to divest of this business, Walmart will record a non-cash loss of approximately $1 billion, after tax, in the third quarter of fiscal 2021 What impact will this have on the fiscal 2021 earnings quality? Question 29 options: a) Weakens due to substance issues b) Strenthens due to substance issues c) Strengthens due to sustainabilit
Q: Referring to the following data of the Omani Company, that extracted from the balance sheet at…
A: Accounting ratios, an important sub-set of financial ratios, are a group of metrics used to measure…
Q: Due to years of poor management, Shao Inc. had $350 million in Deferred Tax Asset due to NOL…
A: The correct answer is NET INCOME
Q: Which of the following is an example of managing earnings down? Select one: O a. Revising the…
A: For managing earning down , we need to increase our expenses or reduce our income so that earning…
Q: Botticelli Inc. was organized in late 2018 to manufacture and sell hosiery. At the end of its fourth…
A:
Q: MarineCo has no debt but does have unfunded pension liabilities valued at $200 million, recorded as…
A: Enterprise value (EV) is a more complete estimate of a company's entire value than equity market…
Q: Laguna Grill a chain of seafood restaurants. On September 1, 2018, Laguna Grill determined that it…
A: On 01.09.2018, Laguna Grill needs to purchase tuna fish on 01.01.2020 = 100000 kilos Forward…
Q: Utilize the 2019 financial statements for Micron Industries provided on page 1 and assume that the…
A: Notes payable will not be vary directly with sales/revenue. Because the notes payable is non trade…
Q: Advertising expense was not included in the above. Based on market study in December 2019, the…
A: Operating income of the business can be calculated by reducing fixed costs and variable costs, from…
Q: SMS Leasing Corporation has numerous lessees in its different commercial establishments in Metro…
A: Debt restructuring means changing the terms and conditions of the debt which results a gain or the…
Q: Gain on extinguishment of 3-year 10% P1 million mortgage note to be recognized in profit or loss in…
A: The company was not able to pay the creditor as of 12/31/2022 and arranged restructuring with its…
Q: Ross Enterprises has a contract with Big Steel Company Limited in respect of Information Technology…
A: IRAC method: The framework of legal analysis known as "Issue, Rule, Application, and Conclusion" is…
Q: New Orders Ltd (NOL) is a retailer of electronics appliances operating in Hong Kong. During its…
A: Restructuring plan - It is an action plan taken by the company by way of significantly modify…
Q: Laguna Grill to purchase 100, 000 kilos of tuna fish on January 1, 2020 at a price of P8,000,000 or…
A: Forward contract is a financial derivative contract between two parties where they mutually agree to…
Q: The directors of Woodbank Ltd are anxious to improve the profit to be reported for the accounting…
A: If The company want to improve its reported profit, either reduce its expenses or increase earnings…
Q: 2% are likely to be uncollectible. The company will also incur P21,000 in additional collection…
A: As each customer a/c balance cannot be shown in financials, the Accounts Receivables account is used…
Q: The Board of Directors were worried over the dwindling financial performance and precarious…
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: In a given year, Irish Company decreased its inventory by P250,000, purchased P350,000 worth of…
A: Increase (decrease) in cash = Loan taken - purchase of fixed assets + decrease in inventory
Q: AJ Ventures Ltd is a company engaged in the manufacture of water bottles which are bought mainly for…
A: This case has two questions. The first has been solved below.
