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Talja [164]
2 years ago
7

Cola Inc. and Soda Co. are two of the largest and most successful beverage companies in the world in terms of the products that

they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Cola Inc. Soda Co. Fiscal Year Ended: 2015 2014 2013 2015 2014 2013 Net Sales $ 32,219 $ 27,690 $ 28,944 $ 54,838 $ 40,232 $ 40,251 Accounts Receivable 4,418 3,753 3,081 6,407 4,654 3,724 Allowance for Doubtful Accounts 42 49 45 138 84 64 Accounts Receivable, Net of Allowance 4,376 3,704 3,036 6,269 4,570 3,660 Required: Calculate the receivables turnover ratios and days to collect for Cola Inc. and Soda Co. for 2015 and 2014.
Business
1 answer:
77julia77 [94]2 years ago
4 0

Answer :

Part 1 .The receivables turnover ratios:

                                                  2015                               2014

                                     <u> Cola Inc</u>     <u>Soda Co </u>       <u>Cola Inc </u>       <u>Soda Co</u>

Receivables Turnover 7.36times    8.75times     7.48times       8.80times

Part 2. The days to collect:

                                                 2015                                2014

                                      <u>Cola Inc </u>    <u>Soda Co  </u>         <u>Cola Inc </u>       Soda Co

Days to Collect         49.57days    41.73days          48.83days       41.46days

Explanation :

Receivables Turnover = Sales/Trade Receivables

                                                 2015                                2014

                                      Cola Inc     Soda Co        Cola Inc     Soda Co

Receivables Turnover 32219/4376 54838/6269 27690/3704 40232/4570

                                     7.36times    8.75times     7.48times       8.80times

Days to Collect = Accounts Receivables / (Sales/365)

                                                   2015                                2014

                                     Cola Inc     Soda Co           Cola Inc        Soda Co

Days to Collect    4376/(88,27) 6269/(150,24)   3704/(75,86)   4570/(110,22)

                                49.57days    41.73days          48.83days       41.46days

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Answer:

Nicole's Getaway Spa (NGS)

1. Depreciation Schedules:

A. Straight-line method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $3,000            $16,000            $3,000             $13,000

Year 2         3,000              16,000               6,000               10,000

Year 3         3,000              16,000               9,000                7,000

Year 4         3,000              16,000             12,000                4,000

Year 5         3,000              16,000             15,000                1,000

B. Units-of-production method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $3,600            $16,000             $3,600              $12,400

Year 2         3,450               16,000               7,050                  8,950

Year 3         3,300               16,000             10,350                  5,650

Year 4         3,150                16,000             13,500                  2,500

Year 5        1,500                16,000             15,000                   1,000

C. Double-declining-balance method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $6,400            $16,000             $6,400              $9,600

Year 2         3,840               16,000              10,240                 5,760

Year 3         2,304               16,000              12,544                 3,456

Year 4          1,382               16,000              13,926                 2,074

Year 5         1,074                16,000             15,000                  1,000

2. Sale of machine for $3,000 at the end of year 3:

Journal Entry of disposal:

1) Straight-line method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $9,000

Credit Sale of Equipment $9,000

To close accumulated depreciation.

Debit Income Summary $4,000

Credit Sale of Equipment $4,000

To record the loss from sale of equipment.

2) Units-of-production method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $10,350

Credit Sale of Equipment $10,350

To close accumulated depreciation.

Debit Income Summary $2,650

Credit Sale of Equipment $2,650

To record the loss from sale of equipment.

3) Double-declining method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $12,544

Credit Sale of Equipment $12,544

To close accumulated depreciation.

Debit Income Summary $456

Credit Sale of Equipment $456

To record the loss from sale of equipment.

Explanation:

a) Data and Calculations:

Cost of machine =     $16,000

Residual value =             1,000

Depreciable amount $15,000

Estimated useful life = 5 years

Annual depreciation expense/rate:

A. Straight-line method = $3,000 ($15,000/5)

B. Unit of production method = $1.50 per unit ($15,000/10,000)

Year 1 = $3,600 (2,400 * $1.50)

Year 2 = $3,450 (2,300 * $1.50)

Year 3 = $3,300 (2,200 * $1.50)

Year 4 = $3,150 (2,100 * $1.50)

Year 5 = $1,500 (1,000 * $1.50)

C. Double-declining balance method:

Straight-line method rate = 20% (100/5)

Double-declining rate = 40% (20% * 2)

Year 1 = $6,400 ($16,000 * 40%) Balance $9,600

Year 2 = $3,840 ($9,600 * 40%) Balance $5,760

Year 3 = $2,304 ($5,760 * 40%) Balance $3,456

Year 4 = $1,382 ($3,456 * 40%) Balance $2,074

Year 5 = $1,074 ($2,078 - $1,000) Balance $1,000

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3 years ago
Which of the following statements is TRUE?
9966 [12]
I believe the answer is A. Hope this helps :)
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2 years ago
Bonita earns $31,000 from her job, and she has $1,000 of interest income. She has itemized deductions of $35,000. There are no c
andrezito [222]

Answer:

$0

Explanation:

Bonita is a person, not a company, therefore she cannot record operating losses. This is a not a common situation since you generally don't have more deductions than gross income, but it is a possible situation. For example, if Bonita had a lot of medical expenses during the last year and they accumulated to actually more than her salary. She may have paid them using her savings, selling some assets or by obtaining a loan.

4 0
2 years ago
or due to his success at his current company in getting several new patents. This is an example of ________ capital.
Ket [755]

Complete Question:

Cesar was being recruited by a competitor due to his success at his current company in getting several new patents. This is an example of ________ capital.

Group of answer choices

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Answer:

D) intellectual

Explanation:

In this scenario, Cesar was being recruited by a competitor due to his success at his current company in getting several new patents. Therefore, this is an example of intellectual capital because he was recruited based on his intangible assets which made him excel or succeed.

An intellectual capital can be defined as the value or intangible assets such as skills, copyright, trademarks, experience, patents, knowledge provided by the employees working in an organization and thus, giving the organization a competitive advantage over their rivals in the same industry, as well as earn more profits, increase their customer base and creation of quality products.

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2 years ago
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Answer:

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A. Firm X

B. Firm Y

C. Same variability of operating profits

D. It would depend on tax effect on taxable income

The correct option is B. Firm Y

Explanation:

This is because firm Y has a higher operating leverage than firm X.

<u>Operating Leverage</u> refers to a cost-accounting formula that measures the degree to which a firm can increase operating income by increasing revenue. Operating leverage actually boils down to the analysis of fixed costs and variable costs, and it is highest in companies that have a high fixed operating costs in comparison with variable operating costs. What this means is that this kind of company makes use of more fixed assets. On the other hand, operating leverage is lowest in companies that have a low fixed operating costs when compared with variable operating costs.

Companies with high operating leverage are capable of making more money from each additional sale if they do not have to incur more costs to produce more sales.

Therefore, from the scenario given above, we can conclude that firm Y has a higher operating leverage than firm X, because firm X has lower fixed costs than firm Y, and a higher variable cost than firm Y as well. Hence, firm Y has the potential to make more operating profits from its business activities.

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