
Q: In 2020 a vat registered real estate dealer sold a residential lot for P1,919,500 to a vendee who in...
A: Under the TRAIN Law this is applied only the property which to sale of real properties not primarily...
Q: 1. NSF check from customer is returned on September 25 but not yet recorded by this company. Deducti...
A: Sometimes due to certain reasons the balance of the cash book and the bank statement doesn't matches...
Q: Ayayai Ltd. had the following 2020 income statement data: Sales $205,600 Cost of goods sold 119,400 ...
A: The Cash Flow statement shows the flows of cash and cash equivalent during the period under report. ...
Q: A company has two product cost centres: the Moulding Department and the Cutting Department. Details ...
A: Overhead rate = Total overhead costs /Total direct machine hours Overhead cost for one unit of Produ...
Q: Power Development Incorporation is expecting earnings before interest and taxes of P2 million for th...
A: Given that ; EBIT:$2,000,000 Less: Interest : ($5,000,000*10%) 500,000 Earning before Tax : 1,500,00...
Q: COMPUTE FOR DAY SALES OUTSTANDING RATIO GIVEN ASSETS Current Assets Cash and cash e...
A: The average number of days taken by a corporation to obtain payment for a sale is called days sales ...
Q: Requlred Information Use the following information for the Exercises below. [The following informati...
A: The deprecation expense is charged on fixed assets as reduction in the value of fixed assets with th...
Q: A draw bench for precision forming and strengthening of carbon steel tubing has a cost of S950,000. ...
A: Annual depreciation = (cost of the assets - salvage value) / expected life of the assets Book value ...
Q: Perfume Factory -Regular time 8 hours per day. - 4 hours as Overtime in 3 Months (Jan, Feb, Mar)...
A: Labor productivity per worker= Output per period/ No. of workers Calculation of output (for 3 months...
Q: The balance of Allowance for Doubtful Accounts before adjustment at the end of the period is P 400 ...
A: The allowance for doubtful accounts is created to record estimated bad debt expense for the period.
Q: determine Activity based year 2 accumulated depreciation_______
A: Depreciation is a method of spreading over the cost of the asset over the years in which the benefit...
Q: 0.15 0.05 001 -0.03 -0.01 0.09 the expected returns of the two stocks? the standard deviations of th...
A: The term expected return of stock refers to the profit or loss amount which investor anticipates on ...
Q: Name: Learning Task #1 Directions: Complete the table below. The first item has been done for you. D...
A: The question is related to Classifications of the item given.
Q: Interpreting Information in the Statement of Shareholders' Equity The 2014 statement of stockholders...
A: Treasury Stock- The Treasury stock is also known as shareholder's reclaimed stock, which refers to s...
Q: 1. Darna, employed, derived the Gross Salaries 13th Month pay and other benefi SSS, PhilHealth and P...
A: In this question, we will calculate the compensation income that can be reported in annual income ta...
Q: Due to extreme financial difficulties, Armand Company had negotiated a restructuring of a 10% P 5,00...
A: Annual interest expense = Carrying value of the bonds x market interest rate x no. of months/12 Annu...
Q: Requlred Informatlon Use the following information for the Exercises below. [The following informati...
A: 1. Depreciation- Depreciation is calculated to capture the wear and tear of the assets for the purpo...
Q: :Company provided the following information related to its accounts receivable. Last year 12/31 Esti...
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Q: following three theories of corporate social responsibility: (i) shareholder value theory, (ii) stak...
A: These are three management theories 1) Shareholders value theory: shareholders value theory says tha...
Q: During 2011, Vien Co. introduced a new line of machines that carry a three-year warranty against man...
A: Warranty liability = Total expense recognized - Actual warranty expenditure The question requires ca...
Q: January 1, 20x1, Peter Corp. acquired the identifiable net assets of Ella Corp. by paying cash of P1...
A: Consideration is an amount that the company will pay to the acquirer company at the time of acquisit...
Q: a. The reduction in sales price attributed to the coupon is recognized as premium expense b. The dif...
A: GOODS are sold it is sold at above the the cost that is incurred in order to generate profit. so sel...
Q: The current sections of Crane Inc.’s balance sheets at December 31, 2021 and 2022, are presented her...
A: Operating activities section of the statement of cash flows is used to represent the cash flow chang...
Q: The HEYBM CORPORATION presented the following in order to aid the accountant in preparing the CFS (D...
A: Solution Concept There are two methods of preparing cash flow statement , direct and indirect method...
Q: Montana Mining Co. pays $3,926,550 for an ore deposit containing 1,572,000 tons. The company install...
A: Depletion expense of Ore mine = Cost of Ore mine x Tons of Ore mines and sold / Total Ore deposit De...
