1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
puteri [66]
3 years ago
9

Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with a proviso that they

must be paid for within 30 days but can be returned for a full refund credit within 90 days. In 2009, Thomas shipped and billed book titles totaling $760,000. Collections, net of return credits, during the year totaled $690,000. The company spent $300,000 acquiring the books that it shipped. a. Using accrual accounting and the preceding values, show the firm
Business
1 answer:
nydimaria [60]3 years ago
6 0

Answer:

Explanation:

In this question, we have to find out the net profit and the net cash flow which is shown below:

Net profit = Sales - cost of goods sold

= $760,000 - $300,000

= $460,000

And, the net cash flow would be

= Cash collections - Cost of goods sold

= $6,90,000 - 3,00,000

= $3,90,000

Hence, the cash flow statement is more beneficial for the company as the income statement does not state about the collection amount which results in the absence of the shareholder contribution wealth.

You might be interested in
​________ is the extent to which a selection tool produces consistent results over time.
shusha [124]
This answer would be reliability.
6 0
3 years ago
Contingent liabilities should be recorded in the accounts when: it is possible the future event will occur the amount of the lia
slava [35]
Either of the above would be correct
3 0
3 years ago
How will the rapo rate cut affect the economy?​
jeka94

Answer:

The decrease in repo rates is to aim at bringing in growth and improving economic development in the country. Consumers will borrow more from banks thus stabilizing the inflation. A decline in the repo rate can lead to the banks bringing down their lending rate

3 0
3 years ago
...........................................
Novay_Z [31]
Dotdotdotdotdotdotdotdotdotdotdotdot
3 0
3 years ago
Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poo
wolverine [178]

Answer: See explanation

Explanation:

a. Compute the incremental income after taxes that would result from these projections:

Sales increase= $200,000

Less: Uncollectible accounts:

= 7% × $200,000

= ($14,000)

Annual incremental value= $186,000

Less: Collection cost:

= 3% × $200,000

= ($6000)

Less: Production and selling cost:

= 80% × $200,000

= ($160,000)

Incremental income before tax= $20000

Tax at 30% = ($6000)

Incremental income after tax = $14000

b. Compute the incremental Return on Sales if these new credit customers are accepted If the receivable turnover ratio is expected to be 4 to 1 and no other asset buildup is needed to serve the new customer.

Incremental Return on Sales will be:

= Incremental income after taxes ÷ Increase in sales

= $14000/$200000

= 7%

c. Compute the additional investment in Accounts Receivable.

Since the receivable turnover ratio will be 4, then the additional investment in the accounts receivable will be:

= Additional credit sales/Receivable turnover ratio

= $200000 /4

= $50,000

Therefore, the additional investment in the accounts receivable will be $50,000.

d. Compute the incremental Return on New Investment.

The incremental return on new investment will be:

= Incremental income after taxes/Additional investment

= $14000/$50000

= 28%

e. If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

Yes, the numbers implies that trade credit should be extended to these new customers. This is because the incremental return on the new investment is 28%, and this is higher than the rate of return on investment which is 20%.

5 0
3 years ago
Other questions:
  • Which best describes the benefits of renting a home?
    12·2 answers
  • Crystal is teaching a newly promoted supervisor how to use the company’s performance management system. The supervisor asks Crys
    8·1 answer
  • Suppose the U.S. economy slips into a recession. In response, the Federal Reserve cuts the federal funds rate in order to avoid
    7·1 answer
  • 9)What is the dominant strategy for bidders in an English oral auction?9)A)Bid until the previous bid price equals the reservati
    12·1 answer
  • Find the present worth in year 0 of $60,000 in year 3 and amounts increasing by 15% per year through year 10 at an interest rate
    12·1 answer
  • At the Sol Wave House hotel, located on the beautiful island of Majorca, Spain, a Twitter concierge stays in constant contact wi
    9·1 answer
  • Widget Corp., a manufacturing firm in Lithuania, exports its manufactured tools to Wales. To protect its domestic firms, the Gov
    5·1 answer
  • At December 31, 2019, the trial balance of Skysong Company contained the following amounts before adjustment Debit Credit Accoun
    11·1 answer
  • For which capital component must you make a tax adjustment when calculating a firmâs weighted average cost of capital (WACC)?
    7·1 answer
  • the ceo of what company stepped down this week, after having co-founded the business and led it from 2006-2008 and from 2015-202
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!