Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 13, Problem 12E
To determine
(a)
Introduction:
The impact of sale of long-term assets for cash on the current ratio.
To determine
(b)
Introduction:
Current ratio is the ratio of current assets to current liabilities. An ideal current ratio is 2:1. It is a part of the liquidity ratio that measures the ability of a firm to pay off its short-term obligations.
The impact of accrued severance pay for terminated employees on the current ratio.
To determine
(c)
Introduction:
Current ratio is the ratio of current assets to current liabilities. An ideal current ratio is 2:1. It is a part of the liquidity ratio that measures the ability of a firm to pay off its short-term obligations.
The impact of writing down the value of certain inventory items that were deemed to be obsolete on the current ratio.
To determine
(d)
Introduction:
Current ratio is the ratio of current assets to current liabilities. An ideal current ratio is 2:1. It is a part of the liquidity ratio that measures the ability of a firm to pay off its short-term obligations.
The impact of acquiring new inventory by signing an 18 months promissory note on the current ratio.
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In its most recent annual report, Sunrise Enterprises reported current assets of $1,090,000 and current liabilities of $602,000.Required:Determine for each of the following transactions whether the current ratio, and each of its twocomponents, for Sunrise will increase, decrease, or have no change: (1) sold long-term assets forcash, (2) accrued severance pay for terminated employees, (3) wrote down the carrying value ofcertain inventory items that were deemed to be obsolete, and (4) acquired new inventory by signingan 18-month promissory note (the supplier was not willing to provide normal credit terms).
The Kelly Services, Inc., and subsidiaries partial statement s of earnings from its annual report are presented below.
2020
2019
Revenues from services
4314.8
5517.3
Cost of services
3613.1
4539.7
Gross Profit
701.7
977.6
Selling and administrative expense
794.7
967.4
Asset impairments
53.1
80.5
Net earnings (loss)
(164.1)
(70.3)
Prepare a horizontal common size analysis, and comment on the trend.
Presented below is information related to Blossom Company at December 31, 2020, the end of its first year of operations.
Sales revenue
$322,170
Cost of goods sold
138,320
Selling and administrative expenses
51,700
Gain on sale of plant assets
30,260
Unrealized gain on available-for-sale debt investments
9,200
Interest expense
5,820
Loss on discontinued operations
12,220
Dividends declared and paid
4,580
Compute the following:
(a)
Income from operations
$enter a dollar amount
(b)
Net income
$enter a dollar amount
(c)
Comprehensive income
$enter a dollar amount
(d)
Retained earnings balance at December 31, 2020
$enter a dollar amount
Chapter 13 Solutions
Managerial Accounting
Ch. 13 - Prob. 1QCh. 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 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q
Ch. 13 - Prob. 1MCCh. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - Prob. 7MCCh. 13 - Prob. 8MCCh. 13 - Prob. 9MCCh. 13 - Prob. 1MECh. 13 - Prob. 2MECh. 13 - Prob. 3MECh. 13 - Prob. 4MECh. 13 - Prob. 5MECh. 13 - Prob. 6MECh. 13 - Prob. 7MECh. 13 - Prob. 8MECh. 13 - Prob. 9MECh. 13 - Prob. 10MECh. 13 - Prob. 11MECh. 13 - Prob. 12MECh. 13 - Prob. 13MECh. 13 - Prob. 14MECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Computing and Interpreting Liquidity Ratios...Ch. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Analyzing the Impact of Selected Transactions on...Ch. 13 - Prob. 15ECh. 13 - Prob. 1.1GAPCh. 13 - Prob. 1.2GAPCh. 13 - Prob. 2.1GAPCh. 13 - Prob. 2.2GAPCh. 13 - Prob. 2.3GAPCh. 13 - Prob. 2.4GAPCh. 13 - Prob. 2.5GAPCh. 13 - Prob. 2.6GAPCh. 13 - Prob. 2.7GAPCh. 13 - Prob. 2.8GAPCh. 13 - Prob. 3.1GAPCh. 13 - Prob. 3.2GAPCh. 13 - Prob. 3.3GAPCh. 13 - Prob. 4.1GAPCh. 13 - Prob. 4.2GAPCh. 13 - Prob. 4.3GAPCh. 13 - Prob. 5.1GAPCh. 13 - Prob. 5.2GAPCh. 13 - Prob. 5.3GAPCh. 13 - Prob. 5.4GAPCh. 13 - Prob. 6.1GAPCh. 13 - Prob. 6.2GAPCh. 13 - Prob. 7GAPCh. 13 - Prob. 1.1GBPCh. 13 - Prob. 1.2GBPCh. 13 - Prob. 2.1GBPCh. 13 - Prob. 2.2GBPCh. 13 - Prob. 2.3GBPCh. 13 - Prob. 2.4GBPCh. 13 - Prob. 2.5GBPCh. 13 - Prob. 2.6GBPCh. 13 - Prob. 2.7GBPCh. 13 - Prob. 2.8GBPCh. 13 - Prob. 3.1GBPCh. 13 - Prob. 3.2GBPCh. 13 - Prob. 3.3GBPCh. 13 - Prob. 4.1GBPCh. 13 - Prob. 4.2GBPCh. 13 - Prob. 4.3GBPCh. 13 - Prob. 5.1GBPCh. 13 - Prob. 5.2GBPCh. 13 - Prob. 5.3GBPCh. 13 - Prob. 5.4GBPCh. 13 - Prob. 6.1GBPCh. 13 - Prob. 6.2GBPCh. 13 - Prob. 7GBP
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