Q: The board of directors of Bibiko Inc. decided on December 15, 2021, to wind up international…
A: Restructuring means that company changes form of the operations like the change in the capital…
Q: Rode Inc. incurred a net operating loss of $500,000 in 2017. Combined income for 2015 and 2016 was…
A: Prepare the journal entry to record the loss carry back:
Q: A firm has just ended its calendar year making a sale in the amount of P250,000 of merchandise…
A: The cash flow from the sale is the total cost of the merchandise which is yet to be collected at…
Q: What will be the financial effect if this instruction is fulfilled. Explain using PM, ROA
A: If 2% is saved in purchasing, cost of goods sold will go down by 2% to $4.75M*(0.98) =$4.655M Profit…
Q: Krogh Lumber's 2019 financial statements are shown here. a. Assume that the company was operating…
A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…
Q: Laguna Grill a chain of seafood restaurants. On September 1, 2018, Laguna Grill determined that it…
A: Forward contract is a financial derivative contract between two parties where they mutually agree to…
Q: The company manager targets to reduce the current ratio in the year (2020) by 33% from the previous…
A: A liquidity ratio that helps to evaluate the capability of a company to pay off its short-term…
Q: Kerrigan Corporation announced on November 1, 2021 that company's CEO has been terminated and that…
A: Kerrigan Corporation is facing a decrease in profits over the last several years. The company has…
Q: Helen Company's directors decided on November 1, 2011 to restructure the entity's operations as…
A: Recognition in Restructuring Provision Most of Entity to decide the Restructure provision due to…
Q: FINANCIAL STATEMENTS AND TAXES Part I of this case, presented in Chapter 3, discussed the situation…
A: As per rule, allowed to answer first three subparts and post the remaining in the next submission.
Q: In 2021, due to a change in marketing forecasts, Barney Corporation reduced the projected life of…
A: As per IAS 8 Accounting policies, Changes in accounting estimates and Errors A change is…
Q: d over the dwindling financial performance and precarious financial position of the Company. The…
A: Debt to equity ratio refers to the ratio which reflects the capacity of the company to finance or…
Q: (a) faced tough situation to sustain their financial cash flow. During the first quarter of 2021,…
A: Month Sales(RM) Purchases(RM) August 1,500,000 960,000 (60%*1,600,000) September 1,600,000…
Q: laguna grill a chain of seafood restaurants. on september 1, 2018, laguna grill determined that it…
A: On 01.09.2018, Laguna Grill will need to purchase 100000 kilos of tuna fish on 01.01.2020. It…
Q: Required a. The calculation of break-even sales value based on the 2020 results. b. A financial…
A: Hi! Thank you for the question. As per the honor code, We are allowed to answer three sub-parts at a…
Q: Ross Enterprises has a contract with Big Steel Company Limited in respect of Information Technology…
A: In the event that take a goose at the given realities and also the varied circumstances introduced…
Q: Oakdale Fashions, Inc.’s, 2021 income statement is reported below. Oakdale Fashions, Inc.,…
A: The corporate tax rate is the tax to be paid by the corporations on their earnings. The corporate…
Q: Leland Industries is a producer of bakery and snack goods in Western Canada and are considering…
A: Note : Hi! Thank for the question , As per the honor code, we are allowed to answer three sub -parts…
Q: financial evaluation of proposal (iii)
A:
Q: Wool company actual earnings for the first two quarters of 2019 and its estimate during each quarter…
A: The question is based on the concept to find the annualized income tax installment method . The tax…
Q: Leland Industries is a producer of bakery and snack goods in Western Canada and are considering…
A: Here, Details of Debt: Par Value of Bond is $1,000 Present value of Bond is $925.6 Coupon rate of…
Q: The Board of Directors is dissatisfied with last year's ROE of 15%. If the profit margin and asset…
A: GIVEN The Board of directors is dissatisfied with last year's ROE of 15%.If the profit margin and…
Q: Prophet Company signed a long-term purchase contract to buy timber from the U.S. Forest Service at…
A: Ethical issues arise when some circumstances, events or actions result in a conflict with generally…
Q: · The company manager targets to reduce the current ratio in the year (2020) by 33% from the…
A: Current ratio is a liquidity measure which measures the ratio of current assets to current…
Q: What amount should be booked as adjustment to the loss of the company?
A: Adjustment to loss of company can be defined as the situation when the expenses incurred are more…
Q: Advertising expense was not included in the above. Based on market study in December 2019, the…
A: Formula: Net Income = Total Revenues - Total expenses.
Walmart Inc. recently announced an agreement to sell their retail operations in Argentina. Due to this decision to divest of this business, Walmart will record a non-cash loss of approximately $1 billion, after tax, in the third quarter of fiscal 2021
What impact will this have on the fiscal 2021 earnings quality?
