Answer: You are trying to find out if the statement is true or false? It is FALSE.
Explanation: Analysts should be concerned with the material movements in the company's financial statements. Although as stated in the question, small changes could amount to material movement but that applies in situations where there is a huge outflow but at the same time, there is similar inflow, so the net effect is negligible on a particular financial statements line item. This instance is not relevant to financial analysts but only the concern of internal control and or internal audit.
Financial analysts are interested in what the key drivers of the financial statements are. These drivers in most cases are an avenue to explain what has transpired in the financials between the current period and the preceding one by way of writing a commentary and providing a succinct and holistic explanation of the financial statements.
It would be time consuming and too operational if analysts are concerned with every percentage movement in the financial statements.
Answer:
It will take 10 years to have $20,000 on investment of $10,000.
Explanation:
Annual Rate of return = r = 7%
Compounded Value / Future Value = FV = $20,000
Investment Value / Present Value = PV = $10,000
Use Future value formula to solve this question:
Future Value = Present Value x ( 1 + Number of Year )^Number of year
FV = PV x 
$20,000 = $10,000 x 
=
$2 = 
Log 2 = n log 1.07
0.30 = n x 0.03
n = 
n = 10.00
n = 10 year (rounded off to nearest year )
It will take 10 years to have $20,000 on investment of $10,000.
Answer:
Annual maintenance on its equipment = Expensed
Remodelling of offices = Capitalised and depreciated.
Rearrangement of the shipping and receiving area = Capitalised and depreciated.
Addition of a security system = Capitalised and depreciated.
Explanation:
Annual maintenance on its equipment = $5,400 ( This is a normal maintenance bill and can be entirely expensed in the year it occurs.)
Remodelling of offices = $22,000 ( This is a part of the transformation process and should be capitalised and depreciated accordingly.)
Rearrangement of the shipping and receiving area = $35,000 (Since this is a reorganisation that would increase efficiency, it should be capitalised and depreciated.)
Addition of a security system = $25,000 ( Since this is an addition of asset, it should be capitalised and depreciated.)
Answer:
Cream $560
Explanation:
Units Selling price Sales value Percentage of sales value Allocated cost
Cream200 15 3,000 3,000/5,400 = 56% 1,000 x 56% = $560
Skimmed
milk600 4 2,400 2,400/5,400 = 44% 1,000 x 44% = $440
Total $5,400 100% $1,000
Therefore the amount of joint cost allocated to cream is $560
