EBK FINANCIAL MANAGEMENT: THEORY & PRAC
15th Edition
ISBN: 9781305886902
Author: EHRHARDT
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 12, Problem 7P
a)
Summary Introduction
To compute: The projected external capital requirements.
b)
Summary Introduction
To compute: The self-supporting growth rate of the company U.
c)
Summary Introduction
To determine: The company U’s
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EMC Corporation manufactures large-scale, high-performance computer systems. In a recent annual report, the balance sheet included the following information ($ in millions):
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2014
Current assets:
Receivables, less allowances of $90 in 2015 and $72 in 2014
$
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$
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In addition, the income statement reported sales revenue of $24,704 ($ in millions) for the current year. All sales are made on a credit basis. The statement of cash flows indicates that cash collected from customers during the current year was $25,737 ($ in millions). Note that there could have been significant recoveries of accounts receivable previously written off. Required:1. Compute the following ($ in millions):
The net amount of bad debts written off or reinstated by EMC during 2015.
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2. Suppose that EMC had used the direct write-off method to account for bad…
MC Corporation manufactures large-scale, high-performance computer systems. In a recent annual report, the balance sheet included the following information ($ in millions):
2015
2014
Current assets:
Receivables, less allowances of $90 in 2015 and $72 in 2014
$
3,977
$
4,413
In addition, the income statement reported sales revenue of $24,704 ($ in millions) for the current year. All sales are made on a credit basis. The statement of cash flows indicates that cash collected from customers during the current year was $25,737 ($ in millions). Note that there could have been significant recoveries of accounts receivable previously written off. Required:1. Compute the following ($ in millions):
The net amount of bad debts written off or reinstated by EMC during 2015.
The amount of bad debt expense or reduction of bad debt expense that EMC included in its income statement for 2015.
2. Suppose that EMC had used the direct write-off method to account for bad…
EMC Corporation manufactures large-scale, high-performance computer systems. In a recent annual report, the balance sheet
included the following information ($ in millions):
Current assets:
Receivables, less allowances of $90 in
2015 and $72 in 2014
2015
Required:
1. Compute the following ($ in millions):
$3,977
2014
$4,413
In addition, the income statement reported sales revenue of $24,704 ($ in millions) for the current year. All sales are made on a credit
basis. The statement of cash flows indicates that cash collected from customers during the current year was $25,737 ($ in millions).
Note that there could have been significant recoveries of accounts receivable previously written off.
a. The net amount of bad debts written off or reinstated by EMC during 2015.
b. The amount of bad debt expense or reduction of bad debt expense that EMC included in its income statement for 2015.
2. Suppose that EMC had used the direct write-off method to account for bad debts. Compute the following…
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EBK FINANCIAL MANAGEMENT: THEORY & PRAC
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