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2 years ago

Perform a horizontal analysis on the following information providing both the dollar amount and percentage change.

Business

1 answer:

Vera_Pavlovna [14]2 years ago

6 0

Answer and Explanation:

The computation of the percentage of each amount is as follows;

<u>Particulars 2020 Change Percentage of change </u>

a b (b ÷ a) × 100

Cash $170,000 $500,000 294%

Accounts Receivable $710,000 $270,000 38%

Inventory $520,000 $190,000 37%

Long Term Assets $2,100,000 -$200,000 -9.52%

Total Assets $3,500,000 $760,000 21.71%

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Finisher Inc. sells merchandise of $250,000 in 2020 that includes a three-year limited warranty. Warranty costs are estimated to

N76 [4]

Answer: See explanation

Explanation:

a. Record the warranty accrual at the time of sale in 2020.

Debit Warranty expense = $250,000 × 1% = $2,500

Credit Warranty Liability $2,500

(To record the warranty accrual)

b. Record the adjustment to the warranty accrual for actual warranty costs in 2020.

Debit Warranty Liability $800

Credit Cash and Payables $800

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2 years ago

If the variable overhead efficiency variance is $500 unfavorable and the variable overhead spending variance is $100 favorable,

Vera_Pavlovna [14]

Answer:

a. Debit to variable overhead efficiency variance

d. Credit to variable overhead spending varian

Explanation:

Based on the information given in a situation where a variable overhead efficiency variance is UNFAVORABLE it will be DEBITED and variable overhead spending variance that is FAVOURABLE will be CREDITED.

Therefore the journal entry will include a:

a. Debit to variable overhead efficiency variance

d. Credit to variable overhead spending Variance

7 0

2 years ago

Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 50 billion cases of cola were sold ever

Georgia [21]

Answer:

U.S. Tax Burden on Cola:

The amount of the tax on a case of cola is $4 per case. Of this amount, the burden that falls on consumers is $1 per case, and the burden that falls on producers is ___$3______ per case.

The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.

a. True

b. False

Explanation:

The tax burden on consumers, which is represented by the difference in the price of cola from $5 to $6 per unit is $1 ($6 - $5). However, the cash received by producers reduced by $3 from $5 to $2. This shows that the total tax burden on both consumers and producers is $4 ($1 + $3).

This represents a total tax burden of $4 or about 67% based on the new selling price of cola or 80% based on the old selling price of cola.

"The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers alone. This because the price of cola would have increased to $9 per unit. Since the demand for cola in this instance is elastic, this change in price would have caused a more than 80% change in the quantity demanded.

4 0

3 years ago

Strategic positioning attempts to achieve sustainable competitive advantage by ______.

matrenka [14]

Its achieve by preserving what is distinct about the company.

Strategic positioning is basically an effort made by an organization in order to distinguishes itself in a valuable way from its competitors and delivers value to clients in way different from others.

According to Porter, he states that a "company's relative position within its industry matters for performance".

A proper strategic positioning have a way of influencing how customers perceive a product in relation with other competitors product.

In conclusion, this type of positioning helps to achieve sustainable competitive advantage by preserving what is distinct about the company.

Learn more about Strategic positioning here

<em>brainly.com/question/8999192</em>

5 0

2 years ago

Two online magazine companies reported the following in their financial statements: BetterWorth Outdoor Fun 2018 2017 2018 2017

Rudik [331]

Answer:

BetterWorth and Outdoor Fun ROE and P/E Ratio Analysis:

1-a) Computation of 2018 ROE for each company.

ROE = Return on Equity. It is a percentage of the net income over equity. It is best to use the average equity, if given two balance sheets. See explanation for further clarification.

Average Equity = Two balance sheets' equity divided by 2.

BetterWorth's Average Equity = (597,186 + 522,814) / 2 = 560,000

Outdoor Fun's Average Equity = (457,151 + 477,049) / 2 = 467,100

BetterWorth's 2018 ROE = 111,000 / 560,000 x 100 = 19.82%

Outdoor Fun's 2018 ROE = 92,420 / 467,100 x 100 = 19.79%

1-b) BetterWorth's appears to be generating greater returns on stockholders' equity in 2018. It generated 19.82% as against Outdoor Fun's 19.79%, especially with the use of average equity.

2-a) Computation of 2018 P/E Ratio for each company:

P/E Ratio = Price/Earnings Ratio. It is expressed as the market price per share divided by earnings per share.

BetterWorth's 2018 P/E Ratio = 54.90 : 3.4 = 16.15 : 1

Outdoor Fun's 2018 P/E Ratio = 33.05 : 2.30 = 14.37 : 1

2-b) Investors appear to value BetterWorth more than Outdoor Fun. This is because investors are ready to pay 16.15 times more for each unit of the earnings of BetterWorth. For Outdoor Fun, investors are only willing to pay 14.37 times more for each unit of its earnings.

Explanation:

A) ROE = Return on Equity. It is expressed as a percentage of net income over average equity. In the above calculations, we used the average equity. The reason is this: average equity smoothens the mismatch between the income statement and the balance sheet.

But, what does ROE measure? It measures a company's management effectiveness in using assets to make profits for shareholders.

Had we used the 2018 equity, Outdoor Fun would have appeared to have performed relatively better than BetterWorth over ROE.

B) P/E ratio relates a company's share price to its earnings. The P/E ratio shows that the company's stock is overvalued or undervalued. It depicts investors' confidence or lack of it in the company's ability to produce more or less earnings. Without earnings expectation, investors cannot price a company's stock highly. It is therefore a stock valuation tool widely used by financial analysts and investors.

6 0

2 years ago