The change in the credit policy would result to increase (decrease) in incremental profit of (Use 360 days a year)*
Q: ssom Limited reported the following selected information for the year ended March 31, 2021: Advert...
A: The income statement explains the financial performance of the company for a particular period of ti...
Q: How much is the goodwill on the business combination, assuming both companies qualified as SME?
A: Pearls corporation has acquired net identifiable assets of Start up Company. The net assets and net ...
Q: Prepare the necessary journals for the given transactions 1. Cash paid to Sara BD 600 2. Sold Furnit...
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in...
Q: Sleepy Time is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent i...
A: In this question we have to calculate operating income.
Q: 8. Using an annual interest rate of 9%, how long will it take a deposit of $1,500 to grow to $3,000,...
A: Deposit amount (PV) = $1500 Future value (FV) = $3000 Interest rate (r) = 9%
Q: On July 01, 2021, Parent, Inc. acquired most of the outstanding common stock of Subsidiary Company f...
A: Goodwill is an intangible asset for a company. It can either be build overtime or can be purchased f...
Q: Bulldogs Inc. loaned a certain amount from a reputable bank for a term of one year at 8% quoted rate...
A: Calculation of Effective rate of interest EIR = Interest / usable fund x 12/12 = 33200 / 37...
Q: Under IAS 19 Employee Benefits, how is actuarial gain or loss handled? amount falling outside th...
A: IAS 19 deals with the employee benefits. It includes the pension, benefit plans and gratuity etc.
Q: TRUE OR FALSE 1. If beginning inventory of prior year is understated, retained earnings is understat...
A: "Since you have asked multiple questions, we will solve first question for you. If you want any spec...
Q: The shareholders' equity of Garnet Corporation on December 31, 2021 showed the following items: 8% P...
A: * As per Bartleby policy, in case question have multiple subparts then answer first three only. 1. ...
Q: Danner Inc. has projected sales to be $100,000 in June, $90,000 in July, and $70,000 in August. Dann...
A: Answer) Calculation of Total cash collections in August Amount Collections in August: ...
Q: Old Camp Company manufactures awnings for its own line of tents. The company is currently operating ...
A: The question is based on the concept of Cost Accounting.
Q: All of the following will affect the retained earnings account, except Adjustment due to overstate...
A: Retained Earnings: Retained earnings are the amount of profit that a firm has left over after paying...
Q: The change in the credit policy would result to increase (decrease) in incremental profit of (Use 36...
A: Profits without Incremental Sales: Sales : P30,00,000 (-) Cost of products (P30,00,000 X 4...
Q: Which of the following is correct with regards to cash discounts offering? Bad debts expense wil...
A: Solution: Cash discounts are offered by business for collection of receivables in timely manner and ...
Q: PARENT Corporation acquired 80% of the outstanding shares of SUBSIDIARY Company on June 1, 2022 for ...
A: Introduction' Non controlling interest means where stakeholder has less than 50 % equity and has no ...
Q: The following selected account data is taken from the records of Reese Industries for 2019. Assume t...
A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for y...
Q: FAUSTINO Inc. manufactures two products, MICHAEL and GABRIEL. Contribution margin per unit is determ...
A: Contribution margin per hours = Contribution margin per unit / No. of hours required per unit
Q: The Felton and Burchell Partnership has partner capital account balances as follows: Felton, Capit...
A: Admission of New Partner While making the admission of a new partner it can received in the form of ...
Q: Which of the following choices best describes reasonable conclusions that you might make about the t...
A: Current ratio = Current assets / Current liabilities Current ratio of A = 40,000/10,000 = 4 Current ...
Q: P Company issues Php500,000 shares of its own Php10 par common stock for the net assets of S Company...
A: In case one company overtake the assets and liabilities of another company , then accounting for am...
Q: How should negative goodwill be shown on the consolidated financial statements of the acquirer? Grou...
