INTERMEDIATE ACCOUNTING COMBO
9th Edition
ISBN: 9781260361995
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 3, Problem 3.20E
Effect of management decisions on ratios
• LO3–8
Most decisions made by management impact the ratios analysts use to evaluate performance. Indicate (by letter) whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is less than 1.0 before the action is taken.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
View Policies A
Current Attempt in Progress
What is "balanced" in the balanced scorecard approach?
A
O The number of products produced.
O The number of defects found on each product.
O The amount of costs allocated to products.
O The emphasis on financial and non-financial performance measurements.
Save for Later
Attempts: 0 of 1
n
Ex. 11-9
Exercise 11-9 (Static) Return on Investment (ROI) and Residual Income Relations [LO11-1, LO11-2]
A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector
industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage
answers to nearest whole percent.)
Sales
Net operating income
Average operating assets
Return on investment (ROI)
Minimum required rate of return:
Percentage
Dollar amount
Residual income
$ 9,000,000
$ 3,000,000
18 %
16 %
$
$
$
Company
B
7,000,000
280,000
14 %
320,000
%
Saved
C
$ 4,500,000
$ 1,800,000
$
%
15 %
90,000
Determining Missing Items in Return Computation
One item is omitted from each of the following computations of the return on investment:
Rate of Returnon Investment
=
Profit Margin
x
InvestmentTurnover
13.2%
=
6%
x
(a)
(b)
=
10%
x
1.80
10.5%
=
(c)
x
1.50
15%
=
5%
x
(d)
(e)
=
12%
x
1.10
Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places.
(a)
fill in the blank 1
(b)
fill in the blank 2%
(c)
fill in the blank 3%
(d)
fill in the blank 4
(e)
fill in the blank 5%
Chapter 3 Solutions
INTERMEDIATE ACCOUNTING COMBO
Ch. 3 - Prob. 3.1QCh. 3 - Prob. 3.2QCh. 3 - Define current assets and list the typical asset...Ch. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Describe the common characteristics of assets...Ch. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Define the terms paid-in-capital and retained...
Ch. 3 - Disclosure notes are an integral part of the...Ch. 3 - A summary of the companys significant accounting...Ch. 3 - Define a subsequent event.Ch. 3 - Prob. 3.14QCh. 3 - Prob. 3.15QCh. 3 - Prob. 3.16QCh. 3 - Prob. 3.17QCh. 3 - Show the calculation of the following solvency...Ch. 3 - Prob. 3.19QCh. 3 - Prob. 3.20QCh. 3 - (Based on Appendix 3) Segment reporting...Ch. 3 - Prob. 3.22QCh. 3 - Prob. 3.23QCh. 3 - Current versus long-term classification LO32,...Ch. 3 - Balance sheet classification LO32, LO33 The trial...Ch. 3 - Prob. 3.3BECh. 3 - Balance sheet classification LO32, LO33 Refer to...Ch. 3 - Balance sheet classification LO32, LO33 The...Ch. 3 - Balance sheet classification LO32, LO33 You have...Ch. 3 - Balance sheet preparation; missing elements LO32,...Ch. 3 - Financial statement disclosures LO34 For each of...Ch. 3 - Calculating ratios LO38 Refer to the trial...Ch. 3 - Prob. 3.10BECh. 3 - Calculating ratios; solving for unknowns LO38 The...Ch. 3 - Balance sheet; missing elements LO32, LO33, LO38...Ch. 3 - Balance sheet classification LO32, LO33 The...Ch. 3 - Balance sheet classification LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet; Current versus long-term...Ch. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Financial statement disclosures LO34 The...Ch. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - FASB codification research LO32, LO34 Access the...Ch. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Calculating ratios; solve for unknowns LO38 The...Ch. 3 - Prob. 3.19ECh. 3 - Effect of management decisions on ratios LO38...Ch. 3 - Prob. 3.21ECh. 3 - Prob. 3.22ECh. 3 - Balance sheet preparation LO32, LO33 Presented...Ch. 3 - Balance sheet preparation; missing elements LO32,...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Prob. 3.6PCh. 3 - Balance sheet preparation; errors LO32, LO33 The...Ch. 3 - Balance sheet; errors; missing amounts LO32, LO33...Ch. 3 - Balance sheet preparation LO32 , LO33 Presented...Ch. 3 - Prob. 3.10PCh. 3 - Communication Case 31 Current versus long-term...Ch. 3 - Analysis Case 32 Current versus long- term...Ch. 3 - Prob. 3.4BYPCh. 3 - Judgment Case 35 Balance sheet; errors LO32...Ch. 3 - Prob. 3.6BYPCh. 3 - Real World Case 37 Balance sheet and significant...Ch. 3 - Judgment Case 38 Post fiscal year-end e vents ...Ch. 3 - Prob. 3.9BYPCh. 3 - Prob. 3.10BYPCh. 3 - Prob. 3.11BYPCh. 3 - Analysis Case 314 Balance sheet information LO32...Ch. 3 - Prob. 3.15BYPCh. 3 - Ethics Case 316 Segment reporting Appendix 3 You...Ch. 3 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- $2.97 O e. $0.48 Which of the following statements about CVP analysis is false? O a. Operating income calculations in CVP analysis are based on contribution margin not gross margin. O b. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. O c. Total revenues and total costs are linear in relation to output units. O d. