s, which were 1% on the old sakes, would amount to 2% only on incremental sales. Variable Cost is 70% of sales. Maurice Corp. has a 10% receivable financing cost. Use 360 days per year. A. What is the Incremental Increase in
Q: Company ABC is preparing its 2021 financial statements. At the end of 2021, the company purchased a...
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question s...
Q: .ull Airtel TZ 3G 10:08 @ 12% I 4. The trial balance below was extracted from the books of CiciCaca ...
A: Hi student Since there are multiple questions, we will answer only first question.
Q: Knowledge Check 01 Select the correct term for the following types of users: Users Terms Customers P...
A: People who are outside the business entity and uses the business information to evaluate the perform...
Q: What is Declan's Designs' 2022 total "Common Stock Issuance" to be reported on its Statement of Cash...
A: The cash flow statement is prepared to record the cash flow from various activities during the perio...
Q: vidends of P1,500,000 was paid during the year and that no other transactions affected the retained ...
A: solution concept net income for the period =change in retained earnings + dividend paid
Q: rts B and C
A: Net income is the amount that is left over after the company has paid all its expenses including int...
Q: KC Company's Dec. 31, 2021 cash balance is P8,350,000 before possible adjustments for the following:...
A: Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a c...
Q: The following must be eliminated in the consolidation process except
A: Consolidation process means the merging of financial statements of parent and subsidiary entities an...
Q: INDUSTRIES reports the following patents on its December 31, 2019 statement of financial Useful Life...
A: An impairment loss is the amount by which an asset's or cash-generating unit's carrying value exceed...
Q: A company has an operating leverage factor of 4. When its sales increase to P500,000, its profit bef...
A: solution given Operating leverage 4 Variable cost ratio 40% Fixed cost ? Whe...
Q: Job 123 was recently completed by BudolBudol Me Corporation. The following data have been recorded o...
A: The job cost is used to estimate the individual cost of the product. It includes both direct and ind...
Q: The R Company acquired an equipment on January 1, 2016 at a cost of P900,000, depreciating it over 8...
A: Working Note :- Particulars Amount P Amount P Cost of equipment Jan 1 , 2016...
Q: Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For th...
A: Declan Design Cash Flow Statement (Partial) For the year ended December 31, 2022 Amount (In...
Q: rkspur Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lea...
A: Solution: To compute Amount of equal annual lease payments we first need to be compute present value...
Q: Finch Services Company has 54 employees, 33 of whom are assigned to Division A and 21 to Division B....
A: Fringe benefits cost allocated to Division A = Total Fringe benefits cost x No. of employees in Divi...
Q: changes with the type of company is:
A: Balance Sheet is the statement showing financial position of the busi...
Q: The following details are found in the incomplete bank reconciliation statement of Phillip Company f...
A: Bank reconciliation statement is prepared to reconcile cash balance as per cashbook and bank balance...
Q: YES Partnership started operations on January 1, 201 balances : with the following capital Yves P88,...
A: Note: As per our guidelines only the first three subparts will be solved A. Profit/(Loss) to be sh...
Q: Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS Current Assets For the Year ...
A: The dividend is declared to the shareholders from the retained earnings of the business.
Q: An analysis of the cash book and other records of Byle Corporation shows the following data: Account...
A: The income statement is prepared to record the revenues and expenses of the current period. The inco...
Q: You are assigned to perform a review of minutes of meeting for the year end audit ending December 31...
A: Since, we only answer one question, we will answer the first question. Please resubmit the question ...
Q: An employee is about to receive the sum of P300.00 at the end of each year for 5 years.One year prio...
A: given An employee is about to receive the sum of P300.00 at the end of each year for 5 years. One ...
Q: an auditor finds any misstatements or deviations in planned procedures: a. the auditor should not re...
A: When an auditor finds any misstatements or deviations in the financial statements then the auditor h...
Q: How does Accounts Payable impact Declan's Designs' 2022 Statement of Cash Flows?
A: Accounts payable form part of working capital of a company. Therefore, a change (increase or decreas...
Q: Problem #4 Froilan Labausa contributed land, inventory and P 280,000 cash to a partnership. The land...
A: Hi student Since there are multiple questions, we will answer only first question.
Q: The following information was included in the bank reconciliation for Phillip Company for October an...
A: The calculation is given below.
Q: Concept Review 3.4- Future Value of a Tax Savings Please turn to page 152 of the text and complete ...
A: How muche is taxes saving for current year?
Q: Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For th...
A: Interest payable is a current liability. Increase or decrease in current liabilities affect the "Cas...
Q: An analysis of the cash book and other records of Bye Corporation shows the following data: Accounts...
A: The income statement is one of the financial statements of the business which represents the profita...
Q: TAARE ZAMEENPAR Company reported the following changes in the account balances for the current year,...
A: Stockholders' equity: Stockholders' equity means the net assets available to shareholders after dedu...
Q: 1. Lower of cost or market is used to value inventories. Choices: a. Full disclosure principle b. Ti...
