Questions and Answers of Managerial Accounting 4th Edition

Barron Manufacturing spends 50 minutes per order on non-value-added activities. The total manufacturing cycle time is 2.25 hours.RequiredCalculate the manufacturing cycle efficiency.
Nelson Extruding produces containers for nurseries and landscaping businesses. The company competes based on its low-cost, high-quality products. As the company’s expenses have risen, management
What Is horizontal analysis and how are the numbers calculated?
What are common-size financial statements? What is the base for the common-size income statement? What is the base for the common-size balance sheet?
What is working capital?
Name two sources of industry data.
The currently asset portion of Darden Restaurants, Inc.'s balance sheet is as follows (in $ millions).RequiredPrepare a horizontal analysis of Darden Restaurants’ current assets, rounding your
How is trend analysis similar to horizontal analysis?
What information would you hope to obtain from a set of common-size financial statements?
What does a current ratio of 2.0 mean?
Why are some companies hard to classify using SIC or NAICS codes?
What information would you hope to obtain from a trend analysis?
What might you conclude if the Bonds Payable percentage was increasing on the common-size balance sheet?
Why are inventory and prepaid expenses omitted from the acid-test ratio?
What would you hope to learn by comparing a company’s performance to industry data?
Six Flags Entertainment Corp. reported the following revenue data (in $000s) in its 2017 annual report.RequiredPrepare a trend analysis of Six Flags’ revenue sources, rounding your answers to one
What might you conclude if the Accounts Receivable percentage for Company A on its common-size balance sheet was greater than the same percentage for Company B? Assume the companies are in the same
Chipotle Mexican Grill began with a single location in 1993 and now operates more than 2,450 restaurants. Adapted versions of the company’s income statements (in $000s) are as
What might you conclude if the Cost of Goods Sold percentage was increasing on the common-size income statement?
Why might a high accounts receivable turnover be bad?
Leslie’s Burgers operates and franchises fast-food restaurants specializing in grilled hamburgers and chicken sandwiches. The 2018 and 2019 income statements are as follows (in $000s):Requireda.
What does a high inventory turnover indicate?
What does a debt ratio of 0.60 indicate? What does the remaining 0.40 indicate?
Martha Bennett recently inherited $100,000 from her grandmother and is evaluating several investment opportunities. One company she is looking at is Keating Genomics, a company in the health care
What does a low times interest earned ratio indicate?
Matthias Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2019 and 2020 follow.Matthias MedicalComparative
In your own words, what is a “return”?
Refer to Matthias Medical’s financial statements, presented in Exercise 12.8.Data From Exercise 12.8:Matthias Medical manufactures hospital beds and other institutional furniture. The company’s
In the return on total assets ratio, which part of the numerator is the return to stockholders and which part is the return to creditors?
Refer to Matthias Medical’s financial statements, presented in Exercise 12.8.Data From Exercise 12.8:Matthias Medical manufactures hospital beds and other institutional furniture. The company’s
How do you know if a company has positive financial leverage?
Refer to Matthias Medical’s financial statements, presented in Exercise 12.8.Data From Exercise 12.8:Matthias Medical manufactures hospital beds and other institutional furniture. The company’s
What factors could cause earnings per share to decrease?
Why would investors be willing to buy stock at a price that is 20 times higher than earnings per share?
Gallivan, Inc., and Tucker Ltd. are both food service distributors. As their adapted income statements (in $ millions) show, Gallivan’s sales revenue was more than double that of Tucker.Requireda.
The following information (in $ millions) was taken from recent annual reports of Nike and Under Armour.Requireda. Calculate each company’s accounts receivable turnover and average collection
The following information (in $ millions) was taken from the annual reports of two companies.Requireda. Calculate each company’s inventory turnover and average days to sell inventory.b. The two
Selected account information (in $ millions) from Target Corporation’s 2018 annual report follows. While the company has authorized the issuance of 5 million shares of preferred stock, none have
Wendy’s International, Inc., and McDonald’s Corporation, two leading fast-food chains, are classified in SIC code 5812—Eating Places. Recent results for each company, along with industry
Pippin Piping Co. manufactures decorative fabric trims. The company’s financial statements follow.Requireda. Prepare a horizontal analysis for 2020. What significant changes do you see? (Round to 1
Haver Industries is a leading consumer products company. The company’s adapted comparative balance sheets and income statements (in $ millions) follow.Requireda. In his letters to stockholders in
Koester, Inc., states in its 2020 10-K filing with the SEC, “In October 2020, two major credit rating agencies changed Koester’s long-term credit rating outlook to negative and one of the credit
What is meant by a source of cash?
Which asset accounts are affected by investing activities?
What should the cash flows from each of the three activity sections add up to? How do you know whether or not you have obtained the right amount?
What is meant by a use of cash?
In the indirect method, why are increases in current assets subtracted from net income to calculate the cash flow provided by operating activities?
When an asset is sold for a gain, how do you determine the amount to be reported in the investing section of the statement of cash flows?
Complete the following table by identifying the section of the statement of cash flows that each item belongs in. Operating Activities Investing Activities Financing Activities NBC Universal returns
Why is it important for a company to generate cash from operating activities on a consistent basis?
What are operating activities? Give one example.
In the indirect method, why are increases in current liabilities added to net income to calculate the cash flow provided by operating activities?
Which liability and equity accounts are affected by financing activities?
What might a trend toward providing cash through investing activities suggest about a business?
