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grandymaker [24]
2 years ago
11

An inventory turnover analysis is useful to the internal auditor because it may detect:_____.

Business
1 answer:
Vika [28.1K]2 years ago
4 0

An inventory turnover analysis is useful to the internal auditor because it may detect <u>the existence of obsolete merchandise.</u>

Inventory that has reached the end of its useful life is called as obsolete inventory. It has been a while since this inventory was utilized or sold, and it is not anticipated that it will be in the near future. This kind of inventory must be written off or written down and can result in significant losses for a business.

<h3>What is turnover analysis?</h3>

The dynamics of people leaving or remaining in an organization are evaluated using turnover analysis to:

  • how many workers quit
  • The causes of people's departures and stays
  • The expense of turnover caused by a lapse in company continuity
  • How to reduce the danger of present employees leaving the company through turnover

The projected expense of replacing a paid worker ranges from 6 to 9 months of that worker's salary and includes both the direct expense of hiring a replacement and the indirect expense of lost productivity.

The ability of the company to accomplish its objectives and provide for its consumers may be compromised by high turnover. The customer experience can change noticeably even in response to small increases in turnover.

Employee turnover costs are frequently unforeseen and hence not accounted for.

Learn more about inventory turnover

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During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the compan
juin [17]

Answer:

1) For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale.

  • original cost = $9,800
  • accumulated depreciation = $1,020
  • cash received = $5,980

2) Sanchez Company uses the indirect method for the Operating Activities section of the cash flow statement. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Operating Activities?

  • the loss on sale of equipment ($2,800) should be added to the cash flows from operating activities.

3) What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Investing Activities?

  • the cash received ($5,980) should be added to the cash flow from investing activities

Explanation:

equipment cost = beginning equipment - ending equipment = $20,000 - $10,200 = $9,800

equipment's accumulated depreciation = beginning accumulated depreciation + depreciation expense - ending depreciation = $1,950 + $860 - $1,790 = $1,020

book value = $9,800 - $1,020 = $8,780

cash received = book value - loss = $8,780 - $2,800 = $5,980

3 0
3 years ago
Financial Institutions are described as having an asset transformation function. Explain this function and describe how a bank t
anyanavicka [17]

Answer:

In simple words, Asset transformation can be understood as the process of turning small denominational, instantly available, and generally riskless deposit accounts into lenders moderately risky, high denomination assets that are returned according to a specified schedule–from obligations (deposits) with distinct traits.

4 0
3 years ago
A proposed new project has projected sales of $132,000, costs of $66,000, and depreciation of $13,500. The tax rate is 30%. Calc
Verizon [17]

Answer:Operating cash flow $ _50,250__

Yes, the answer is same in each case

Explanation:

a)   EBIT + Depreciation - Tax

= ($132,000-$66,000-$13,500) + $13,500 - Tax

= $52,500 + $13,500-(30% x $52,500)

=$52,500 + $13,500-15,750

EBIT + Depreciation - Tax=$50,250

b)Top down OCF = EBIT - (EBIT x Tax) + Depreciation  

Top down OCF = $52,500  - ($52,500 x 30%) +  $13,500  

Top down OCF = $52,500 -15,750 + $13,500

Top down OCF =$50,250

Tax shield OCF =(Sales - Cost)(1-t) + Depreciation (t)

Tax shield OCF = ($132,000-$66,000) (1-0.30) + ($13,500 x0.30)  

Tax shield OCF =$66,000 x 0.7 + 4,050

Tax shield OCF = 46,200+ 4,050

Tax shield OCF = $50,250

Bottom Up OCF = Net Income + Dep

Bottom Up OCF =($132,000-$66,000-$13,500 ) - Tax ) + Dep

Bottom Up OCF = $52,500-(0.3 x $52,500 )+ $13,500

Bottom Up OCF = $52,500 -15,750 + $13,500

Bottom Up OCF =$50,250

2. Yes, the answer is same in each case

4 0
3 years ago
The ledger of Marin Inc. on March 31, 2017, includes the following selected accounts before adjusting entries.
Amanda [17]

Answer:

Explanation:

The adjusting entries are shown below:

1. Prepaid insurance expense A/c Dr $280

            To Prepaid insurance A/c                    $280

(Being prepaid insurance is adjusted)

2. Supplies expense A/c Dr $3,005 ($3,970 - $965)

         To Supplies A/c                       $3,005

(Being supplies adjusted)

3. Depreciation Expense A/c Dr $190

          To Accumulated depreciation     $190

(Being depreciation expense is adjusted)

4. Unearned service revenue A/c Dr $4,680  ($11,700 × 2 ÷ 5)

           To  service revenue                                $4,680

(Being unearned service is adjusted)

4 0
3 years ago
Choose the appropriate stage of the venture life cycle in which the following activities would occur.
Aleksandr [31]

Answer:

  • Transition from one-person leadership to team management leadership  - Growth
  • New-product development  - Innovation or decline
  • Search for capital - Start-up
  • Increased competition  - Stabilization
  • Venture assessment - New-Venture Development
  • Attempts to acquire other firms  - Innovation or decline
  • Consumer indifference to the entrepreneur's goods or services  - Stablization
  • Accumulation of resources  - New-Venture Development
  • Major changes in entrepreneurial strategy  - Growth
  • Development of an effective entrepreneurial team - Start-up

7 0
3 years ago
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