Using MIS (10th Edition)
Using MIS (10th Edition)
10th Edition
ISBN: 9780134606996
Author: David M. Kroenke, Randall J. Boyle
Publisher: PEARSON
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Chapter 6.3, Problem 6EGDQ

Explanation of Solution

Alliance’s current profit:

Alliance’s current profitability is due to “cost reduction”, they shifted their data storage and it’s processing from their own web farm to a cloud.

  • Due to the flexibility of cloud, they develop their data services in a fraction of previous cost with better speed and quality.

Actions done by using Alliance’s current profit:

The following actions will be done by using Alliance’s current profit:

  • Developing company’s client base.
    • It is a company’s major source of trade...

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Damon Davis was finalising Drano Plumbing's paperwork. He projected a $50,000 net profit. When he added up the columns on the Balance Sheet, he saw that the debit column amounted to $400,000 and the credit column amounted to $300,000. What was the most probable cause of the outcome discrepancy? If this was not the cause of the issue, how should he proceed to ascertain its origin?
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As of the time of writing, Damon Davis was completing out the paperwork for Drano Plumbing. He estimated a $50,000 net profit would be made. He counted the columns of the balance sheet and knew how much was in the credit column ($300,000) and how much was in the negative column ($400,000). What, in your opinion, was the most plausible reason for the discrepancy in the results? What should he do next to identify the issue's cause if this wasn't the cause of the issue?
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