A: Introduction:- Negative goodwill arises, where one company (Acquirer company) purchases or acquires ...
Q: How much is the non- controlling interest in net assets on December 31, 2016?
A: Galaxy corporation acquired 80% of the outstanding shares of united company on June 1, 2016 for P3,5...
Q: When determining the liability for compensated absences, the amount should be based on 1. an average...
A: A compensated balance is an employee time off pay that means an employee get compensated for the tim...
Q: The non-controlling interest in net assets of a partially owned subsidiary is: O Decreased by share ...
A: The answer for the multiple choice question and relevant explanation are presented hereunder : What ...
Q: True or false The change in depreciation method is a change in accounting policy.
A: Introduction:- Accounting policies are the specific principles, rules and regulations. Which are use...
Q: 2. Assuming that the conditions for treatment as a sale are met, prepare Samson's journal entry to r...
A: Journal entries refer to the recording of all the monetary events occurring in a particular organiza...
Q: Catalina Corporation begins the year with a $195 balance in Retained Earnings and a $320 balance in ...
A: Stockholder's equity: It implies to the net assets (assets - liabilities) that have shareholder's cl...
Q: NightWoundsTime Brewing Co. distributes its products in an aluminum keg. Customers are charged a dep...
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized i...
Q: A large retailer was sued nearly 5,000 times in a recent year—about once every 2 hours every day of ...
A: A contingent liability is an obligation that may arise as a result of the occurrence of a future eve...
Q: Pledged Assets : Plant, property, and equipment (PPE) Merchandise inventory Free assets Total assets...
A: Estimated recovery value is also written as ERV. It is the amount which is to be recovered by realis...
Q: Which of the following choices best describes reasonable conclusions that you might make about the t...
A: Answer) Calculation of Current Ratio of Company A and Company B Company A Company B ...
Q: Exercise 8-50 (Algo) Job Costing and Process Costing (LO 8-7) Coastal Cycles makes three models of e...
A: The correct answer for the above mentioned question is given in the following steps for your referen...
Q: Bulldogs Inc. had credit sales last year amounted to P18,600,000. The firm also had an average accou...
A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...
Q: What should be reported as total shareholders’ equity on December 31, 2020?
A: Total Shareholders' equity computation includes: a) Outstanding shares b) additional paid up capita...
Q: Assume that the business combination is a pooling of interests. Prepare all journal entries on Pop's...
A: Pooling of interest is an approach that is used for the purpose of reporting the financial transacti...
Q: Gosens Company began operations on December 1, 2020. Presented below is selected information related...
A: Solution.. Service Revenue = $135,000 Rent expenses = $22,000 Utilities expenses = $23,000 Main...
Q: Page 4 of 4 12. Mr. Bean receives a monthly basic salary of P38,000. He also receives P2,000 monthly...
A: Total Compensation = 38000 +2000 +2000 +500 = php 42,500
Q: what is the annual cost of financing? a. 12% b. 17.5% c. 10% d. 14%
A: Solution:- Given, A Company enters into an agreement with a firm that will factor the company's acco...
Q: Questions 4-9 refer to the following balance sheet of a hypothetical private bank called Bank A. You...
A: In the above question, bank A has sold all of its loan worth 100 to bank B at a loss of 20 for which...
Q: exclusive of the cost of carrying receivables of 15% and bad debts expenses. The change in the credi...
A: In this case the incremental profit will have to be calculated. The incremental profit is calculated...
Q: Bulldogs inc. will least likely experience which of the following if the firm shifts its credit term...
A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...
Q: Whirly Corporation's contribution format income statement for the most recent month is shown below S...
A: Solution 1: Contribution Margin income Statement (7650 units) Particulars Total Per unit Sale...
Q: The corporate charter of Carla Vista Corporation allows the issuance of a maximum of 30,800,000 shar...
A: Introduction:- The Following Basic Information as follows under:- Carla Vista Corporation allows t...
