PR 1-6 (LO 1-7) John Deere's $4 billion commercial and consumer equipment division implemented supply chain management software... Required: John Deere's $4 billion commercial and consumer equipment division implemented supply chain management software and reduced its inventory by $500 million. As sales continued to grow, the company has been able to keep its inventory growth flat. Questions Supply chain software allows a business to reduce which of the following balance sheet accounts? If the reduction in inventory reduces the need for warehouses for storing product, which income statement accounts would this affect? A reduction in inventory frees up cash to reduce long-term debt, which income statement account would this affect? Inventory Revenues Answers

PR 1-6 (LO 1-7) John Deere's $4 billion commercial and consumer equipment division implemented supply chain management software... Required: John Deere's $4 billion commercial and consumer equipment division implemented supply chain management software and reduced its inventory by $500 million. As sales continued to grow, the company has been able to keep its inventory growth flat. Questions Supply chain software allows a business to reduce which of the following balance sheet accounts? If the reduction in inventory reduces the need for warehouses for storing product, which income statement accounts would this affect? A reduction in inventory frees up cash to reduce long-term debt, which income statement account would this affect? Inventory Revenues Answers

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 1A: Costco is the largest chain of membership warehouse clubs in the world based on sales volume, and it...

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Required information [The following information applies to the questions displayed below.] Suresh Company reports the following segment (department) income results for the year. Sales Department M $ 68,000 Department N $ 38,000 Department 0 $ 65,000 Department P $ 47,000 Department T $ 33,000 Total $ 251,000 Expenses Avoidable 12,300 Unavoidable Total expenses Income (loss) 53,800 66,100 39,400 15,600 55,000 23,900 4,700 28,600 16,500 36,400 42,300 13,300 134,400 123,800 52,900 55,600 258,200 $ 1,900 $ (17,000) $ 36,400 $ (5,900) $ (22,600) $ (7,200) b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated. Total increase in income $ 3,700
Required information [The following information applies to the questions displayed below.] Suresh Company reports the following segment (department) Income results for the year. Department P $ 66,000 Sales Expenses Avoidable Unavoidable Total expenses Income (loss) Department Department M Department N Department O Department P Department T Department M Department N $ 85,000 $ 45,000 Decision 17,800 58,200 76,000 $ 9,000 46,000 22,200 68,200 $ (23,200) Department O $ 79,000 19,300 5,800 25,100 $ 53,900 a. If the company plans to eliminate departments that have sales less than avoidable costs. 22,000 53,900 75,900 $ (9,900) Department T $ 39,000 52,200 21,000 73,200 $ (34,200) Total $ 314,000 157,300 161,100 318,400 $ (4,400) department(s) would be eliminated?
A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Company A C Sales $ 340,000 $ 760,000 $ 650,000 Net operating income $ 40,000 Average operating assets $ 164,000 $ 159,000 Return on investment (ROI) 21 % 18 % % Minimum required rate of return: Percentage 18 % % 10 % Dollar amount $ 57,000 Residual income $ 5,000 %24
Comparative data on three companies in the same service industry are given below Required: 2. Fill in the missing information. (Round the "Turnover" and "ROI" answers to 2 decimal places.) A B C Sales $4,818,000 $2,010,000 Net operating income $915,420 $402,000 Average operating assets $2,190,000 $3,430,000 Margin % % 3% Turnover 2.20 Return on investment (ROI) 12.00%
Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to Digitized Corp. and Very Network, Inc. and have assembled the following data. LOADING... (Click to view the income statement data.) Data Table Selected income statement data for the current year: Digitized Very Network Net Sales Revenue (all on credit) $418,290 $494,940 Cost of Goods Sold 210,000 256,000 Interest Expense 0 15,000 Net Income 62,000 70,000 (Click to view the balance sheet and market price data.) Data Table Selected balance sheet and market price data at the end of the current year: Digitized Very Network Current Assets: Cash $24,000 $21,000 Short-term Investments 42,000 19,000 Accounts Receivables, Net 36,000 46,000 Merchandise Inventory 67,000 98,000 Prepaid Expenses 22,000 18,000 Total…
