Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales $1,603,000 635,970 Variable expenses 967,030 Contribution margin 1,064,000 Fixed expenses Net operating income (loss) $ (96,970) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division West Central $393,000 $610,000 $600,000 East Sales Variable expenses as a percentage of sales Traceable fixed expenses 21% $280,000 $322,000 $ 190,000 59% 46% Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total East Central West Company 2- As a result of a marketing study, the president believes that sales in the a. West Division could be increased by 15% if monthly advertising in that division were increased by $26,000. Calculate the incremental net operating income. Incremental net operating income

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales $1,603,000 635,970 Variable expenses 967,030 Contribution margin 1,064,000 Fixed expenses Net operating income (loss) $ (96,970) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division West Central $393,000 $610,000 $600,000 East Sales Variable expenses as a percentage of sales Traceable fixed expenses 21% $280,000 $322,000 $ 190,000 59% 46% Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total East Central West Company 2- As a result of a marketing study, the president believes that sales in the a. West Division could be increased by 15% if monthly advertising in that division were increased by $26,000. Calculate the incremental net operating income. Incremental net operating income

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 47E: Bryce Company manufactures pet supplies. However, Bryces electronic accounting system recently...

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Checkpoint Systems is a leading provider of source tagging, handheld labeling systems, retail merchandising systems, and bar-code labeling systems. In a press release, Checkpoint stated the following: GAAP reported net loss for the fourth quarter of 2004 was 29.3 million, or 0.78 per diluted share, compared to net earnings of 4.5 million, or 0.13 per diluted share, for the fourth quarter 2003. Excluding impairment and restructuring charges, net of tax, the Companys net income for the fourth quarter 2004 was 0.30 per diluted share, compared to 0.27 per diluted share in the fourth quarter 2003. Calculate the amount of the impairment and restructuring charges Checkpoint reported in 2004 and 2003. Discuss why the firm reported earnings both including and excluding impairment and restructuring charges.
Bryce Company manufactures pet supplies. However, Bryces electronic accounting system recently crashed and, unfortunately, only a partial recovery of the companys year-end accounting records (which included several profitability ratios) was possible. As a result, Bryces controller, a bright young CMA named Jeanette, must compute various lost financial account balances using the recovered information listed below. Long-term liabilities: 1,500,000 Ending inventory is the same as beginning inventory. Gross margin: 3,000,000 Net sales: 8,000,000 Accounts receivable turnover: 50 Ending accounts receivable is the same as beginning accounts receivable. Total liabilities: 2,000,000 Current ratio: 2.5 Cash: 600,000 Quick ratio: 2.0 Inventory turnover in days: 3.65 Required: 1. Calculate current liabilities. 2. Calculate current assets. 3. Calculate average accounts receivable 4. Calculate marketable securities. 5. Calculate average inventory.
A company is a wholesale distributor of electronic equipment who has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales P 1,000,000Variable expenses 390,000Contribution Margin 610,000Fixed Expenses 625,000Net operating Income (loss) P(15,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central WestSales P250,000 P400,000 P350,000Variable expenses as a percentage of sales 52% 30% 40%Traceable Fixed Expenses P160,000 P200,000 P175,000 Required: a. Prepare a contribution format income statement segmented by the division. East Central West b. The marketing department has proposed increasing the West Division’s monthly advertising by P15,000 believing that it…
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement:
On May 31, 2015, top management of Stafford Manufacturing Co. decided to dispose of an unprofitable business component. An operating loss of $210,000 associated with the component was incurred during the year. The plant facilities associated with the business segment were sold on November 30, and a $23,000 gain was realized on the sale of the plant assets. Assuming a 30% tax rate, prepare the discontinued operations section of Stafford Manufacturing Co.’s income statement for the year ending December 31, 2015. What additional information about the discontinued segment would be provided by Stafford Manufacturing if it were reporting using the accounting standards of the United Kingdom?
Shown below is an income statement for 2020 that was prepared by a poorly trained bookkeeper of JensenCorporation. Jensen CorporationINCOME STATEMENTDecember 31, 2020 Sales revenue $945,000Investment revenue 19,500Cost of merchandise sold (408,500)Selling expenses (145,000)Administrative expense (215,000)Interest expense (13,000)Income before special items 183,000Special itemsLoss on disposal of a component of the business (30,000)Major casualty loss (extraordinary item) (70,000)Net federal income tax liability (???)Net income ???InstructionsPrepare a multiple-step income statement for 2020 for Jensen Corporation that is presented in accordance withgenerally accepted accounting principles (including format and terminology). Jensen Corporation has 50,000shares of common stock outstanding and has a 30% federal income tax rate on all tax related items. Round allearnings per share figures to the nearest cent.
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,610,000 Variable expenses 659,000 Contribution margin 951,000 Fixed expenses 1,046,000 Net operating income (loss) $ (95,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 430,000 $ 610,000 $ 570,000 Variable expenses as a percentage of sales 52 % 34 % 40 % Traceable fixed expenses $ 288,000 $ 321,000 $ 193,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $29,000 based on the belief that it would…
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In 2017, Pronghorn Corporation discontinued its retail store operations to focus on its online opportunities. The elimination of these retail operations is properly considered a discontinued operation. During the current year, its store operations lost $630,000 (net of tax) while its online operations reported a profit of $3,530,000 (net of tax). Pronghorn sold the store operations at the end of the year at a loss of $1,380,000 (net of tax). Prepare an income statement for 2017 beginning with line item “Income from continuing operations.” PRONGHORN CORPORATIONPartial Income Statementchoose the accounting period December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017 select an income statement item Discontinued OperationsEarnings Per ShareIncome From Continuing OperationsLoss From Disposal of Store Operations Net of TaxLoss…
The following information is related to Nash Company for 2020. Retained earnings balance, January 1, 2020 $901,600 Sales Revenue 23,000,000 Cost of goods sold 14,720,000 Interest revenue 64,400 Selling and administrative expenses 4,324,000 Write-off of goodwill 754,400 Income taxes for 2020 1,144,480 Gain on the sale of investments 101,200 Loss due to flood damage 358,800 Loss on the disposition of the wholesale division (net of tax) 404,800 Loss on operations of the wholesale division (net of tax) 82,800 Dividends declared on common stock 230,000 Dividends declared on preferred stock 73,600 Nash Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Nash sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. (a1) New attempt is in…
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