Q: Bulldogs Inc. uses Additional Funds Needed as a plug item. If the company had forecast its additiona...
A: Lets understand the basics. Retention ratio is a ratio which shows how much percentage income is lef...
Q: Blonde, Inc., is considering dropping a certain product line if it does not have a margin of safety ...
A: Lets understand the meaning of margin of safety. Margin of safety is a all sales over a break even p...
Q: PHP55,000, and expected to earn a gross profit per unit of PHP10,000. At the end of the month, after...
A: Sales Price Variance = (AP − SP)× Units Sold Actual units sold = 1000 + 100 =1100 units Expected...
Q: a long dispute, AA, BB, and CC decided to liquidate their partnership. Their capital balances as of ...
A: The last preferred options in case of partnership phase liquidation which is considered to be most p...
Q: The sales and cost data for two companies in the transportation industry are as follows: X Com...
A: The margin of safety is defined as the difference between the expected profit and the break-even poi...
Q: Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousa...
A: Protective right is the right which protect the interest of party who holds that right but does not ...
Smith Inc. has sales of P3,000,000. Its credit period and average collection period are both 30 days and 1% of its sales end up as
A. 171k
B. 177,750
C. 161,250
D. 106k
Step by step
Solved in 2 steps
- Bulldogs Inc. has sales of P3,000,000. Its credit period and average collection period are both 30 days and 1% of its sales end up as bad debts. The general manager intends to extend the credit period to 45 days which will increase sales by P300,000. However, bad debts losses on the incremental sales would be 3%. Costs of products and related expenses amount to 40% exclusive of the cost of carrying receivables of 15% and bad debts expenses. The change in the credit policy would result to increase (decrease) in incremental profit of (Use 360 days a year) P161,250 P171,000 P177,750 P106,000SMS Co. has sales of P3 million. Its credit period and average collection period are both 30 days and 1% of its sales end up as bad debts. The general manager intends to extend the credit period of 45 days which will increase sales by P300,000. However, bad debts losses on the incremental sales would be 3%. Costs of products and related expenses amount to 40% exclusive of the cost of carrying receivables of 15% and bad debts expenses. Assuming 360 days a year, the change in policy would result to incremental investments in receivables of P24,704 P65,000 P162,500 P701,573Pedro Corp. currently has sales of P2,000,000, and its days sales outstanding is 2 week. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, bad debts losses, which were 1% on the old sales, would amount to 2% only on incremental sales. Variable cost is 70% of sales. Pedro Corp. has a 10% receivable financing cost. Use 360 days per year. a. What is the incremental increase in the balance of AR? b. What is the Change in carrying cost? Indicate if an increase or decrease c. What would the annual incremental pre-tax profit be if Pedro Corp. extended its credit period?
- A manufacturer currently prices its product at 10 TL per unit. Last year, the manufacturer sold 60.000 units. The variable cost per unit is 6 TL. Total fixed costs are 120.000 TL. The manufacturer intends to increase sales by 5%. Current accounts receivable collection period is 30 days. If the manufacturer wants to relax its credit standards, the expectation is that bad debt expenses will increase from 1% of sales to 2% of sales. The opportunity cost of investing in accounts receivables is 15%. In order to benefit from relaxing its credit standards, what would be the expected maximum accounts receivable collection period? (Assume that existing customers are not expected to alter their payment habits. 1 year = 365 days) a) 82,38 days b) 63,33 days c) 105,82 days d) 63,73 dayse) otherPedro Corp. currently has sales of P2,000,000, and its days sales outstanding is 2 week. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, bad debts losses, which were 1% on the old sales, would amount to 2% only on incremental sales. Variable cost is 70% of sales. Pedro Corp. has a 10% receivable financing cost. Use 360 days per year, What is the incremental increase in the balance of AR? What is the Change in carrying cost? Indicate if an increase or decrease? What would the annual incremental pre-tax profit be if Pedro Corp. extended its credit period?SHE CO. currently has annual sales of P2,000,000. Its average collection period is 40 days, and bad debts are 5 percent of sales. The credit and collection manager is considering instituting a stricter collection policy, whereby bad debts would be reduced to 2 percent of total sales, and the average collection period would fall to 30 days. However, sales would also fall by an estimated P250,000 annually. Variable costs are 60 percent of sales and the cost of carrying receivables is 12 percent. Assume a tax rate of 40 percent and 360 days per year. What would be the incremental investment in receivables if the change were made?
