Cost Management
8th Edition
ISBN: 9781259917028
Author: BLOCHER, Edward
Publisher: Mcgraw-hill Education,
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Chapter 20, Problem 36E
To determine
Compute and analyze the financial ratios for Company W for both years.
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A truck was acquired on July 1, 2008, at a cost of $216,000. The truck had a six-year useful life andan estimated salvage value of $24,000. The straight-line method of depreciation was used. On January1, 2011, the truck was repaired at a cost of $20,000, which extended the useful life of the truck for anadditional two years beyond that originally estimated (salvage value is still estimated at $24,000). Incomputing depreciation for annual adjustment purposes, the expense is calculated for each month theasset is owned.Required:Prepare the appropriate entries for January 1, 2011, and December 31, 2011.
Using the same case, calculate the independent effects of a 2 percent increase in Gross Margin, a 2 percent decrease in the Tax
Rate, and a 5 percent decrease in Sales.
Colossal Chemical Corporation
Year Ended December 31, 2021
($000,000 omitted)
Base
Case
2% Increase in Gross Margin
2% Decrease in Tax Rate
5% Decrease in Sales
Sales
$2,110 $
$
+A
Cost of goods sold
1,456
Selling, general, and
administrative
274
expense
Depreciation
160
Research and
46
development
Total costs and
$1,936 $
1A
expenses
Operating Income
174
Interest expense
39
Earnings before
$135 $
$
Income Taxes
Provision for Income
Taxes
Net Income
24
$ 111 $
6A
6A
+A
6A
Chapter 20 Solutions
Cost Management
Ch. 20 - Prob. 1QCh. 20 - Prob. 2QCh. 20 - Prob. 3QCh. 20 - Prob. 4QCh. 20 - Prob. 5QCh. 20 - Prob. 6QCh. 20 - Prob. 7QCh. 20 - Prob. 8QCh. 20 - Prob. 9QCh. 20 - Prob. 10Q
Ch. 20 - Prob. 12QCh. 20 - Prob. 13QCh. 20 - Prob. 14QCh. 20 - Prob. 15QCh. 20 - Prob. 16BECh. 20 - Prob. 17BECh. 20 - Prob. 18BECh. 20 - Prob. 19BECh. 20 - Prob. 20BECh. 20 - Prob. 21BECh. 20 - Prob. 22BECh. 20 - Prob. 23BECh. 20 - Prob. 24BECh. 20 - Prob. 25ECh. 20 - Prob. 26ECh. 20 - Alternative Compensation Plans ADM Inc., an...Ch. 20 - Prob. 28ECh. 20 - Performance Evaluation and Risk Aversion Heartwood...Ch. 20 - Prob. 30ECh. 20 - Prob. 31ECh. 20 - Prob. 32ECh. 20 - Prob. 33ECh. 20 - Prob. 34ECh. 20 - Business Analysis Williams Company is a...Ch. 20 - Business Valuation Refer to the information in...Ch. 20 - Consider the following balance sheet and income...Ch. 20 - Consider the following balance sheet and income...Ch. 20 - Using the information in Exercise 20-40 for Yum!...Ch. 20 - Compensation; Net Present Value (see Chapter...Ch. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - A restaurant manager has the following goals: (1)...Ch. 20 - Compensation Pools; Residual Income; Includes a...Ch. 20 - Prob. 47PCh. 20 - Executive Compensation; Teams; Strategy;...Ch. 20 - Prob. 50PCh. 20 - Business Analysis: Spreadsheet...Ch. 20 - Business Analysis: Spreadsheet...Ch. 20 - Business Analysis Brooks Plumbing Products Inc....Ch. 20 - Prob. 54P
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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License