Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 5B, Problem 1SEA
Estimate inventory. (LO 9). Fantasy Games, Inc., wants to estimate its ending inventory balance for its quarterly financial statements for the first quarter of the year. Given the following, what is your best estimate?
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Suppose a company's cost of goods sold for
years 2 and 3 were $283,310 and $299,390
respectively. Also suppose that inventory had
a balance of $34,740 at the end of year 1,
$35,168 at the end of year 2, and $36,356 at
the end of year 3. If the annual growth in total
revenues is 8.42% for the foreseeable future,
calculate the forecasted inventory balance at
the end of year 5. Assume the same inventory
turnover in all future years as that in year 3
calculated using the average asset balances.
Also assume the same gross margin % in all
future years as that in year 3. Note that year 3
is the latest year with reported results, while
years 4 onwards are all forecasted years.
Calculate the following liquidity ratios for 2020. (Round average collection period to 0 decimal place, e.g. 25 and inventory turnover ratio to 2 decimal places, e.g. 5.12. Use 365 days for calculation.)
a.
Average collection period
______ days
b.
Inventory turnover
________ times
Matthias Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2019 and 2020 follow.
Matthias MedicalComparative Balance SheetAs of December 31
2020
2019
Assets
Current assets
Cash
$397,220
$417,400
Accounts receivable, net
906,800
776,400
Inventory
743,000
681,000
Other current assets
381,300
247,000
Total current assets
2,428,320
2,121,800
Property, plant, & equipment, net
8,678,000
8,440,100
Total assets
$11,106,320
$10,561,900
Liabilities and Stockholders’ Equity…
Obtain Apple's annual report of Fiscal Year 2021 and answer the questions below.
Hint: Go to the company's official website and look for the "Investor Relations" section.
Download the 2021 annual report (also called Form 10-K). Do NOT use quarterly reports or
reports of other years.
Chapter 5B Solutions
Financial Accounting
Ch. 5B - Suppose Base Company began May with inventory of...Ch. 5B - Estimate inventory. (LO 9). Fantasy Games, Inc.,...Ch. 5B - (Estimate inventory. (LO 9). Knick-Knacks wants to...Ch. 5B - Estimate inventory. (LO 9). The following...Ch. 5B - Estimate inventory. (LO 9). The records of Florida...Ch. 5B - Estimate inventory. (LO 9). Hines Fruit Corp....Ch. 5B - Estimate inventory. (LO 9). Carries Cotton Candy...
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- 1.A.) The following table shows the desired ending inventory levels of Red Rose Product of Rose Turkish Delight Company for the following year. The company's sales department manager expects the first quarter's sales to be 10,000 boxes and a 10% increase in each quarter. 31.12.2021 31.03.2022 30.06.2022 30.09.2022 31.12.2022 Desired Ending Inventory balances of Red 600 700 800 900 1000 Rose Prepare a production budget for Red Rose Product Line for 2022.arrow_forwardUse Apple’s financial statements to calculate the following ratios and summary measures for fiscal 2020 and 2019 (round to the nearest tenth). Indicate whether the ratio was more favorable in 2020 or 2019. Apple’s stock price was $115 per share on Sept. 30, 2020, and $55 on Sept. 30, 2019. Fiscal 2020 Fiscal 2019 Is the Ratio more favorable in 2020 or 2019? DAYS RECEIVABLE 21.43 32.16 2020 DAYS INVENTORY 8.79 9.09 2019 RETURN ON ASSETS PROFIT MARGIN % GROSS MARGIN % RETURN ON EQUITY CURRENT RATIO 1.36 1.54 2019 QUICK RATIO EBITDA DEBT-TO-EQUITY RATIO n/a DIVIDEND PAYOUT RATIO n/a PE RATIO n/aarrow_forwardN1. Account Calculate the following ratios for Lake of Egypt Marina, Inc. as of year-end 2021. (Use sales when computing the inventory turnover and use total stockholders' equity when computing the equity multiplier. Round your answers to 2 decimal places. Use 365 days a year.)arrow_forward
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