Perkins Co.’s current asset and liability balances for the past two years are as follows. Net income for 2020 was $1,369,000, and depreciation expense was $70,000. December 31, 2020 December 31,
What are investing activities? Give one example.
What are financing activities? Give one example.
Mallory Michaels, senior accountant for Trendy Fashions, has gathered the following balances from the company’s general ledger.RequiredUsing the indirect method, prepare the cash flows provided by
Thalina Mineral Works is one of the world’s leading producers of cultured pearls. The company’s condensed statement of cash flows for the years 2018—2020 follows.RequiredComment on Thalina
Lind Industries is one of the largest manufacturers of small motors in the United States. The cash flows provided by investing activities section of the company’s statement of cash flows for the
Colin Confections operates convenience stores, primarily in small Southeastern towns. The cash flows provided by financing activities section of the company’s statement of cash flows for the fiscal
On January 1, 2020, Glass Industries’ Accounts Receivable balance was $18,500; on December 31, 2020, it was $16,000. Sales revenue for the year was $150,000.RequiredCalculate the cash received from
In its 2020 annual report, Poppie, Inc. reported Accounts Receivable of $1,320 million at the end of 2019 and $1,560 million at the end of 2020. Sales revenue for 2020 was $14,000
At the end of 2019, Seiford Enterprises’ Accounts Payable balance was $327,000; at the end of 2020, it was $243,000. Assume that the company purchased $1,900,000 of inventory during 2020 and that
On January 1, 2020, Glass Industries’ Inventory balance was $22,000; on December 31,2020, it was $16,000. The company’s Accounts Payable balance was $12,750 on January 1, 2020, and $11,200 on
Tarpley Bakery manufactures, distributes, and markets a broad array of baked goods. In its 2020 annual report, the company reported salaries and wages payable of $72 million at the end of 2020 and
In its 2020 annual report, Navya Naturals reported accrued Liabilities of $12.5 million at the end of 2020 and $13.8 million at the end of 2019. The company’s operating expenses for 2020 totaled
Kate Petusky prepared Addison Controls’ balance sheet and income statement for 2020. Before she could complete the statement of cash flows, she had to leave town to attend to a family emergency.
Blake Weaver, Cook Enterprises’ controller, is preparing the financial statements for 2020. He has completed the comparative balance sheets and income statement, which follow and has gathered this
What is a decentralized organization?
What is a segment of an organization? Identify several segments of your university.
What are the advantages of decentralization? The disadvantages?
After one year using the TopCap system, Jonathan Smith, vice president for marketing at C&C Sports, is convinced that the company could sell even more baseball caps. Apparently, the market demand
Farrior Fashions needs to replace a beitloop attacher that currently costs the company $50,000 in annual cash operating costs. This machine is of no use to another company, but it could be sold as
Jewel Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $85,000 for the machine, which was state of the art at the time of purchase. Although
Larry’s Lawn Service needs to purchase a new lawnmower costing $15,099 to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of seven years, with
The Seago Company is planning to purchase $640,000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the
Garrett Boone, Farish Enterprises’ vice president of operations, needs to replace an automatic lathe on the production line. The model he is considering has a sales price of $310,000 and will last
Harrison Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $84,753 and will save the company $15,000 in direct
Tom Falkland is considering refinancing his home mortgage to reduce his house payment by $175 per month. Closing costs associated with the refinancing will total $6,000. Tom will finish medical
Wyer’s Accounting Museum is exploring the purchase of a new building with a useful life of 15 years to use as its main gallery space. The building will cost $640,000. Once it has been purchased,
The Seago Company is planning to purchase $650,000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the
Payton and Finley Davis run a real estate brokerage firm. They have just moved into a new building and want to add some outdoor digital signage to advertise the firm’s services. The sign they are
Jackson’s House of Music wants to purchase Transposelt, a system that transposes any song in its database and prints sheet music in the requested key. This system allows singers to obtain sheet
Farmville Regional Airport is modernizing its terminal facilities in anticipation of significant growth in the number of passengers using the airport. A consultant’s study commissioned by the
Bill Zimmerman is evaluating two new business opportunities. Each of the opportunities shown below has a 15-year life. Bill uses a 12% discount rate.Requireda. Calculate the net present value of the
TimeTrends integrated time clock and payroll system sells for $271,672. At this price, the annual cost savings that the system will generate for Building Keepers, a facilities management company,
Cindy Alexander, Turner, Inc’s vice president of marketing, has received a sales call from a vendor of customer relationship management (CRM) software. The vendor claims that the software and other
Review the data provided in Exercise 9.2.Data From Exercise 9.2:Mighty Vita produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an increasing
What is the difference between a project’s net present value and the present value of its net future cash inflows?
How does average annual income differ from cash flow?
What formula can be used to solve for the internal rate of return when a project’s cash flows are equal?
Review the data provided in Exercise 9.1.Data From Exercise 9.1:Metro Industries is considering the purchase of new equipment costing $1,500,000 to replace existing equipment that will be sold for
Review the data provided in Exercise 9.1.Data From Exercise 9.1:Metro Industries is considering the purchase of new equipment costing $1,500,000 to replace existing equipment that will be sold for
How is the internal rate of return related to net present value?
How is net present value calculated?
Metro Industries is considering the purchase of new equipment costing $1,500,000 to replace existing equipment that will be sold for $150,000. The new equipment is expected to have a $220,000 salvage
What does the payback period measure?
What is the difference between a screening decision and a preference decision? Give an example of each.
What three factors does present value depend on?

Showing 200 - 300 of 519