Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 3, Problem 3C
To determine
Mention the accounting policies and
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Picasso Company is a wholesale distributor of packaging equipment and supplies. The company's sales have averaged about $900,000 annually for the 3-year period 2018–2020. The firm's total assets at the end of 2020 amounted to $850,000.
The president of Picasso Company has asked the controller to prepare a report that summarizes the financial aspects of the company's operations for the past 3 years. This report will be presented to the board of directors at their next meeting.
In addition to comparative financial statements, the controller has decided to present a number of relevant financial ratios which can assist in the identification and interpretation of trends. At the request of the controller, the accounting staff has calculated the following ratios for the 3-year period 2018–2020.
2018
2019
2020
Current ratio
1.80
1.89
1.96
Acid-test (quick) ratio
1.04
0.99
0.87
Accounts receivable turnover
8.75
7.71
6.42
Inventory turnover
4.91
4.32
3.42
Debt to assets…
GRB Ltd has several product lines with a manager in charge of each product line. The
managers are paid a bonus based on the net income generated by their product line. Rubica
(the CEO of GRB Ltd) was going through the financial reports of the 2nd quarter of 2021 to
analyse the performance of the product lines. For 'Sweets' one of the largest product lines of
GRB Ltd, Rubica noted that while the sales declined from $800,000 in quarter 1 to $600,000
in quarter 2, the product line manager of Sweets received a bonus larger than the 1st quarter.
The manager of Sweets division was eligible for a higher bonus due to an operating profit
increase from $90,000 in the 1st quarter to $120,000 in the 2nd quarter. Rubica wondered how
the product line manager was entitled to a higher bonus with a decline in sales. Rubica also
wants to know how net income increased with a decline in sales.
Rubica found the following data from the financial reports of 'Sweets':
Particulars
Quarter 2
Quarter 1
Units…
Castro Construction signs a contract to build a hotel. The construction is
scheduled to begin on January 1, 2016 and is estimated to take four years to
complete. Castro expects that its total cost for this project would be $108
million and charges its client $151 million in total.
Based on the given actual costs incurred, complete the following table
showing the percentage of completion, revenue recognized and gross profit
for each year. Assume the company uses the percentage-of-completion
method for revenue recognition.
Do not enter dollar signs or commas in the input boxes.
Round all numbers to 1 decimal place.
Costs
Revenue
Percentage of
Completion
Year
Gross Profit*
Incurred*
Recognized*
2016
$12.96
% $
2017
$28.08
%
2018
$36.72
2019
$30.24
Total
$108.00
%
*The numbers are in million dollars.
%24
%24
%24
%24
%24
%24
%24
%24
Chapter 3 Solutions
Principles of Accounting
Ch. 3 - Prob. 1DQCh. 3 - Will the carrying value of a long-term asset...Ch. 3 - If, at the end of the accounting period, you were...Ch. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Match the concepts of accrual accounting that...Ch. 3 - The Prepaid Insurance account began the year with...Ch. 3 - The Supplies account began the year with a balance...Ch. 3 - Prob. 4SE
Ch. 3 - Prob. 5SECh. 3 - During the month of August, deposits in the amount...Ch. 3 - Prob. 7SECh. 3 - Malesherbes Companys adjusted trial balance on...Ch. 3 - Prob. 9SECh. 3 - Prob. 10SECh. 3 - Carlos Companys accountant makes the assumptions...Ch. 3 - Four conditions must be met before revenue should...Ch. 3 - Prob. 3EACh. 3 - Prob. 4EACh. 3 - Prob. 5EACh. 3 - Prob. 6EACh. 3 - Prob. 7EACh. 3 - Prob. 8EACh. 3 - Prepare year-end adjusting entries for each of the...Ch. 3 - Prob. 10EACh. 3 - Prob. 11EACh. 3 - Wipro Companys income statement included the...Ch. 3 - At the end of the first three months of operation,...Ch. 3 - On November 30, the end of the current fiscal...Ch. 3 - Kinokawa Consultants Companys trial balance on...Ch. 3 - Hertz Limo Service was organized to provide...Ch. 3 - At the end of its fiscal year, Berwyn Cleaners...Ch. 3 - Brave Advisors Services trial balance on December...Ch. 3 - Prob. 7PCh. 3 - Prob. 8PCh. 3 - Prob. 9APCh. 3 - On March 31, the end of the current fiscal year,...Ch. 3 - Lee Technology Corporations trial balance on...Ch. 3 - Prob. 12APCh. 3 - Prob. 13APCh. 3 - Scoop Consulting Services trial balance on...Ch. 3 - Prob. 15APCh. 3 - Prob. 16APCh. 3 - Never Flake Company provided a rust-prevention...Ch. 3 - Prob. 2CCh. 3 - Prob. 3CCh. 3 - Prob. 4CCh. 3 - Prob. 5CCh. 3 - Prob. 6C
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