Required information Annie's Homemade Ice Cream provided the following data for this year: Sales Net operating income Average operating assets Required: Consider each question below Independently. Carry out all computations to two decimal places. $ 300,000 $ 54,000 $ 187,500 1. Compute the company's margin, turnover, and return on Investment (ROI) for this year. 2. The company is considering buying some billboard advertising with the expectation it would grow next year's sales and net operating Income by $50,000 and $20,000, respectively. If this plan is Implemented, what would become next year's margin, turnover, and ROI? 3. The company is considering buying a second cargo trailer and mobile cold plate push cart to expand its mobile sales. If the company Implements this plan, It expects next year's sales, net operating Income and average operating assets to Increase by $80,000, $30,000, and $10,000, respectively. What would become next year's margin, turnover, and ROI? Complete this…
Problems 1. A condensed income statement for the Commercial Division of McLean Manufacturing Inc. for the year ended December 31, 2020, is as follows: Category Sales Cost of goods sold Gross profit Operating expenses Income from operations Invested assets Dollar Amount $3,600,000 2,450,000 1,150,000 600,000 550,000 2,500,000 Assume that the Commercial Division received no charges from service departments. The president of McLean Manufacturing has indicated that the division's return on a $2,500,000 investment must be increased to at least 21% by the end of the next year if operations are to continue. The division manager is considering the following three proposals: Proposal 1: Transfer equipment with a book value of $312,500 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation expense on the old equipment by $105,000. This increase in expense would be included as part of the cost of goods sold. Sales would…
Comparative data on three companies in the same service industry are given below: Required: 2. Fill in the missing information. (Round the "Turnover" and "ROI" answers to 2 decimal places.) Company A B C Sales $3,876,000 $930,000 Net operating income $581,400 $139,500 Average operating assets $2,280,000 $3,270,000 Margin 5 % 7 % 3 % Turnover 1.60 Return on investment (ROI) % 4.50 % %
Now it's time for you to practice what you've learned. Suppose that Royval Inc has the following data: Total assets turnover Days sales outstanding Inventory turnover ratio Fixed assets turnover Current ratio Gross profit margin on sales: Cash Also suppose that Royval Inc has the following balance sheet: Accounts receivable Inventories Fixed assets Assets Total assets Sales 1.5 36.5 days 5 4 2 30.00% $425,000 Balance Sheet Liabilities Current Liabilities Long-term debt Common stock Retained earnings Total Liabilities and equity Cost of goods sold $114,750 $110,500
[The following information applies to the questions displayed below.] CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales Net operating income Average operating assets $ 4,700,000 $ 188,000 $ 940,000 The following questions are to be considered independently. Required: 1. Compute the company's return on investment (ROI). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI) %
Question 3 A company has just been taken over by new management that believes it can raise earnings before taxes (EBT) from $600 to $1,100, merely by cutting overtime pay and reducing cost of goods sold. Prior to the change, the following data applied: Total assets 7,500 Debt ratio 40% Tax rate 40% BEP ratio 13.31% EBT 600 Sales 10,000 These data have been constant for several years, and all income is paid out as dividends. Sales, the tax rate, and the balance sheet will remain constant. What is the company’s cost of debt?
Now it's time for you to practice what you've learned. Suppose that Royval Inc has the following data: Total assets turnover Days sales outstanding Inventory turnover ratio Fixed assets turnover Current ratio Gross profit margin on sales: Cash Accounts receivable Inventories Also suppose that Royval Inc has the following balance sheet: Fixed assets Total assets Assets Sales 1.5 36.5 days $425,000 5 4 2 30.00% Balance Sheet Liabilities Current Liabilities Long-term debt Common stock Retained earnings Total Liabilities and equity Cost of goods sold $97,750 $93,500