A: As per The conservatism principle/constraint ignore all anticipated profit and provide for all possi...
Q: Baird Construction Company expects to build three new homes during a specific accounting period. The...
A: Activity based costing is a type of costing under which all type of indirect costs and overhead cost...
Q: Menlo Company distributes a single product. The company's sales and expenses for last month follow: ...
A: Since you have posted a question with multiple sub-parts , we will do the first three sub-parts for ...
Q: The following were taken from the records of LML Co. as of December 31, 2010: • Checks drawn but not...
A: The transactions till December 31 , 2010 cash will be included in LML's December , 2010 cash. Custom...
Q: Question 1: What is the correct amount of accounts payable to be presented in the statement of finan...
A: The question pertains to determining the correct current and non current liabilities of the BeCarefu...
Q: eal Leasing Company agrees to lease equipment to Flint Corporation on January 1, 2020. The following...
A: Economic Life 8 Fair Value $406000 Guaranteed Residual Value $36300 Cost P...
Q: During the review of loan contracts and agreements, the auditor would most likely figure out the fol...
A: Answer: The responsibility of auditor is to test the assertions with respect to the financials items...
Q: A. The existence of loans. B. The completeness of loans. C. Related disclosures pertaining to asse...
A: Assertions are claims made by the management of the company which are further verified by the audito...
Q: Which of the following agendas would least likely affect the total liabilities of the entity?
A: On review of the agenda of the minutes of the meeting, and the choices given in the question, there ...
Q: How do Dividends Paid impact Declan's Designs' Statement of Cash Flows? Question 30 options: ...
A: Financing Activities - All the issues and purchases of shares, Payment of Dividends, Issuance, and r...
Q: KK Corporation is analyzing its option to restrict its credit terms. Current sales level is P6,000,0...
A: solution given For current Current sales level =P6,000,000 average receivables bala...
Q: XYZ company has the following Information: Sales Revenue: 60000S, Expenses: 80000S. Required Recordi...
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized i...
Q: hould an organization take a discount of 1.5/10 N/30 on a $9,000 invoice or simply pay the bill when...
A: solution concept credit term 1.5/10 N/30 It means that if the payment is made within 10 d...
Q: On January 1, 2017, Sarasota Corp. signs a 5-year noncancelable lease agreement to lease a backhoe f...
A: Maximum annual lease payments = Equal rental payment - Executory cost ...
Q: Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The...
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for yo...
Q: ABC COMPANY made the following cash expenditures during 2009 related to development of a new plastic...
A: The question is related to Accounting for Intangible Assets. As per the Standard the development of ...
Q: Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution form...
A: Operating leverage is used to measure the degree to which the firm can increase its operating income...
Q: Jude, with a monthly salary of Php. 24,000.00, is an employee of Gomez Corp. He was on leave for one...
A: Taxable income is the income on which taxable liability is calculated. It includes the total income ...
Q: Accounts payable subsidiary ledger. Purchase journal 15 days before and 15 days after report date. ...
A: Assertions are claims made by the management of the company which are further verified by the audito...
Q: The December 31, 2021 and 2020 comparative financial statements of Galley Company showed equipment w...
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage a...
Step by step
Solved in 3 steps
- Pedro Corp. currently has sales of P2,000,000, and its days sales outstanding is 2 week. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, bad debts losses, which were 1% on the old sales, would amount to 2% only on incremental sales. Variable cost is 70% of sales. Pedro Corp. has a 10% receivable financing cost. Use 360 days per year. a. What is the incremental increase in the balance of AR? b. What is the Change in carrying cost? Indicate if an increase or decrease c. What would the annual incremental pre-tax profit be if Pedro Corp. extended its credit period?Pedro Corp. currently has sales of P2,000,000, and its days sales outstanding is 2 week. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, bad debts losses, which were 1% on the old sales, would amount to 2% only on incremental sales. Variable cost is 70% of sales. Pedro Corp. has a 10% receivable financing cost. Use 360 days per year, What is the incremental increase in the balance of AR? What is the Change in carrying cost? Indicate if an increase or decrease? What would the annual incremental pre-tax profit be if Pedro Corp. extended its credit period?Edgar Corp. currently has sales P2,000,000, and its days sales outstanding is 2 weeks. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, Bad Debts losses, which were 1% on the old sales, would amount to 2% only on incremental sales. Variable Cost is 70% of sales. Pedro Corp. has a 10% receivable financing cost. Use 360 days per year. Explain each item. A. What is the Incremental Increase in the balance of AR? (Format: 11,111.11) B. What is the Change in carrying cost? Indicate if it is an Increase or Decrease. (Format: 1,111.11 I or 11,111.11 D) C. What would the Annual Incremental Pre-tax Profit be if Edgar Corp. extended its credit period? (Format: 111,111.11)