Q: What is Milson's rate of return on common stock equity for 2021?
A: Return on Common Equity = Net Income for Common Stockholders / Average Common Equity Net Income for ...
Q: E6.7 (LO 2). AP Jeters Company uses a periodie inventory system and reports the following for the mo...
A: First-In, First-Out (FIFO) & Last-In, First-Out (LIFO): First in, first-out (FIFO) is an account...
Q: 2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not r...
A: First we calculate, predetermined overhead rate Predetermined overhead rate = Estimated total overhe...
Q: The Tolar Company has 400 obsolete desk calculators that are carried in inventory at a total histori...
A: Opportunity costs = Revenue from sale of upgraded calculator - Additional costs
Q: Units-of-Production Method A light truck is purchased on January 1 at a cost of $35,000. It is expec...
A: Under units of production method, depreciation expense per unit is calculated by dividing depreciabl...
Q: mount of the receivable according to their age and percent of uncollectible based on observable data...
A: The estimated uncollectible is calculated by multiplying the percent of uncollectible into the accou...
Step by step
Solved in 5 steps
- Manalo Inc. had the following data for 2019 (in millions). The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. Manalo finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have increased? Original Benchmark Data Related CCC CCC Sales Cost of goods sold Inventory (iCP) Receivables (DSO) P100,000 PS0,000 P20,000 P16,000 P5,000 91.25 38.00 S8.40 20.00 20.00 28.00 Payables (POP) 22.1 12634 2,531 2,301 O 1,901 2,092 2,784We are going to explore the differences between two different companies, both from the same sector, firms A and B. They differ in their reinvestment abilities. Firm A and Firm B are both financed with equity only. At the end of their business year, both firms report $1,000m in revenue. The net income is $200m for both firms. Assume that management is able to maintain a constant net profit margin of 20%. • Firm A is capable of achieving 8% revenue growth annually by investing 27% of their net income. . Firm B is capable of achieving 8% revenue growth annually by investing 40% of their net income. Assume that this difference persists into the future. a) Find the value of firms A and B. Use a discount rate of 16% for both firms. Value of firm A in millions: Value of firm B in millions: b) The forward P/E ratio of a company is the price of a share divided by next year's earnings per share, or its value divided by next year's earnings. What is the forward P/E ratio of firms A and B? P/E…Lulu hyper market in Nizwa had faced a serious cash crunch during the last vear due to the pandemic. In the vear 2021 the business wants to improve its internal performance and needs to account for the exact money has to be floated as working capital in order to fuel the increased activities of the business. The finance department had provided with the following information to the management accounting team to work out the Average payment period. The business has started its operations in the last year with an opening stock of OMR 5,000 and purchased OMR 20,000 worth goods from its supplier. Later, the busines OMR 40,000 out of which OMR 15,000 was on cash basis. The finance department has also provided with the following details s has rejected OMR 2,000 worth goods after the quality check conducted by the stores department. The total sales of the company for the year 2020 was Debtors at the beginning 8.000 12.000 Creditors at the beginning Creditors at the end Stock at the end 6,000…
- Referring to the following data of the Omani Company, answer A and B: - (Note; Write all related Equations regarding the questions) 1. The company manager targets to increase the current ratio in the year (2021) by 30% out of the previous year (2020), this requiring to increase the amount of the total current asset. To what level can the manager increase the total current asset to achieve this target (30%) at (2021)? (Suppose the other things are fixed) 2. The manager put a plan to increase the Time interest Earns (TIE) in the (2021) by (17%) out of the previous year (2020) to increase sales. How much will this plan to add amount to the accounts receivable (Suppose the other things are fixed) Data of 2020 Total Asset Turnover 2.5 Times Net Fixed Asset 600 (Thousand OMR) Total Liabilities 500 (Thousand OMR) Sales 2000 (Thousand OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) Long-term Liabilities 200 (Thousand…Referring to the following data of the Omani Company, answer A and B: - (Note; Write all related Equations regarding the questions) 1. The company manager targets to increase the current ratio in the year (2021) by 30% out of the previous year (2020), this requiring to increase the amount of the total current asset. To what level can the manager increase the total current asset to achieve this target (30%) at (2021)? (Suppose the other things are fixed) 2. The manager put a plan to increase the Time interest Earns (TIE) in the (2021) by (17%) out of the previous year (2020) to increase sales. How much will this plan to add amount to the accounts receivable (Suppose the other things are fixed) Data of 2020 Total Asset Turnover 2.5 Times Net Fixed Asset 600 (Thousand OMR) Total Liabilities 500 (Thousand OMR) Sales 2000 (Thousand OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) Long-term Liabilities 200 (Thousand…Phil plc and Costas plc are identical firms except that Costas is more levered. Both