represents 59% of Dell’s cash and short term investments‚ 48% of stockholder equity and 209% of its 1996 income. Aside from the conservation of capital‚ Dell’s low inventory has other substantial advantages. Because the industry’s short product life cycles can cause component prices to drop by 30% a year as new technology is introduced‚ Dell’s low component inventory reduces obsolescence risk and lowers inventory cost. These advantages may be partially quantified using the DSI data in Table A: Dell’s
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number. 1. _____ The account‚ Supplies‚ will appear in the following debit columns of the worksheet. a. Trial balance b. Adjusted trial balance c. Balance sheet d. All of these answer choices are correct 2. _____ If Income Summary has a credit balance after revenues and expenses have been closed into it‚ the closing entry for Income Summary will include a a. debit to the owner’s capital account. b. debit to the owner’s drawings account. c. credit to the owner’s capital account. d. credit to the
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share $1.21 $0.78 $0.46 Common Size Balance Sheets Column7 Year 1988 1988 1987 1987 1986 1986 Current Assets Cash $885 0.75% $514.00 0.79% $63 0.15% Receivables $51‚076 43.23% $27‚801.00 42.61% $14‚402 33.34% Inventories $39‚135 33.13% $19‚577.00 30.01% $9‚762 22.60% Other Assets $3‚015 2.55% $1‚449.00 2.22% $708 1.64% Total Current Assets $94‚111 79.66% $49
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Substantive Audit Testing: Revenue Cycle 1. Substantive Audit Testing: Revenue Cycle 2. MULTIPLE CHOICE: 3. 1. Which of the following might be detected by an auditor’s review of the client’s sales cut-off? 4. a. Excessive goods returned for credit. 5. b. Unrecorded sales discounts. c. Lapping of year end accounts receivable. d. Inflated sales for the year. 6. ANSWER: D 7. 2. Which of the following forms of evidence represents the most competent evidence that a receivable actually exists? 8. a. A positive
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constructed a ratio analysis (Appendix I; Exhibit 1). Even though the firm has realized increasing sales and decreased its operating and cash cycle‚ other factors were found to have contributed to the shortage of funds. From the analysis‚ we were able to conclude that the main reasons for the firm’s insufficient funds were due to its slower collection of accounts receivable‚ higher costs of goods sold‚ heavy reliance on debt financing and most importantly a growth rate that is not sustainable.
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Original Work please INTEGRATED CASE APPLICATION –PINNACLE MANUFACTURING: PART II 9-37 (Objectives 9-7‚ 9-8) In Part I of the case‚ you performed preliminary analytical procedures for Pinnacle (pp. 245–247). The purpose of Part II is to identify factors influencing risks and the relationship of risks to audit evidence. During the planning phase of the audit‚ you met with Pinnacle’s management team and performed other planning activities. You encounter the following situations that you believe
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Chapter 14 Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions ← Review Questions 14-1 a. The bill of lading is a document prepared at the time of shipment of goods to a customer indicating the description of the merchandise‚ the quantity shipped‚ and other relevant data. Formally‚ it is a written contract of the shipment and receipt of goods between the seller and carrier. It is also used as a signal to bill the client. The original is
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INTRODUCTION Dell Computers was started by Michael Dell in 1984. Dell’s primary differentiator was its business model. It sold primarily on the B2C market and custom built personal computers on demand. Therefore‚ it had very low inventory by comparison to its competitors. As a result of this‚ Dell was able to operate quite efficiently and profitably in its niche market. By the late 1980’s – early 1990’s‚ Dell noticed that its market share was only 1% of total and that industry amalgamations
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the firm’s operating cycle and its cash conversion cycle? 4. What are the benefits‚ costs‚ and risks of an aggressive funding strategy and a conservative funding strategy? Under which strategy is the borrowing often in excess of the actual need? 5. Why is it important for a firm to minimize the length of its cash conversion cycle? 6. Malaysian Products is concerned about managing cash efficiently. On the average‚ inventories have an age of 90 days‚ and accounts receivable are collected into 60
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Jones Electrical Distribution Case Case II Jones Electrical Distribution is a small company involved in wholesales of electrical devices and appliances. Even though Jones Electrical has been able to turn a profit over the past few years‚ they have noticed a shortage of cash when attempting to take advantage of trade discounts. Their current bank is unable to extend financing over $250‚000‚ and Jones believes they will need considerably more to finance their operations. Therefore‚ Nelson Jones
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