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O e. All of the given answers are true. pe here to search hp 4+ & 7 V % 2$ 4 @ #3 8 6. 3 W E R. G H. J K. S D M. V B 近arrow_forwardTime left 1:46 Which of the following statements about CVP analysis is false? O a. Unit selling price, unit variable costs, and total fixed costs are known and remain constant. Ob. All of the given answers are true. Oc. Managers use (CVP) analysis to study the behavior of and relationship among the elements such as total revenues, total costs, and income O d. Total revenues and total costs are linear in relation to output units. O e. Operating income calculations in CVP analysis are based on contribution margin not gross margin. 14:13 A O A d0 ENG 15-04-2021 re to search hp end brt sc delete home & num 23 + backspace 24 4. lock 8. 3. 6 7 V 8 A home enter 5 0 D F G J K L. pause 51 B ↑ shift 11 2 N M end alt ctrl insarrow_forwardQ.Do you agree with Petrocal’s decision not to include measures of changes in operating income from productivity improvements under the financial perspective of the balanced scorecard? Explain briefly.arrow_forward
- Determining Missing Items in Return Computation One item is omitted from each of the following computations of the return on investment: Rate of Return on Investment = Profit Margin x Investment Turnover 19 % = 10 % x (a) (b) = 28 % x 0.75 15 % = (c) x 1.5 16 % = 20 % x (d) (e) = 15 % x 1.8 Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) (b) % (c) % (d) (e) %arrow_forwardSargassum Caribbean Incorporated Balance Sheet as at December 31, 2020 Assets Liabilities Current Assets: Current Liabilities: Cash Accounts Payable 600,000 300,000 200,000 400,000 Notes Payable 900,000 1,500,000 Total Current Liabilities Accounts Receivable Inventory Total Current Assets 900,000 Fixed Assets: Long-Term Liabilities: Property, Plant & Equipment Less: Accumulated Depreciation 1,200,000 Long-Term Debt 1,000,000 Total Long Term Liabilities 200,000 300,000 300,000 Net Fixed Assets Owners' Equity: Common Stock ($1 Par) Capital Surplus Retained Earnings Total Owners' Equity 100,000 300,000 100,000 500,000 1,700,000 Total Liabilities & Owners' Equity Total Assets 1,700,000 Sargassum Caribbean Incorporated Income Statement for Year Ending December 31, 2020 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and 2,500,000 800,000 100,000 104,000 1,496,000 Тахes Less: Interest Expense Taxable Income 20.000 1,476,000 663,000…arrow_forwardDetermining missing items in return on investment computation One item is omitted from each of the following computations of the return on investment: Return on Investment = Profit Margin x Investment Turnover 27 % = 10 % x (a) (b) = 16 % x 0.75 24 % = (c) x 1.5 14 % = 20 % x (d) (e) = 15 % x 1.8 Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) fill in the blank 1 (b) fill in the blank 2 % (c) fill in the blank 3 % (d) fill in the blank 4 (e) fill in the blank 5 %arrow_forward
- Determining missing items in return on investment computation One item is omitted from each of the following computations of the return on investment: Return on Investment = Profit Margin x Investment Turnover 24 % = 10 % x (a) (b) = 24 % x 0.75 12 % = (c) x 1.5 16 % = 20 % x (d) (e) = 15 % x 2.2arrow_forward9. In a Balanced Scorecard, what perspective would a measure of the number of repeat orders be most likely to appear? (a) Market perspective (b) Customer perspective (c) Internal perspective (d) Financial perspectivearrow_forwardChapter 10: Applying Excel: Exercise (Part 2 of 2) Requirement 2: Revise the data in your worksheet as follows: A 1 Chapter 10: Applying Excel 2 3 Data 4 Sales 5 6 7 Net operating income ROI Average operating assets Minumum required rate of return If your formulas are correct, you should get the correct answers to the following questions. a. What is the ROI? Residual income B % c. Why is the residual income positive? $ 64,000,000 $ 7,680,000 $ 16,000,000 25% b. What is the residual income? (Negative amount should be indicated by a minus sign.)arrow_forward
- When should a company recognize revenue under GAAP? Multiple Choice When the promised performance has been satisfied. k ces All of the choices are necessary to recognize revenue. When delivery has occurred or services have been provided (rendered). When the price is measurable.arrow_forwardDetermining missing items in return on investment computation One item is omitted from each of the following computations of the return on investment: Return on Investment Profit Margin Investment Turnover %3D 15 % 10 % (a) %3D (b) 24 % X 0.75 24 % (c) X 1.5 %3D 12 % 20 % (d) (e) 15 % 1.4 Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) (b) % (c) % (d) (e) % IIarrow_forwardDetermining Missing Items in Return Computation One item is omitted from each of the following computations of the return on investment: Rate of Return on Investment = Profit Margin x Investment Turnover 20% 10 % (a) (b) 24 % 0.75 21 % (c) 1.5 10 % 20% (d) (e) 15 % 2. Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) (b) (c) (d) (e) %3Darrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License