companies will remain in business for one more year. The economy is has recently been expanding. According to consensus forecasts, the probability of the continuation of the current expansion is 60% for the next year, and the probability of a recession is 40%. If the expansion continues, each firm will generate profit before interest and taxes of £2 million. If a recession occurs, each firm will generate profit before interest and taxes of £800,000. Phil’s debt obligation requires the firm to pay £750,000 at the end of the year. Costas’s debt obligation requires the firm to pay £1 million at the end of the year. Neither firm pays taxes. Assume a discount rate of 15 per cent. What is the market value of (i) Phil plc and (ii) Costas plc? a None of the above b (i) £1,321,739 and (ii) £1,153,435 c (i) £1,530,435 and (ii) £1,530,435 d (i) £1,321,739 and (ii) £1,321,739 e (i)…
- Phil plc and Costas plc are identical firms except that Costas is more levered. Both companies will remain in business for one more year. The economy is has recently been expanding. According to consensus forecasts, the probability of the continuation of the current expansion is 60% for the next year, and the probability of a recession is 40%. If the expansion continues, each firm will generate profit before interest and taxes of £2 million. If a recession occurs, each firm will generate profit before interest and taxes of £800,000. Phil's debt obligation requires the firm to pay £750,00 at the end of the year. Costas's debt obligation requires the firm to pay £1 million at the end of the year. Neither firm pays taxes. Assume a discount rate of 15 per cent. What is the market value of (i) Phil plc and (ii) Costas plc? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. None of the above b (i1) £1,321,739 and (i) £1,153,435 (1)…Soenen Inc. had the following data for 2012 (in millions). The new CFO believes that the company could improve its working capital management sufficiently to bring its net working capital and cash conversion cycle up to the benchmark companies' level without affecting either sales or the costs of goods sold. Soenen finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have increased? Original Data Related CCC Benchmarks' CCC Sales $108,000 Cost of goods sold $80,000 Inventory (ICP) $20,000 91.25 38.00 Receivables (DSO) $16,000 54.07 20.00 Payables (PDP) $5,000 22.81 30.00 122.51 28.00Beta-Juliet, a major manufacturer of carriages in Tibikeland, Verona has signed a partnership agreement with Disney which means from 2022 Beta-Juliet will be supplying first-class carriages to Disneyland. With the announcement of this news, Sophia, the CFO is expecting a steady revenue over the following years, therefore recommends an increase in their constant dividend rate to 12% as of 2022. After the first year, the end of 2022, the company's net income has increased to 100 million DD (DisneyDollars). The market price is 1000 DD and there are 1 million shares traded on the stock market. What is the dividend yield? Answer up to 3 decimal places.
- Nicholls Enterprises Pty Ltd has been selling software supplies for the past 20 years. The company’s product line has seen very little change in the past 5 years, and the company does not expect to add any new items for the foreseeable future. Last year, the company paid a dividend of $4.45 to its ordinary shareholders. The company is not expected to grow its revenues for the next several years. If your required rate of return for such companies is 13 per cent, what is the current value of this company’s shares?1. DPCL is a small-sized firm manufacturing hand tools. Its manufacturing plant is situated in Sohar. The company’s sales in the year ending December 2014 were OMR 1000 million on an asset base of OMR 650 million. The net profit of the company is OMR76 million. The management of the company wants to improve profitability further. The required rate of return of the company is 10%. The company is currently considering two investment proposals. One is to expand its production capacity. The estimated cost of the new equipment is OMR 250 million and has a life of 10 years. Forecasts of cash inflows would be OMR45 million per annum for the first 3 years, OMR 68 million from 4 to 8 years and OMR 30 million for the last 2 years. The plant can be sold for 55 million at the end of its economic life. The second proposal is to replace one of the old machines in Sohar to reduce the cost of operations. The new machine will cost OMR 50 million. The life of the machine is 10 years without any…1. DPCL is a small-sized firm manufacturing hand tools. Its manufacturing plant is situated in Sohar. The company’s sales in the year ending December 2014 were OMR 1000 million on an asset base of OMR 650 million. The net profit of the company is OMR76 million. The management of the company wants to improve profitability further. The required rate of return of the company is 10%. The company is currently considering two investment proposals. One is to expand its production capacity. The estimated cost of the new equipment is OMR 250 million and has a life of 10 years. Forecasts of cash inflows would be OMR45 million per annum for the first 3 years, OMR 68 million from 4 to 8 years and OMR 30 million for the last 2 years. The plant can be sold for 55 million at the end of its economic life. The second proposal is to replace one of the old machines in Sohar to reduce the cost of operations. The new machine will cost OMR 50 million. The life of the machine is 10 years without any…