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Leviafan [203]
3 years ago
11

SNC has its own, modest internet-based business. However, the company has been approached by Golden Years Nutraceuticals, a much

larger online distributor of third-party brands with connections to a national healthcare website endorsed by a leading senior advocacy association. Therefore, Golden Years reaches a large-and increasing-consumer base of older Americans. This opportunity would generate an additional 10% increase in sales in 2016, followed by increases of 5% in 2017 and 3% in 2018. Increasing the percentage of SNC's business that is conducted online would decrease DSO, because internet sales are collected very quickly. Accounts receivable would decrease by 7 days in the first year and by an additional 3 days in 2017, for a total improvement of 10 days. In 2018, the DSO would decline by another 2 days-in effect, 12 days lower than at the start of 2016. Going forward, the DSO would stay at this lower level and SNC's profit margin would remain unchanged. What would you like to do about this opportunity?
Accept or Decline
2016 2017 2018 Post 2018
Incremental Summary Income Statement ($ in thousands)
Change in Sales $1,600 $2,480 $3,034 $3,034
Change in Cost of Sales $1,492 $2,313 $2,830 $2,830
Change in EBIT $108 $167 $204 $204
Incremental Balance Sheet ($ in thousands)
Change in Accounts Receivable $145 $241 $289 $289
Change in Inventories $368 $570 $698 $698
Change in Accounts Payable $162 $251 $307 $307

Business
1 answer:
gregori [183]3 years ago
4 0

Please find question attached

Answer and Explanation:

Find full answer and explanation attached

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General Product Inc. distributed 150 million coupons in 2021. The coupons are redeemable for 40 cents each. General anticipates
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General Product Inc.'s coupon liability as of December 31, 2021, is $24 million.

<h3>What is coupon liability?</h3>

Coupon liability is a contingent liability arising from coupon redemption obligations.

As a potential future liability, only the amount that can be reasonably estimated should be recognized.

<h3>Data and Calculations:</h3>

Distributed coupons = 150 million

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Total potential liability from coupons = $60 million (150 million x $0.40)

Probability of occurrence = 70%

Estimated redeemable liability = $42 million ($60 million x 70%)

Redeemed coupons in 2021 = 45 million or $18 million (45 million x $0.40)

Recognized contingent liability for 2021 = $24 million ($42 - $18 million)

Thus, General Product Inc.'s coupon liability as of December 31, 2021, is $24 million.

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Ruston Company had Net Income for 2020 of $6,200,000. The firm invested $4,000,000 in manufacturing equipment during 2020. The e
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STATEMENT OF CASH FLOW

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Cash flow from operating Activities:

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Net Cash provided by operating activities $7,000,000

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Cash flow from Investing activities:

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Net Cash used in Investing activities ($4,000,000)

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