Reagan Corporation is a wholesale distributor of truck replacement parts. Initial amounts taken from Reagan's records are as follows: Inventory at December 31 (based on a physical count of goods in Reagan's warehouse on December 31) $1,320,000 Accounts payable at December 31: Vendor Terms Amount Baker Company Charlie Company Dolly Company Eagler Company Full Company 28, 10 days, net 30 Net 30 Net 30 Net 30 $279,000 224,000 314,000 239,000 Net 30 Greg Company Net 30 Accounts payable, December 31 $1,056,000 Sales for the year $9,350,000 Additional Information: 1. Parts held by Reagan on consignment from Charlie, amounting to $190,000, were included in the physical count of goods in Reagan's warehouse and in accounts payable at December 31. 2. Parts totaling $29,000, which were purchased from Full and paid for in December, were sold in the last week of the year and appropriately recorded as sales of $35,00O. The parts were included in the physical count of goods in Reagan's warehouse on December 31 because the parts were on the loading dock waiting to be picked up by customers. 3. Parts in transit on December 31 to customers, shipped f.o.b. shipping point on December 28, amounted to $48,000. The customers received the parts on January 6 of the following year. Sales of $54,000 to the customers for the parts were recorded by Reagan on January 2. 4. Retailers were holding goods on consignment from Reagan, which had a cost of $280,000 and a retail value of $320,000. 5. Goods were in transit from Greg to Reagan on December 31. The cost of the goods was $32,000, and they were shipped f.o.b. shipping point on December 29.

What differential analysis and why would we use it?

Why do we ignore the residual value?

4.2    The following financial statements and additional information are reported.  IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets     Cash $ 104,500 $ 49,000 Accounts receivable, net 72,500 56,000 Inventory 68,800 94,000 Prepaid expenses 4,900 6,400 Total current assets 250,700 205,400 Equipment 129,000 120,000 Accumulated depreciation—Equipment (29,500) (11,500) Total assets $ 350,200 $ 313,900 Liabilities and Equity     Accounts payable $ 30,000 $ 37,500 Wages payable 6,500 16,000 Income taxes payable 3,900 4,800 Total current liabilities 40,400 58,300 Notes payable (long term) 35,000 65,000 Total liabilities 75,400 123,300 Equity     Common stock, $5 par value 230,000 165,000 Retained earnings 44,800 25,600 Total liabilities and equity $ 350,200 $ 313,900    IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 703,000 Cost of goods sold 416,000 Gross profit 287,000…