Palmerstown Company Essay

Q6. XYZ Ltd is a publicly listed company which has suffered from major sales declines, due to increased foreign completion, and has made a succession of losses over the past three years. During the year, its CEO resigned and was replaced by Chief Operating Officer (COO). The trial balance reveals that sales were $10,000,000 and the company made a loss of $500,000. At what level

Account W/P Common Common # Title Ref. Balance Size Balance Size Amount Percentage REVENUE 40000 Sales 246,172,918.44 102.33% 245,213,452.88 106.40% -959,465.56 -0.39% 41000 Sales Returns 4,497,583.20 1.87% 13,600,220.89 5.90% 9,102,637.69 202.39% 42000 Warranty Exp 1,100,281.48 0.46% 1,158,128.47 0.50% 57,846.99 5.26% Net Sales 240,575,053.76 100.00% 230,455,103.52 100.00% (10,119,950.24) -4.21% EXPENSES 50000 COGS 141,569,221.61 58.85% 130,246,645.26 56.52% (11,322,576.35) -8.00% Gross Margin 99,005,832.15 41.15% 100,208,458.26 43.48% 1,202,626.11 1.21% GA-7.4

BALANCE SHEET |Dec 1990 |Jan |Feb |Mar |Apr |May |June |July |Aug |Sept |Oct |Nov |Dec | |Cash |175 |556 |724 |175 |175 |175 |175 |175 |175 |175 |175 |175 |175 | |Accts receivable |2,628 |958 |234 |271 |270 |250 |250 |270 |1,603 |3,113 |3,580 |3,982 |3.063 | |Inventory |530 |948 |1,355 |1,749 |2,157 |2,564 |2,971 |3,365 |2,904 |2.314 |1,549 |697 |530 | |Net P/E |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 | |Total Assets |4,403 |3,533 |3,383 |3,265 |3,672 |4,059 |4,466

From the above table, it is assumed that during 2010-2014 Abul Brothers cash purchase 0.0038 (Million $) and total sales 0.0032(Million $) on credit. To determine their net income/loss on the cash basis of accounting, cash paid for purchases 0.0038(Million $) has been considered for this a loss of 0.0038(Million $) has been occurred. Since there is a loss of 0.0038 (Million $) so during this year no tax, no EPS and no DPS. Nurania Store credit purchase 0.0026 (Million $) and total sales 0.0023 (Million $) on credit. To determine their net income/loss on the cash basis of accounting, No revenue and expenses has been considered. During this year no tax, no EPS and no DPS for this firm. Shatkhira Ghosh Dairy cash purchase 0.0064 (Million $) and total sales

PDA Basic Selling price/unit Activity cost/unit Profit Contribution Sales volume (units) Profit contribution Less: Selling expenses Customer support Profit $800 700 100 300 30 000 19 500 39 150 ($28 650) PDA+ $1 300 827 473 150 70 950 16 875 40 000 $14 075 PDA/ Phone $1 400 952 448 40 17 920 4 500 10 100 $3 320

“Ending Inventory” = “Beginning Inventory” ($22,000) + “Purchases” ($30,000) – “Cost of Goods sold” ($24,000) = $52,000 - $24,000 = $28,000

Exhibit 1 is the Projected Income Statement for Butler Lumber Co. Beginning inventory was pulled from the previous year’s ending inventory. Purchases were projected from a trend of 75.5% of sales for the previous 3 years. The total cost of goods sold assumed the previous 3-year average of 72% of sales would continue.

Items presented in the financial statements of each of the Group`s entities are measured using the functional currency. IPL’s presentation currency is the Australian dollar, the currency used to present its consolidated financial statements. Foreign currency transactions are translated into the functional currency at the exchange rate on the day the transaction occurs. Foreign exchange gains and losses are recognised in the statement of comprehensive income, except when they are `deferred in equity as qualifying cash flow hedges`. These have been calculated following the AASB 121 `The effects of changes in Foreign exchange rates` and AASB 139 `Financial instruments – recognition and measurement`.

3. Compute the line cost-to-revenue ratio as reported for quarter 1, 1999 through quarter 1, 2002 from the information in Exhibit 1. Refer to Exhibits 2 and 3, and estimate the revised line cost-to-revenue ratio for each quarter after adjusting for a) the release of accruals, b) the line costs that were capitalized, c) other line cost adjustments not discussed in the case, and d) ‘improper’ and ‘questionable’ adjustments to revenue. What do you observe? Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01

Quarter Q4:00 Q1:01 Q2:01 Q3:01 Q4:01 Q1:02 Q2:02 Q3:02 Q4:02 Q1:03 Q2:03 Q3:03 Q4:03 Revenues 263.8 418.8 340.3 394.2 385.7 453.6 566.2 902.6 1248.2 996.9 720.5 824.0 765.4 Gross Profit 51.6 69.6 57.9 69.5 72.3 68.8 73.8 93.3 120.3 93.7 53.5 85.7 85.4 Gross Profit Pct 19.6% 16.6%

Net sales: $1,000,000 cost of goods sold: $700,000 rent: $20,000 wages: $100,000 other operating expenses: $50,000 net sales – all operating expenses = 530,000

The whole industry that we have developed considers three companies. Confidence, Lafarge surma and the other one is Heidelberg cement. Considering the four year balance sheet and income statement we have got the account for the whole industry. In the horizontal and vertical analysis of the balance sheet we can get the picture of the overall industry. The company Heidelberg cement is increasing its Current Asset account not in terms of receivables and inventories but in terms of prepayment of taxes and cash balances. Confidence cement was initially holding a negative balance in terms of raw materials which eventually left out with negative balance with the packaging and other related

ChipMOS TECHNOLOGIES (Bermuda) LTD presents its consolidated financial statements in the New Taiwan (NT) dollars, which is their company’s functional currency. Each entity has its own functional currency and they measure their financial statements in that functional currency. Foreign currency transactions are initially recorded using the functional currency rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange

12000 daily sales) Particulars Year 1 Gross Revenues 43,20,000 Gross Expenditure [A+B] 29,80,800 Earnings Before Interest, Depreciation and 13,39,200 Taxes Cashflows (Estimated by us assuming Rs. 15000 daily sales) Particulars Year 1

The Board of Dumbellow Ltd are meeting on the 23rd January to discuss the draft budget for 2000/1, some two months before the start of that year. The company produces three industrial valves which are incorporated into equipment used in the Oil and Gas industry. The draft income statement is as follows: Product X £k Sales 100k units at £15 80k units at £25 120k units at £10 Materials Labour Overheads Profit/(Loss) 300 700 225 1225 275 400 800 360 1560 440 1500 2000 1200 480 750 330 1560 (360) 4700 1180 2250 915 4345 355 Product Y £k Product Z £k Total £k