Question 29 options:
|
|
||
|
|
||
|
|
||
|
|
Step by step
Solved in 3 steps
- e) The recession in the economy in 2021 is expected to result in a reduction of the number of units sold.Assuming that Greek is operating at normal capacity, by how much can sales decline in units and salesdollars in 2021 without the company making a loss?f) The President of Greek Manufacturing is under pressure from shareholders to increase operatingincome by 30% in 2021. Management expects per unit data and total fixed costs to remain the same in2021. Using the equation method, compute the number of units that would have to be sold in 2021 toreach the shareholders desired profit level. Is this a realistic goal?g) Greek’s management team is concerned about the selling expenses associated with the product andwants to reduce the variable selling expense per unit by 30%, which will see a simultaneous reduction inthe total fixed selling expenses by $30,000. If they are able to accomplish this feat, it is expected thatsales volume for the year will fall by 16⅔% below normal capacity. What…Use this problem to answer the following requirements: Mabuhay Corporation generated these gross profits during the past recent ears when the sales price was 10% lower during 2020 compared to 2019. 2020 Sales P1,944,000; 2020 Cost of Sales P1,152,000; 2019 Sales P1,900,800; 2019 Cost of Sales P1,113,600. The decrease in gross profit due to decrease in selling price must beGreek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business eamed Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit.. Production Costs: Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead.. Fixed Selling & Administrative Expenses.. Variable selling expense per unit $50.00 $10.00 $8.00 $7.00 $450,000 $300,000 $10.00 Required:
- Kerrigan Corporation announced on November 1, 2021 that company's CEO has been terminated and that James McCabe will become the company's new CEO. Kerrigan has had decreasing income over the last several of years. McCabe will be responsible for improving Kerrigan's future performance. What earnings management technique will the company probably utilize as a result of hiring a new CEO? Question 30 options: a) Increase cookie jar reserves b) Big Bath c) Accelerate current period revenues into future periods d) Accelerating future period expenses into the current periodVarious Contingency Issues Skinner Company has the following contingencies: 1. Potential costs due to the discovery of a possible defect related to one of its products. These costs are probable and can be reasonably estimated. 2. A potential claim for damages to be received from a lawsuit filed this year against another company. It is probable that proceeds from the claim will be received by Skinner next year. 3. Potential costs due to a promotional campaign in which a cash refund is sent to customers when coupons are redeemed. Skinner estimated, based on past experience, that 70% of the coupons would be redeemed. Forty percent of the coupons were actually redeemed and the cash refunds sent this year. The remaining 30% of the coupons are expected to be redeemed next year. Required: 1. How should Skinner report the potential costs due to the discovery of a possible product defect? Explain why. 2. How should Skinner report this year the potential claim for damages that may be received next year? Explain why. 3. This year, how should Skinner account for the potential costs and obligations due to the promotional campaign?FINANCIAL STATEMENTS AND TAXES Part I of this case, presented in Chapter 3, discussed the situation of D’Leon Inc., a regional snack foods producer, after an expansion program. D’Leon had increased plant capacity and undertaken a major marketing campaign in an attempt to “go national.” Thus far, sales have not been up to the forecasted level, costs have been higher than were projected, and a large loss occurred in 2018 rather than the expected profit. As a result, its managers, directors, and investors are concerned about the firm’s survival.Donna Jamison was brought in as assistant to Fred Campo, D’Leon’s chairman, who had the task of getting the company back into a sound financial position. D’Leon’s 2017 and 2018 balance sheets and income statements, together with projections for 2019, are given in Tables IC 4.1 and IC 4.2. In addition,Table IC 4.3 gives the company’s 2017 and 2018 financial ratios, together with industry average data.The 2019 projected financial statement data…
