Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) Company had balance sheet and income statement information for 2003 which are as follows:

 

Balance Sheet
Cash $20
A/R 1,000
Inventories 5,000
Total C.A. $6,020 Debt 4,000
Net F.A. 2,980 Equity 5,000
Total Assets $9,000 Total Claims $9,000

 

 

Income Statement
Sales $10,000
Cost of Goods Sold $9,200
EBIT $800
Interest (10%) $400
EBT $400
Taxes (40%) $160
Net Income $240

 

Industry average inventory turnover is 5. You think you can change the inventory control system so as to cause your turnover to equal industry average, and this change is expected to have no effect on either sales or cost of goods sold. Cash generated from decreasing inventories will be used to purchase tax-exempt securities which have a? percent rate of return. Determine the profit margin be after the change in inventories reflected in income statement?

a. 2.1%
b. 2.4%
c. 4.5%
d. 5.3%
e. 6.7%

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M922154

Have any Question? 


Related Questions in Accounting Basics

Discussionpart 1 please respond the following question no

Discussion PART 1 PLEASE RESPOND THE FOLLOWING QUESTION NO LESS THEN 350 WORDS (ORIGINAL WORK, NO PLAGIARISM, 1 Reference "Negative Cash Flow" Please respond to the following: • Assess how the free cash-flow method can b ...

You are starting your own internet business you decide to

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business ...

The following data relate to the operations of shilow

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31:        Cash $8,000        Accounts receivable $20,000        Inventory $36,000      ...

Write a 700- to 1050-word summary of the teams discussion

Write a 700- to 1,050-word summary of the team's discussion about IFRS versus GAAP, based on your team collaborative discussions. The summary should be structured in a subject-by-subject format. An introduction and a con ...

Review the provisions of the sarbanes-oxley act of 2002 to

Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.). Identify the provisions that you believe made the most significant imp ...

Write a 300- to 500-word response in which you address the

Write a 300- to 500-word response in which you address the following questions from Case, Charitable Contributions and Debt: A Comparison of St. Jude Children's Research Hospital/ALSAC and Universal Health Services: What ...

Auditing and professional practice assignmentcase study 1

Auditing and Professional Practice Assignment Case Study 1: Consider each of the following independent situations: (a) City Ltd, a property developer, has several major projects in progress in Brisbane's central business ...

Question 1under the allowance method bad debt expense is

Question 1 Under the allowance method, Bad Debt Expense is recorded A. as an estimate. B. when an individual account is written off. C. several times during the year as needed. D. None of the above Question 2 Which amoun ...

1 what does it mean to create a culture of honesty openness

1. What does it mean to create a "Culture of Honesty, Openness, and Assistance?" Give some examples from an organization with which you have been affiliated. (250 words) 2. Review the section Preventing Fraud-A Sumary an ...

Develop a powerpoint presentation that answers the

Develop a PowerPoint presentation that answers the following questions: Prepare a financial analysis of Warehouse Distribution, Inc.(I will upload the income statements for Warehouse Distribution), comparing the firm's f ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro