FINANCIAL+MANAG.ACCT.
9th Edition
ISBN: 9781260728774
Author: Wild
Publisher: RENT MCG
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Textbook Question
Chapter 13, Problem 5BTN
ENTREPRENEURIAL DECISION A1 P1 P2 P3
BTN 13-7 Assume that Clara Harris of Morgan Stanley (MorganStanly.com) has impressed you with the company’s success and its commitment to ethical behavior. You learn of a staff opening at Morgan Stanley and decide to apply for it. Your resume is successfully screened from the thousands received and you advance to the interview process. You learn that the interview consists of analyzing the following financial facts and answering analysis questions below. (The data are taken from a small merchandiser in outdoor recreational equipment.)
| 2017 | 2016 | 2015 | |
| Sales trend percents | 137.0% | 125.0% | 100.0% |
| Selling expenses to sales | 9.8% | 13.7% | 15.3% |
| Sales to plant assets ratio | 3.5 to 1 | 3.3 to 1 | 3.0 to 1 |
| 2.6 to 1 | 2.4 to 1 | 2.1 to 1 | |
| Acid-test ratio | 0.8 to 1 | 1.1 to 1 | 1.2 to 1 |
| Merchandise inventory turnover | 7.5 times | 8.7 times | 9.9 times |
| 6.7 times | 7.4 times | 8.2 times | |
| Total asset turnover | 2.6 times | 2.6 times | 3.0 times |
| Return on total assets | 8.8% | 9.4% | 11.1% |
| Return on equity | 9.75% | 11.50% | 12.25% |
| Profit margin ratio | 3.3% | 3.5% | 3.7% |
Required
Use these data to answer each of the following questions with explanations.
- Is it becoming easier for the company to meet its current liabilities on time and to take advantage of any available cash discounts? Explain.
- Is the company collecting its accounts receivable more rapidly? Explain.
- Is the company’s investment in accounts receivable decreasing? Explain.
- Is the company’s investment in plant assets increasing? Explain.
- Is the owner’s investment becoming more profitable? Explain.
- Did the dollar amount of selling expenses decrease during the three-year period? Explain.
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CHAPTER 1
TEN-MINUTE QUIZ
Circle the letter of the best response.
1. The primary objective of financial reporting is to provide information
A. In an ethical manner.
B. To the professional accounting associations.
C. To people outside the company for making decisions.
D. Useful to managers in making daily decisions.
It is vital that company accountants and their auditors behave in a(n)
A. professional
2.
manner.
B. ethical
C. prudent
D. elitist
3. Which of the following statements is false?
A. The proprietorship form of business organization protects the personal assets of the
owners from creditors of the business.
B. A proprietorship has a single owner.
C. Accounting is the information system that measures business activities, processes that
information into reports, and communicates the results to decision makers.
D. The Accounting Standards Board sets the rules for how accounting is practised in
Canada.
4. Level…
Assume that you work for a Fortune 500 level company at corporate headquarters. Due to your excellent performance and the fact that the CEO of your firm noticed that you had listed on your resume' that you had taken a graduate-level Management Accounting course from a reputable institution, the CEO has sent you an email containing a request that you respond to two very important questions. The CEO needs your answers within a relatively short time frame of making the request.
The questions are:
#1. What criteria should the operating units (i.e. producing segments of the firm) use when deciding whether to use job-order costing or process costing approaches for costing the products they produce?
#2. For costs that cannot be traced, what tests should a cost allocation basis (not the cost allocation method) meet before that cost allocation basis (direct labor hours, machine hours, direct labor cost, etc.) can be used to allocate costs in the organization?
After completing your first degree in accounting you have been employed by XYZ Company as an account officer. The Management of the company has tasked you to implement a computerized accounting system.RequiredIn a paragraph each, address the following questions:a) Discuss five benefits associated with the implementation of the computerizedaccounting system within the company.b) Giventhattherearesomanyaccountingpackagesonthemarket,whatshouldyoube looking for when selecting a computerized accounting package for the company?Explain any five factors to considerc) Assuming you procure a Sales Ledger package, what kind of reports should weexpect? List five types of reports expected to be generated.d) Explainthedifferencebetweenastand-alonepackageandanintegratedpackage?Explain two advantaged and two disadvantages of an integrated packagee) Before a new accounting package can be deployed, it needs to be configured. What does it mean to configure an accounting package? Explain the processes…
Chapter 13 Solutions
FINANCIAL+MANAG.ACCT.
Ch. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Prob. 9QSCh. 13 - Prob. 10QS
Ch. 13 - Prob. 11QSCh. 13 - Prob. 12QSCh. 13 - Prob. 13QSCh. 13 - Prob. 14QSCh. 13 - Prob. 15QSCh. 13 - Prob. 16QSCh. 13 - Prob. 17QSCh. 13 - Prob. 18QSCh. 13 - Prob. 19QSCh. 13 - Prob. 20QSCh. 13 - Prob. 21QSCh. 13 - Prob. 22QSCh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Exercise 13-6 Common-size percents P2
Simon...Ch. 13 - Prob. 7ECh. 13 - Exercise 13-8 Liquidity analysis and...Ch. 13 - Exercise 13-9 Risk and Capital structure analysis...Ch. 13 - Exercise 13-10 Efficiency and Profitability...Ch. 13 - Exercise 13-11 profitability analysis P3 Refer to...Ch. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Problem 13-4A Calculation of financial statement...Ch. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Prob. 1PSBCh. 13 - Prob. 2PSBCh. 13 - Prob. 3PSBCh. 13 - Prob. 4PSBCh. 13 - Prob. 5PSBCh. 13 - Problem 13-6BAIncome statement computations and...Ch. 13 - Prob. 13SPCh. 13 - Prob. 1.1AACh. 13 - Prob. 1.2AACh. 13 - Prob. 1.3AACh. 13 - Prob. 2.1AACh. 13 - Prob. 2.2AACh. 13 - Prob. 2.3AACh. 13 - Prob. 3.1AACh. 13 - Prob. 3.2AACh. 13 - Prob. 3.3AACh. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Where on the income statement does a company...Ch. 13 - Prob. 1BTNCh. 13 - Prob. 2BTNCh. 13 - Prob. 3BTNCh. 13 - Prob. 4BTNCh. 13 - ENTREPRENEURIAL DECISION A1 P1 P2 P3 BTN 13-7...
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