Revenue is assumed at 400 @$50.00 20,000 Cost of sales Beginning inventory 100 units @$15.00 110 units @ $18.00 150 units @ $20.00 200 units @$22.50 Purchase of Purchase of Purchase of Ending inventory ??? units @ ??? Gross Profit Operating expenses Earnings before tax $5,000.00 Income tax rate 20% Earnings after tax

Revenue is assumed at 400 @$50.00 20,000 Cost of sales Beginning inventory 100 units @$15.00 110 units @ $18.00 150 units @ $20.00 200 units @$22.50 Purchase of Purchase of Purchase of Ending inventory ??? units @ ??? Gross Profit Operating expenses Earnings before tax $5,000.00 Income tax rate 20% Earnings after tax

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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Similar questions

Dollar-Value LIFO A company adopted the LIFO method when its inventory was 1,800. One year later its ending inventory was 2,100, and costs had increased 5% during the year. Required: What is the ending inventory using dollar-value LIFO? Round to the nearest dollar.
Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of goods sold 660.0 Gross profit 135.0 Selling expenses 73.5 EBITDA 61.5 Depreciation expenses 12.0 Earnings before interest and taxes (EBIT) 49.5 Interest expenses 4.5 Earnings before taxes (EBT) 45.0 Taxes (40%) 18.0 Net income 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the companys ratios to the industry average ratios. c. Do the balance-sheet accounts or the income statement figures seem to be primarily responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms in the industry? e. If the firm had a pronounced seasonal sales pattern or if it grew rapidly during the year, how might that affect the validity of your ratio analysis? How might you correct for such potential problems?
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.
Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Kulsrud Company would like to estimate the current inventory level. Using the gross profit method and the following information, estimate the current inventory level for Kulsrud Company. Goods available for sale 100,000 Net sales 150,000 Normal gross profit as a percent of sales 40%
Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on the liquidity metric working capital and profitability metric gross profit percent. Indicate the gross profit percent for each sale (rounding to one decimal place) in parentheses next to the effect of the sale on the company’s ability to attain an overall gross profit percent of 30%.
LO1 If the ending inventory is overstated by 10,000, indicate what, if anything, is incorrect about the following: Cost of goods sold___________ Gross profit___________ Net income___________ Ending owners capital___________
Determine the Sales for the year, Gross Profit P240,000.00, Ending Inventory P120,000.00, Goods available for sale P 200,000.00 P 460,000.00 P 320,000.00 P 400,000.00 P 300,000.00
The expenses other than interest expense of Ratio Company for the current year is 40% of cost of sales but only 20% of sales. Interest expense is 5% of sales. The amount of purchases is 120% of cost of sales. Ending inventory is twice as much as the beginning. The income after tax of 35% for the current year is P390,000. What is the amount of inventory at the end of the year? Choices: 400,000 240,000 480,000 260,000
The expenses other than interest expense of Ratio Company for the current year is 40% of cost of sales but only 20% of sales. Interest expense is 5% of sales. The amount of purchases is 120% of cost of sales. Ending inventory is twice as much as the beginning. The income after tax of 35% for the current year is P390,000. What is the amount of inventory at the end of the year? Group of answer choices 240,000 400,000 260,000 480,000
Calculate the following: Company A Mark - up 25 percent Sales N$ 12 500 Inventory 01.04.2020 N$ 4 500 inventory 31.03.2021 N$ 3 800 Calculate: Gross Profit, Purchases and Cost of Sale. Company B Margin 20 Percent Purchases N$ 22 400 Inventory 01.06.2020 N$ 8 700 Inventory 31.05.2021 N$ 5 100 Calculate : Gross Profit, Sales and Cost of Sale. Company C Sale N$ 54 500 Gross Profit N$ 12 000 Calculate: Percentage Mark-up, Margin and amount of Cost of Sale