Answer and Explanation:
The computation is shown below;
For Alternative A
Cost to buy new machine -$119,000.00
Cash received $55,000.00
Reduction in variable manufacturing cost ($33400 - $23000) ×5 $52,000.00
Total change in net income -$12,000.00
For Alternative B
Cost to buy new machine -$112,000.00
Cash received $55,000.00
Reduction in variable manufacturing cost ($33400 - $10200) × 5 $116,000.00
Total change in net income $59,000.00
So here Xinhong should purchase a machine that belong from Alternative B.
Explanation:
The computation of inventory turnover and the days sales in inventory is shown below:
Inventory turnover ratio equals to
= Cost of goods sold ÷ average inventory
where,
Average inventory = (Opening balance of inventory + ending balance of inventory) ÷ 2
For 2017, it would be
= $(578,825) ÷ {($102,900 + $93,250) ÷ 2}
= $(578,825) ÷ ($98,075)
= 5.90 times
For 2016, it would be
= ($361,650) ÷ {($98,000 + $93,250) ÷ 2}
= ($361,650) ÷ ($95,625)
= 3.78 times
Now the days sales in inventory is
= Total number of days in a year ÷ inventory turnover ratio
For 2017, it would be
= 365 days ÷ 5.90 times
= 61.86 days
For 2016, it would be
= 365 days ÷ 3.78 times
= 96.56 days
We assume there are 365 days in a year
Answer:
a is the acceleration of the declaration
Answer:
Comparability : Inter company comparison , Consistency : Company time series comparison.
Explanation:
Consistency is quality of accounting information, enabling the same company's financial performance comparison over different periods of time. Consistency needs stable accounting methods used for a considerable period of time, unless their changing is necessary.
Eg : Using whichever method straight line or written down value - to calculate depreciation, should not be changed unless necessary.
Comparability is the quality of accounting information, enabling the company's financial performance comparison with other companies. It needs accounting methods following generally accepted accounting principles.
Eg: Accrual basis of accounting is generally standardised, acceptable and using other i.e cash basis won't enable company's comparison with others.
Consistency and comparability are very crucial to analyse company's financial performance - growth with time, growth as per industry standards respectively.
It was like 7 months ago, but it’s barely mentioned now