- Edgar Corp. currently has sales P2,000,000, and its days sales outstanding is 2 weeks. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, Bad Debts losses, which were 1% on the old sales, would amount to 2% only on incremental sales. Variable Cost is 70% of sales. Pedro Corp. has a 10% receivable financing cost. Use 360 days per year. Explain each item. A. What is the Incremental Increase in the balance of AR? (Format: 11,111.11) B. What is the Change in carrying cost? Indicate if it is an Increase or Decrease. (Format: 1,111.11 I or 11,111.11 D) C. What would the Annual Incremental Pre-tax Profit be if Edgar Corp. extended its credit period? (Format: 111,111.11)Maurice Corp. currently has sales of P2,000,000, and its days sales outstanding is 2 weeks. The financial manager estimates that offering longer credit terms would increase the days sales outstanding to 3 weeks and increase the sales by 50%. However, Bad Debts losses, which were 1% on the old sakes, would amount to 2% only on incremental sales. Variable Cost is 70% of sales. Maurice Corp. has a 10% receivable financing cost. Use 360 days per year. A. What is the Incremental Increase in the balance of AR? (Format: 11,111.11) B. What is the Change in carrying cost? Indicate if it is an Increase or Decrease. (Format: 1,111.11 I or 11,111.11 D) C. What would the Annual Incremental Pre-tax Profit be if Maurice Corp. extended its credit period? (Format: 111,111.11)Regency Rug Repair Company is trying to decide whether it should relax its credit standards. The firm repairs 72,000 rugs per year at an average price of $32 each. Bad-debt expenses are 1% of sales, the average collection period is 40 days, and the variable cost per unit is $28. Regency expects that if it does relax its credit standards, the average collection period will increase to 48 days and that bad debts will increase to 1.5% of sales. Sales will increase by 4,000 repairs per year. If the firm has a required rate of return on equal-risk investments of 14%, what recommendation would you give the firm? Use your analysis to justify your answer. (Note: Use a 365-day year.)
- Theon Company has $4,000,000 of sales and $200,000 of accounts receivable for the year. The company estimates 2% of its sales will become uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record uncollectible accounts for the period will require a debit to bad debt expense for: Group of answer choices $79,100 $80,000 $3,100 $80,900ABC Corp. has net credit sales of P1,440,000 yearly with credit terms of n/30, which is also the average collection period. BECK does not offer discounts for early payment; thus, customers take the full 30 days to pay. (Use 360 days/year) 1.What is the average receivable balance? 2.What is the accounts receivable turnover?ABC Office Furniture sells its primary product, an office chair, at R150 per unit. Total credit sales for the previous financial year were 4 000 units. The variable cost to manufacture one chair is R60 and the total fixed costs for the year are R80 000. The entity’s credit terms are 2/10 net 45 and it is considering tightening its credit standards to 3/7 net 30. This is expected to result in a 5% decrease in sales, but bad debt is expected to decrease from 2% of credit sales to 1%. The average collection period is expected to decrease from the current 45 days to 30 days. In the past, 20% of debtors accepted the discount. This percentage is not expected to change. The entity’s cost of capital is 14%. Assume 365 days per year. To calculate the effect of the tightening of credit standards, the entity needs to calculate the following: ■ the profit loss or gain from a decrease or an increase in sales ■ the cost of the marginal investment in accounts receivable ■ the cost of marginal bad…