Mitchem Lethbridge Ltd. is an individual franchise of the parent company Mitchem Office Corporation, which holds a contest every third year to award the franchise with the greatest improvement in net income. This year the Lethbridge franchise has won the contest, however the Halifax franchise, who had a net income increase of 60%, contends that Lethbridge’s financial records have been manipulated to reflect higher net income numbers. The Mitchem head office has asked us to look at the financial records and interview the Lethbridge management to determine if an audit is required because of suspect manipulations to the statements. We also have been required to suggest some improvements to the contest rules to the Mithcem head office. The Lethbridge franchise is currently solely owned by Lisa McGovern and had been going through a tough year in 2010. At the end of the period they made many adjustments that had negative effects on the net income in the 2010 year and positive effects towards the net income of the 2011 year. These issues and the effects they had on net income will determine if there is a need for an audit. They will also help provide insight to determine any improvements that can be applied to the rules of the contest to ensure the future winners are indeed complying with the rules. Improvements would also help curb franchises towards the purpose of the contest, which is to be continually improving net income each year. After determine Mitchem Lethbridge Ltd. Financial statement, we comment on some issues them may address, and…
Sales | 2,269,548 | 1,835,922 | Total Asset | 1,425,308 | 1,121,605 | Total Shareholders Equit | 1,044,226 | 810,873 | Average Total asset | 1986110.5 | | Average total shareholders equity | 1449662.5 | | Interest expenses | -2,945 | -269 | Income before interest and tax | 349,705 | 289,061 | | | | Times interest earned | 117.74 | 1073.57 | ROI | 16.87% | 15.95% |…
Office Supplies | $7,800.00 | | | Utilities | $10,806.40 | | | Advertising Expenses | $116,000.00 | | | Bad Debts | $122,138.64 | | | Depreciation Expense | $94,925.75 | | | Misc.…
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $84,000 cash. On October 31, the company’s records show the following items and amounts.…
CASE 1.3 Just for FEET, Inc. 1. (1) Common-sized Balance Sheet 01/01/1999 01/01/1998 01/01/1997 Current assets: Cash and cash equivalents 2% 18% 37% Marketable securities available for sale - - 9% Accounts receivable 3% 4% 2% Inventory 58% 46% 35% Other current assets 3% 1% 1% Total current assets 65% 69% 84% Property and equipment, net 23% 21% 15% Goodwill, net 10% 8% - Other 1% 1% 2% Total assets 100% 100% 100% Current liabilities: Short-term borrowings - Accounts payable 28% 28% 25% Accrued expenses 7% 5% 3% Income taxes payable 0% 1% 0% Current maturities of long-term debt 2% 2% 1% Total current liabilities 36% 86% 93% Long-term debt and obligations 64% 16% 7% Total liabilities 100% 100% 100% Shareholders' equity Common stock 0% 0% 0% Paid-in capital 77% 82% 87% Retained earnings 23% 18% 13% Total shareholders' equity 100% 100% 100% Total liabilities and shareholders' equity (2) Common-sized Statements of Earnings 1999 1998 1997 Net sales 100.00% 100.00% 100.00% Cost of sales 58.38% 58.46% 57.54% Gross profit 41.62% 41.54% 42.46% Other revenues 0.17% 0.23% 0.23% Operating expenses Store operating 30.01% 29.18% 27.04% Store opening costs 1.76% 1.41% 4.38% Amortization of intangibles 0.27% 0.25% 0.07% General and administrative 3.14% 3.77% 3.07% Total operating expenses 35.18% 34.60% 34.57% Operating income 6.61% 7.17% 8.12% Interest expense -1.04% -0.30% -0.32% Interest income 0.02% 0.29% 1.85% Earnings before income taxes and cumulative effect of change in accounting principle 5.59% 7.15% 9.65% Provision for income taxes 2.15% 2.68% 3.43% Earnings before cumulative effect of a change in accounting principle 3.44% 4.47% 6.22% Cumulative effect on prior years of change in accounting principle - - -0.80%…
Project Statement Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | Sales | | 950,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | Direct Cost55% of sales(Sales * 55% = DC) | | 522,500 | 825,000 | 825,000 | 825,000 | 825,000 | 825,000 | 825,000 | 825,000 | Indirect Incremental Costs | | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 |…
