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Arte-miy333 [17]
3 years ago
10

Martin Aerospace is currently operating at full capacity based on its current level of assets. Sales are expected to increase by

4.5 percent next year, which is the firm's internal rate of growth. Net working capital and operating costs are expected to increase directly with sales. The interest expense will remain constant at its current level. The tax rate and the dividend payout ratio will be held constant. Current and projected net income is positive. Which one of the following statements is correct regarding the pro forma statement for next year?
a. Total assets will increase at the same rate as sales.
b. Long-term debt will increase in direct relation to sales.
c. Owners' equity will remain constant.
d. The pro forma profit margin is equal to the current profit margin.
e. Retained earnings will increase at the same rate as sales.
Business
1 answer:
zhuklara [117]3 years ago
7 0

Answer:

A. Total assets will increase at the same rate as sales.

Explanation:

<em>Option E</em> is wrong because dividends will not increase at the same rate; therefore, retained earnings will not increase at the same rate as sales.

<em>Option D</em> is incorrect because sales are increasing, which leads to a different profit margin.

As sales increases to a specific percent, owners' equity will not remain constant. So, <em>option C</em> is wrong.

<em>Option B</em> is wrong because long-term debt will not change.

Option A is correct because if sales are credit sales; therefore, total assets will increase at the same rate as sales.

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The type of marketing system Java Jane's  has most likely adopted is </span><span>a contractual marketing system.</span>
7 0
3 years ago
Which of the following is not an objective of proactive scanning? Identify and define potential opportunities and threats. Paint
tigry1 [53]

The option that is not an objective of proactive scanning is: Paint a picture of the future 20+ years into the future.

<h3>What is proactive scanning?</h3>

Proactive scanning is the use of automated tools to detect suspicious programs/contents in library, driver, and executable files.

This scanning method can be used to detect threats and important events. They could also serve useful functions to employers and managers.

Learn more about proactive scanning here:

brainly.com/question/26199042

6 0
2 years ago
Grand River Corporation reported pretax book income of $620,000. Included in the computation were favorable temporary difference
Alex

Answer:

The corporation's current income tax expense or benefit would be $86,940.

Note: The Internal Revenue Service (IRS) 2019 tax rate of 21% for corporation is used since the tax rate is not given in the question.

Explanation:

Details                                                                Amount ($)

Pretax book income                                             620,000

Favorable temporary differences                       (160,000)    

Unfavorable temporary differences                    106,000

Favorable permanent differences                    <u> (152,000) </u>

Adjusted income                                                  414,000

Tax expenses (at 21%)                                     <u>   (86,940)  </u>

Profit after tax                                                     <u> 327,060   </u>

Therefore, the corporation's current income tax expense or benefit would be $86,940.

Note: The Internal Revenue Service (IRS) 2019 tax rate of 21% for corporation is used since the tax rate is not given in the question.

7 0
3 years ago
During February, $186,500 was paid to creditors on account, and purchases on account were $201,400. Assuming the February 28 bal
Kobotan [32]

Answer:

Accounts payable (opening) = $ 45000.

Account rec during year = $464570

Cash payment during year = $351570.

Explanation:

As we know that:

 Account payable (open) + Purchases - Accounts payable(end) = Paid cash

 Accounts payable (open) + 201400-59900= 186500

Accounts payable (open)= 186500+59900-201400

                                       = $45000.

As we know that:

Account receivables (open) + A/c receivable during year - A/c receivable (end)=Cash collected.

   A/c receiable during period= 449600-115800+130770

                                       = $464570.

As we know that:

Cash (open) + Cash collected - Cash (end)= Cash payment during period.

46200+248600 - 56770 = Cash payments during year.

Cash payment during year = $351570.

4 0
3 years ago
At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $779,000. Chan records it
ki77a [65]

Answer and Explanation:

The journal entries are as follows

On December 31

Bad debt expense Dr  $2,337     ($779,000 × 0.30%)

     To Allowance for doubtful debts  $2,337

(Being the estimated bad debt expense is recorded)      

For recording this we debited the bad debt expense as it increased the expenses and credited the allowance as it decreased the assets  

On Feb 01

Allowance for doubtful debts Dr $390

    To Account receivable $390

(Being the written off amount is recorded)

For recording this we debited the allowance as it increased the allowance and credited the account receivable as it decreased the assets

On June 5

Account receivable $390

     To Allowance for doubtful debts Dr $390

(Being the uncollected amount is recorded)

For recording this we debited the account receivable as it increased the assets and credited the allowance as it decreased the assets  

On June 5

Cash Dr $390

      To Account receivable $390

(Being the cash received on account is recorded)

For recording this we debited the cash as it increased the assets and credited the account receivable as it decreased the assets  

3 0
3 years ago
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