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Genrish500 [490]
3 years ago
11

Next year's pro forma statement is based on an annual increase in sales of four percent. The firm is currently operating at 85 p

ercent of capacity. Net working capital and all costs vary directly with sales. The tax rate and the dividend payout ratio are fixed. Given this information, the C 0:45:52 a) total assets will increase by less than four percent b) depreciation expense will decrease by four percent c) retained earnings will increase by 85 percent of projected net income. d) total liabilities and owners' equity will increase by four percent e) projected dividends must equal the current dividends.
Business
1 answer:
ELEN [110]3 years ago
7 0

Answer: a) total assets will increase by less than four percent

Explanation:

Since the tax rate and the dividend payout ratio are fixed, and you have net working capital and all costs varying directly with sales, the total assets will increase by a value that is less than the annual increase in sales.

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Knowledge Check 01 Melas Company changed from the LIFO to the FIFO inventory costing method on January 1, Year 3. Inventory valu
NemiM [27]

Answer:

An adjustment to retained earnings is necessary when when there is a change from LIFO to FIFO.

Calculating the effect on retained earnings:

- In the year 1 company followed LIFO and recorded ending inventory at $177500. Had it followed FIFO it would have recorded at $195000. So there would be increase in income of $17500 (195000 - 177500).

- In year 2 it followed LIFO and recorded opening inventory at $177500 and closing inventory at $355000 and thereby recording Net closing stock of $177500 (355000 - 177500). Had it followed FIFO it would have recorded a net stock of $195000.(390000-195000). So there would be increase in income by of $17500 (195000 - 177500).

So in total of 2 years there would be an increase of $35000 Net income i.e., Retained earnings and increase in stock value of $35000.

The journal entry is:

Inventory A/c Dr $35,000

To Retained earnings A/c $35,000

Explanation:

4 0
3 years ago
Identify two ways lean production might be achieved
Nata [24]

Answer:

VJNJMJNBGNFVF VGJFKVKFKRKELÑKTKFKLRGRLBG

Explanation:NBGNNUKIKUUHKNU6GGGTGJ

4 0
2 years ago
The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures
hoa [83]

Answer:

The predicted value of Revenue is $98.24.

Explanation:

The data provided is for the weekly gross revenue, the amount of television advertising and the amount of newspaper advertising.

Determine the regression equation developed to estimate the amount of weekly gross revenue based on television advertising using Excel.

Consider the Excel image for Summary Output for Weekly Revenue Vs. T.V. Adv.

The estimated regression equation with the amount of television advertising as the independent variable is:

<em>Revenue </em>= 89.31 + 1.27 <em>TVAdv</em>

Consider the Excel image for Summary Output for Weekly Revenue Vs. T.V. Adv. & News Adv.

The estimated regression equation with both television advertising and newspaper advertising as the independent variables is:

<em>Revenue </em>= 83.78 + 1.78 <em>TVAdv</em> + 1.47 <em>NewsAdv </em>

For TVAdv = $4.9 and NewsAdv = $3.9 predict the value of Revenue as follows:

\text{Revenue} = 83.78 + 1.78\ \text{TVAdv} + 1.47\ \text{NewsAdv}

             =83.78 + (1.78 \times 4.9) + (1.47 \times 3.9)\\\\=98.235\\\\\approx 98.24

Thus, the predicted value of Revenue is $98.24.

5 0
3 years ago
According to the Consider This box about hypothetical countries Slogo, Sumgo, and Speedo, small differences in __________ make f
Oxana [17]

Answer:

C

Explanation:

According to the Consider This box about hypothetical countries Slogo, Sumgo, and Speedo, small differences in economic growth rates make for large differences in real GDP per capita over several decades, assuming the same growth of population for each country.

For small countries ( less population and same growth of population over the years) even small growth rates makes a large change in  real GDP per capita over the years.

3 0
3 years ago
Failure to record the adjusting entry for deferred revenue now earned causes liabilities on the balance sheet to be what
zlopas [31]

Answer:

overstated

Explanation:

Adjusting entry is a term used in the accounting process, which describes journal entries usually carried out at the end of an accounting period to assign income and expenditure to the period in which they actually happened.

However, the journal entry to identify a deferred revenue is to debit or increase cash and credit or increase a deposit or another liability account.

Hence, Failure to record the adjusting entry for deferred revenue now earned causes liabilities on the balance sheet to be what OVERSTATED

8 0
3 years ago
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