Cumberland Metal Industries (CMI) is one of the largest metal manufacturers in the world. The company evolved from selling metal as a finished product to one that used it as a raw material, increasing sales from $250,000 in 1963 to over $18,500,000 in 1979. Currently, CMI relies heavily on SlipSeal, which is used as a high-temperature sealant in automobiles. Although CMI dominates the market for this product, corporate sales figures decreased over the last year. As a result, the management at CMI realized the importance of diversifying its product-line so that the company does not rely as heavily on SlipSeal or the automobile industry.…
1. At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.…
Polluter Corp. (the “Company”), an SEC registrant, operates three manufacturing facilities in the United States. The Company manufactures various household cleaning products at each facility, which are sold to retail customers. The U.S. government granted the Company emission allowances (“EAs”) of varying vintage years (i.e., the years in which the allowance may be used) to be used between 2010 and 2030. Upon receipt of the EAs, the Company recorded the EAs as intangible assets with a cost basis of zero, in accordance with The Federal Energy Regulatory Commission (“FERC”) accounting guidance for EAs. The Company has a fiscal year end of December 31.…
Regina Vacuum Cleaner Co. seemed to be doing excellent as manifested in its healthy 1988 annual Financial Statements. However, Regina Company ended up as a tragic story that served as cautionary epic to investors, creditors, auditors, the public and the government.…
1- What impact would the three new alternatives have on transfer and customer freight costs? Why?…
McKesson Corporation is one of the leading providers of health care products and services. When it comes to analyzing the external environment; the political, economic, social, technological (PEST) analysis shows that the environmental situation is favorable for the company. The environmental factors are giving the company a chance to succeed in its endeavor. In politics there is no direct problem that might affect the company. In terms of economy the company might experience growth and prosperity in this field. In terms of society people have to buy health products thus the company may find this beneficial for them. In terms of technology the industry tends to be improving and because of this the new advancing technology can help the McKesson lessen its production cost and acquire more profits.…
As a Buyer for the Bay, I would ensure that these new brands that I was bringing in to my department would be productive by researching every brand and making sure there on the same trend line that we are trying to follow. Knowing your target market is also a key element when introducing new brands. The selection factors that I would look at when choosing what brands to bring into my store would be dependent on the season, fit, colour or pattern, durability of garment or product, price, versatility/multi-use, designer label/prestige factor and quality of construction. When deciding what brands to get rid of and which ones to keep, this would be solved by knowing which products are successful and which ones are not. Also which brands are going to match the new reconstruction of our company the Bay and which brands fits in with the new theme and which ones are outdated.…
Organizations are constantly being challenged to identify ways to reduce operating cost, increase equipment capacity and utilization. There are many variables in why we see continued increases. One of the major effects is raising fuel cost. Companies are constantly battling this variable. This is not the only issue facing companies today. But it is certainly a concerning one to companies who rely on fuel for their company to thrive. These challenges are aligned with rising material costs as well. The economics of transportation affects the lives of all U.S. citizens and citizens of other nations. The environmental and socially conscious groups are concerned with the impact pollution and carbon is having on the environment (Hardisty, P, Sivapalan, M, & Brooks. P, 2011). The demand for transportation is very critical and a pervasive element in our society, it also impacts every person directly or indirectly (Coyle, J. J, Novack, R. A, Gibson, B. J, & Bardi, E. J. (2011). If an organization is to survive in the today’s environment, it must create a business model that will address the pressures which continue to surface.…
a. In what way is Carson a surplus unit? Carson invests in Treasury securities and therefore is providing funds to the Treasury, the issuer of those securities.…