- A manufacturer currently prices its product at 10 TL per unit. Last year, the manufacturer sold 60.000 units. The variable cost per unit is 6 TL. Total fixed costs are 120.000 TL. The manufacturer intends to increase sales by 5%. Current accounts receivable collection period is 30 days. If the manufacturer wants to relax its credit standards, the expectation is that bad debt expenses will increase from 1% of sales to 2% of sales. The opportunity cost of investing in accounts receivables is 15%. In order to benefit from relaxing its credit standards, what would be the expected maximum accounts receivable collection period? (Assume that existing customers are not expected to alter their payment habits. 1 year = 365 days) a) 82,38 days b) 63,33 days c) 105,82 days d) 63,73 dayse) otherABC & Company is making sales of Rs.16,00,000 and it extends a credit of 90 days to it's customers. However, in order to overcome the financial difficulties, it is considering to change the credit policy. The firm has variable cost of 80% and fixed cost of Rs.1,00,000. The cost of capital is 15%. Evaluate different policies and which policy should be adopted? The proposed terms of credit and expected sales are given hereunder: Policy I II III Terms 75 days 60 days 45 days Sales Rs.15,00,000 Rs. 14,50,000 Rs 14,25,000ABC Corp currently has sales of P1,000,000 and its DSO is 30 days, the financial manager estimates that offering longer credit terms would increase the days sales outstanding to 50 days and increase the sales to P1,200,000. However, bad debt losses, which were 2% on the old sales, would amount to 5% only on the incremental sales. Variable costs are 80% of sales; ABC Corp. has a 15% receivable financing cost. (360 day/year) What would the annual incremental pre-tax profit be if ABC Corp. extended its credit period?
- ABC & Company is making sales of Rs.16,00,000 and it extends a credit of 90 days to it's customers. However, in order to overcome the financial difficulties, it is considering to change the credit policy. The firm has variable cost of 80% and fixed cost of Rs.1,00,000. The cost of capital is 15%. Evaluate different policies and which policy should be adopted?ABC Inc. currently sells P12,000,000 per annum. Its credit period and DSO are both 30 days, and 1.5% of its sales end up as bad debts. The credit manager estimates that if the firm extends Its credit period to 40 days so that its DSC increases to 40 days, sales will increase by P3,000,000 but their bad debts losses on the incremental sales will be 2.5%. Variable costs are 60%, and the cost of carrying receivables is 10%. Tax rateis 40%. (Assume 360 days per year). Compute the incremental Investment required to finance the increase in receivables if the change is implemented. What would be the Incremental cost of carrying receivables?Kitchen Enterprises is evaluating a proposal to lengthen its credit period from 30 to 45 days. All customers will continue to pay on the net date. Currently, credit sales are $650,000 and variable costs are $455,000. The selling price is $20 per unit. The proposal is expected to lead to credit sales of $710,000. However, bad debts are expected to increase from 1% to 2% of sales. The required rate of return on equal-risk investments is 16.5%. (Note: Assume a 365-day year.) 1) Calculate the additional profit contribution from sales if the proposal is implemented. 2) Calculate the cost of the marginal bad debts. 3) Should the proposal be implemented? Explain.
- Zed’s Textiles currently has Credit Sales of $360 million per year and an Average Collection Period of 60 days. Assume that the price of Zed’s products is $60 per unit and that the Variable Costs are $55 per unit. The firm is considering accounts receivable changes that will result in a 20% increase in sales and a 20% increase in the Average Collection Period. No change in Bad Debts is expected. The firm’s equal-risk Opportunity Cost on its investment in Accounts Receivable is 14%. (Note: Use a 365-day year) A. Calculate the Additional Profit Contribution from sales that the firm will realize if it makes the proposed change. (Format: 1,111,111) B. What Marginal Investment in Accounts Receivable will result? (Format: 1,111,111) C. Calculate the Cost of the Marginal Investment in Accounts Receivable. (Format: 1,111,111)SHE CO. currently has annual sales of P2,000,000. Its average collection period is 40 days, and bad debts are 5 percent of sales. The credit and collection manager is considering instituting a stricter collection policy, whereby bad debts would be reduced to 2 percent of total sales, and the average collection period would fall to 30 days. However, sales would also fall by an estimated P250,000 annually. Variable costs are 60 percent of sales and the cost of carrying receivables is 12 percent. Assume a tax rate of 40 percent and 360 days per year. What would be the incremental investment in receivables if the change were made?Tara’s Textiles currently has credit sales of $360 million per year and an average collection period of 60 days. Assume that the price of Tara’s products is $60 per unit and that the variable costs are $55 per unit. The firm is considering an accounts receivable change that will result in a 20% increase in sales and a 20% increase in the average collection period. No change in bad debts is expected. The firm’s equal-risk opportunity cost on its investment in accounts receivable is 14%. (Note: Use a 365-day year.) Calculate the additional profit contribution from sales that the firm will realize if it makes the proposed change. What marginal investment in accounts receivable will result? Calculate the cost of the marginal investment in accounts receivable. Should the firm implement the proposed change? What other information would be helpful in your analysis?