- (a) faced tough situation to sustain their financial cash flow. During the first quarter of 2021, the revenue of Denai Holdings has decreased tremendously, therefore, the company decided to have a board meeting in next month. The following is a projected sales of Denai Holdings for the third and fourth quarter of 2021: The global economic has been affected by Covid19 pandemic and the businesses Month Sales (RM) 1,500,000 August September 1,600,000 1,650,000 1,630,000 2,109,000 October November December Additional information: (1) The company is able to makes 20 percent cash sale, 50 percent will be collected in the month following sales and 30 percent will be collected in the second month following sales. (ii) Every end of quarter, the firm will receive a dividend of RM2,850 from investment in property. (iii) Purchases are 60 percent of sales. 42 percent of purchases are paid one month before the sales occur and the remaining balance paid in the following month. (iv) The company pays…Quyox Sdn Bhd manufactures a special toy called Omma that are sold through a network of sales agents throughout Malaysia. The company sold 67,500 units of Omma in 2022 with equivalent to sales amounting to RM1,350,000. The sales agents are currently paid at 15% commission on sales. The following is the pro forma (projected) statement of profit or loss and other comprehensive income for the year ended 31 December 2022. Qu Yox Sdn Bhd Pro Forma Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2022 Sales Cost of Goods Sold: Variable Fixed Gross Profit Operating expenses: Sales Commision Fixed Advertising Expenses General and Administrative Expenses: Rental expenses Administrative Salaries Expenses Insurance Expenses Net Income 675,000 135,000 202,500 33,750 27,000 67,500 20,250 1,350,000 810,000 540,000 351,000 189,000Ross Enterprises has a contract with Big Steel Company Limited in respect of Information Technology (IT) Services. The contract was signed on January 1st 2020 and will be effected on the 1st April 2020. In mid-February 2020 Big Steel’s sales plummeteddue to the Covid 19 pandemic. In addition, an already high long term debt, and operating cost, as well as Big Steel’s currentnegative cash flows situation placed the company in serious financialperil. Indeed if they cannot find a resolution soon to deal with their cash flow problems and debt, they will have to close operations permanently and send all employees home. Upon hearing this pronouncement, the Trade Union representing workers at Big Steel advised management that they will take strike action. This further affected the operations of Big Steel and resulted in a loss of production, sales and the much-needed cash flows, which is critical to pay off their debt and meet current fixed operating cost. On 3rd March 2016, Big Steel…
- AJ Ventures Ltd is a company engaged in the manufacture of water bottles which are bought mainly for sporting activities. Present sales are direct to retailers, but in recent years there has been a steady decline in output because of increasing foreign competition. In the last business year (2020) the company produced its lowest profit in ten (10) years. The forecast for 2021 indicates that the present deterioration in profits is likely to continue. The company considers that a profit of $80,000 should be achieved to provide an adequate return on capital. The managing director has asked that a review be made of the present pricing and marketing policies. The marketing director has completed this review, and passes the proposals on to you for evaluation and recommendation, together with the Income statement for the year ending December 31, 2020 (see below). AJ Ventures limited. INCOME STATEMENT For the Year Ending, December 31, 2020 Sales Revenue (100,000 Bottles at $10)…AJ Ventures Ltd is a company engaged in the manufacture of water bottles which are bought mainly for sporting activities. Present sales are direct to retailers, but in recent years there has been a steady decline in output because of increasing foreign competition. In the last business year (2020) the company produced its lowest profit in ten (10) years. The forecast for 2021 indicates that the present deterioration in profits is likely to continue. The company considers that a profit of $80,000 should be achieved to provide an adequate return on capital. The managing director has asked that a review be made of the present pricing and marketing policies. The marketing director has completed this review, and passes the proposals on to you for evaluation and recommendation, together with the Income statement for the year ending December 31, 2020 (see below). AJ Ventures limited. INCOME STATEMENT For the Year Ending, December 31, 2020 Sales Revenue (100,000 Bottles at $10)…How would answer this question? You are estimating your company's external financing needs for the next year. Your first-pass pro forma financial statements showed a large financing deficit for next year. Which of the following changes to your company's operating plan would reduce the financing deficit if incorporated in revised pro forma financial statements? None of the options are correct. Increase cost of goods sold as a percentage of sales Increase the dividend payout ratio Increase the sales growth rate Reduce the collection period