Loose-leaf for Fundamentals of Financial Accounting with Connect
5th Edition
ISBN: 9781259619007
Author: Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 13, Problem 10Q
Explain whether the following situations, taken independently, would be favorable or unfavorable: (a) increase in gross profit percentage, (b) decrease in inventory turnover ratio, (c) increase in earnings per share, (d) decrease in days to collect, and (e) increase in net profit margin.
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Explain whether the following situations, taken independently, would be favorable or unfavorable: ( a ) increase ingross profit percentage, ( b ) decrease in inventory turnoverratio, ( c ) increase in earnings per share, ( d ) decrease indays to collect, and ( e ) increase in net profit margin.
When is the forecasted growth rate in residual operating income the same as the forecasted growth rate in sales?
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Kindly answer the question with introduction and conclusion based on the concept of the question. Explain the answer properly considering the accounting aspect of it.
For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies:
a. In a period of falling prices, net income would be highest.
b. In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold.
c. In a period of rising prices, net income would be highest.
d. In a period of rising
prices, cost of goods sold would be highest.
e. In a period of rising prices, ending inventory would be highest.
Chapter 13 Solutions
Loose-leaf for Fundamentals of Financial Accounting with Connect
Ch. 13 - What is the general goal of trend analysis?Ch. 13 - Prob. 2QCh. 13 - What is ratio analysis? Why is it useful?Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Slow Cellars current ratio increased from 1.2 to...Ch. 13 - From last year to this year, Colossal Companys...Ch. 13 - From last year to this year, Berry Bam reported...Ch. 13 - Explain whether the following situations, taken...
Ch. 13 - What are the two essential characteristics of...Ch. 13 - Prob. 12QCh. 13 - Prob. 13QCh. 13 - Prob. 14QCh. 13 - Prob. 15QCh. 13 - Prob. 16QCh. 13 - 1. Which of the following ratios is not used to...Ch. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Analysts use ratios to a. Compare different...Ch. 13 - Which of the following ratios incorporates stock...Ch. 13 - Prob. 6MCCh. 13 - Prob. 7MCCh. 13 - A bank is least likely to use which of the...Ch. 13 - Prob. 9MCCh. 13 - (Supplement 13A) Which of the following items is...Ch. 13 - Calculations for Horizontal Analyses Using the...Ch. 13 - Calculations for Vertical Analyses Refer to M13-1....Ch. 13 - Interpreting Horizontal Analyses Refer to the...Ch. 13 - Interpreting Vertical Analyses Refer to the...Ch. 13 - Prob. 13.5MECh. 13 - Prob. 13.6MECh. 13 - Prob. 13.7MECh. 13 - Analyzing the Inventory Turnover Ratio A...Ch. 13 - Inferring Financial Information Using the Current...Ch. 13 - Prob. 13.10MECh. 13 - Identifying Relevant Ratios Identify the ratio...Ch. 13 - Prob. 13.12MECh. 13 - Analyzing the Impact of Accounting Alternatives...Ch. 13 - Describing the Effect of Accounting Decisions on...Ch. 13 - Prob. 13.1ECh. 13 - Prob. 13.2ECh. 13 - Prob. 13.3ECh. 13 - Computing Profitability Ratios Use the information...Ch. 13 - Prob. 13.5ECh. 13 - Matching Each Ratio with Its Computational Formula...Ch. 13 - Computing and Interpreting Selected Liquidity...Ch. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13ECh. 13 - Prob. 13.14ECh. 13 - Analyzing the Impact of Alternative Inventory...Ch. 13 - Prob. 13.1CPCh. 13 - Analyzing Comparative Financial Statements Using...Ch. 13 - Prob. 13.3CPCh. 13 - Prob. 13.4CPCh. 13 - Prob. 13.5CPCh. 13 - Prob. 13.6CPCh. 13 - Prob. 13.7CPCh. 13 - Prob. 13.1PACh. 13 - Analyzing Comparative Financial Statements Using...Ch. 13 - Prob. 13.3PACh. 13 - Prob. 13.4PACh. 13 - Interpreting Profitability, Liquidity, Solvency,...Ch. 13 - Using Ratios to Compare Loan Requests from Two...Ch. 13 - Prob. 13.7PACh. 13 - Prob. 13.1PBCh. 13 - Prob. 13.2PBCh. 13 - Prob. 13.3PBCh. 13 - Prob. 13.4PBCh. 13 - Interpreting Profitability, Liquidity, Solvency,...Ch. 13 - Using Ratios to Compare Loan Requests from Two...Ch. 13 - Prob. 13.7PBCh. 13 - Prob. 13.1SDCCh. 13 - Prob. 13.2SDCCh. 13 - Prob. 13.5SDCCh. 13 - Prob. 13.6SDCCh. 13 - Prob. 13.7SDCCh. 13 - Prob. 13.1CC
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- A decrease in Selling and Administrative Expenses woulddirectly impact what ratio?a. Fixed asset turnover ratio. c. Current ratio.b. Times interest earned. d. Gross profit percentage.arrow_forwardWhich one of the following is an advantage of LIFO? a. In periods of rising prices, less income taxes are paid b. In periods of rising prices, more holding gains are reported in net income c. Record keeping and financial statement preparation are easier d. Conservative income statement and balance sheet disclousures result from falling pricesarrow_forwardWhich of the following statements about the quality of earnings ratio is true? Multiple Choice Failure to accrue appropriate expenses will inflate net earnings and reduce the quality of earnings ratio. Failure to accrue appropriate expenses will inflate net earnings and increase the quality of earnings ratio. When sales are growing, receivables and inventory normally increase faster than payables so the ratio increases. Seasonal variations in sales have no impact on the quality of earnings ratio.arrow_forward
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- Gross profit will be​ the:  A. highest if LIFO is used and inventory costs are decreasing.  B. highest if FIFO is used and inventory costs are increasing.  C. lowest if LIFO is used and inventory costs are increasing.  D. all of the abovearrow_forwardDuring periods of rising prices, which method (FIFO-LIFO-AVCO) results in the highest gross profit? Why?arrow_forwardwhich one of the following will tend to increase the length of the credit period? Decrease in Product cost Decrease in consumer demand Decrease in collateral value Increase in credit risk Increase in product standardizationarrow_forward
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