Companies in different industries often use different proportions of current versus long-term assets to accomplish their business objective. The technology revolution resulting from the silicon microchip has often been led by two well-known companies: Microsoft and Intel. Although often thought of together, these companies are really very different. Using either the most current Forms 10-K or annual reports for Microsoft Corporation and Intel Corporation, complete the following requirements. To obtain the Forms 10-K, use either the EDGAR system following the instructions in Appendix A or the company’s website. Microsoft’s annual report is available on its website; Intel’s annual report is its Form 10-K.
Required
a. Fill in the missing data in the following table. The percentages must be computed; they are not
included in the companies’ 10-Ks. (Note: The percentages for current assets and property, plant,
and equipment will not sum to 100.)
b. Briefly explain why these two companies have different percentages of their assets in current
assets versus property, plant, and equipment.
Want to see the full answer?
Check out a sample textbook solutionChapter 6 Solutions
Survey Of Accounting
- Examine Figure 6.18, which contains the REA model for Hera Industrial Supply (HIS). The model is partially completed; it includes all entities and relationships, but it does not include cardinalities or descriptions of the relationships (which would appear in diamonds on the connecting lines between entities). HIS sells replacement parts for packaging machinery to companies in several states. HIS accepts orders via telephone, fax, and mail. When an order arrives, one of the salespersons enters it as a sales order. The sales order includes the customers name and a list of the inventory items that the customer wants to purchase. This inventory list includes the quantity of each inventory item and the price at which HIS is currently selling the item. When the order is ready to ship, WIS completes an invoice and records the sale. Sometimes, inventory items that a customer has ordered are not in stock. In those cases, HIS will ship partial orders. Customers are expected to pay their invoices within 30 days. Most customers do pay on time; however, some customers make partial payments over two or more months. List each entity in the REA model, and identify it as a resource, event, or agent. Using Microsoft Visio, redraw the REA model to include the diamonds for each relationship and include an appropriate description in each diamond. FIGURE 6.18 Partially Completed REA Model of the Hera Industrial Supply Sales Businessarrow_forwardEvaluating division performance over time The Norsk Division of Gridiron Concepts Inc. has been experiencing revenue and profit growth during the years 2014-2016. The divisional income statements follow: Assume that there are no charges from Service departments. The vice president of the division, Tom Yang, is proud of his divisions performance over the last three years. The president of Gridiron Concepts Inc., Anna Evans, is discussing the divisions performance with Tom, as follows: Tom: As you can see, weve had a successful three years in the Norsk Division. Anna: Im not too sure. Tom: What do you mean? Look at our results. Our income from operations has more than doubled, while our profit margins are improving. Anna: I am looking at your results. However, your income statements fail to include one very important piece of information, namely, the invested assets. You have been investing a great deal of assets into the division. You had 735,000 in invested assets in 2014, 1,500,000 in 2014 and 3,500,000 in 2016. Tom: You are right. Ive needed the assets in order to upgrade our technologies and expand our operations. The additional assets are one reason we have been able to grow and improve our profit margins. I dont see that this is a problem. Anna: The problem is that we must maintain a 15% rate of return on invested assets. 1. Determine the profit margins for the Norsk Division for 2014-2016. 2. Compute the investment turn over for the Norsk Division for 2014-2016. Round to two decimal places. 3. Compute the rate of return on investment for the Norsk Division for 2014-2016. 4. Evaluate the divisions performance over the 2014-2016 time period. Why was Anna concerned about the performance?arrow_forwardEvaluating division performance Last Resort Industries Inc. is a privately held diversified company with live separate divisions organized as investment centers. A condensed income statement for the Specialty Products Division for the past year, assuming no service department charges, is as follows: Last Resort Industries Inc.Specialty Products Division Income Statement For the Year Ended December 31,20Y5 Sales 32,400,000 Cost of goods sold 24,300,000 Gross profit 8,100,000 Operating expenses 3,240,000 Income from operations 4,860,000 Invested assets 27,000,000 The manager of the Specialty Products Division was recently presented with the opportunity to add an additional product line, which would require invested assets of 14,400,000. A projected income statement for the new product line is as follows: New Product Line Projected Income Statement For the Year Ended December 31,20Y6 Sales 12,960,000 Cost of goods sold 7,500,000 Gross profit 5,460,000 Operating expenses 3,127,200 Income from operations 2,332,800 The Specialty Products Division currently has 27,000,000 in invested assets, and Last Resort Industries Inc.s overall return on investment, including all divisions, is 10%. Each division manager is evaluated on the basis of divisional return on investment. A bonus is paid, in 58,000 increments, for each whole percentage point that the divisions return on investment exceeds the company average. The president is concerned that the manager of the Specialty Products Division rejected the addition of the new product line, even though all estimates indicated that the product line would be profitable and would increase overall company income. You have been asked to analyze the possible reasons the Specialty Products Division manager rejected the new product line. 1. Determine the return on investment for the Specialty Products Division for the past year. 2. Determine the Specialty Products Division managers bonus for the past year. 3. Determine the estimated return on investment for the new product line. Round whole percents to one decimal place and investment turnover to two decimal places. 4. Why might the manager of the Specialty Products Division decide to reject the new product line? Support your answer by determining the projected return on investment for 20Y6, assuming that the new product line was launched in the Specialty Products Division, and 20Y6 actual operating results were similar to those of 20Y5. 5. Suggest an alternative performance measure for motivating division managers to accept new investment opportunities that would increase the overall company income and return on investment.arrow_forward
- Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningAccounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage Learning
- Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE LFinancial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning