Actual 1996 Forecast Year Ended Percent of 1995/1/29 1995 Salesb Current Assets: Cash 43 1.2% 66 Short Term Investments 484 13.9% 484 Accounts Receivables‚ net 538 15.5% 820 Inventories 293 8.4% 447 Other 112 3.2% 171 Total Current Assets 1‚470 42.3% 1‚988 Property
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average inventory by $4‚000‚ (b) that improvements in the credit department could reduce receivables by $2‚000‚ and (c) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2‚000. Furthermore‚ she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made‚ by how many days would the cash conversion cycle be lowered? 2. (TCO C) Bumpas Enterprises purchases $4‚562‚500 in goods per year from
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Ex. 6.2 B. Ex. 6.3 B. Ex. 6.4 B. Ex. 6.5 B. Ex. 6.6 B. Ex. 6.7 B. Ex. 6.8 B. Ex. 6.9 B. Ex. 6.10 B. Ex. 6.11 Exercises 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 Topic Computation of gross profit Accounts receivable subsidiary ledger Perpetual inventory system computation of income Periodic inventory system inventory balance during year Periodic inventory system determine cost of goods sold Periodic inventory system working backwards through the COGS
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Biltrite Practice Case Module III: Control Testing – Sales Processing 1. The sampling plan in the design of controls does not provide tests about revenues and accounts receivables. The weakness that I could see is the fact that goods that were delivered to customers were not billed which result in bill of lading not being pre-numbered. Because of this‚ bills of lading do not count as an effective sampling unit. For a successful audit‚ auditors need to evaluate orders randomly and check to see
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office building and a warehouse to stockpile some inventory of its own. - No Receivables/Days of Receivables: Since an online retailer caters to only individual customers‚ and since the latter pays usually by cash or credit card‚ accounts receivable will be at most a negligible amount‚ if not zero. - Unearned Revenues: Unearned Revenues can exist for an online retailer especially when the company opens up pre-order accounts for various products which are not yet released in the market. - Research
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Kota Fibres‚ Ltd. 1. How did Mehta construct his financial forecast? Using the financial forecast‚ prepare to show the “cash cycle” of the firm (i.e.‚ the flow of funds through the working-capital accounts of the firm). 2. Examine the exhibits in the case: a. On the basis of Mehta’s forecast‚ how much debt will Kota need to arrange for the coming year? b. Will Kota be able to repay the line of credit this year? 3. About financial requirements: a. Why
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Classify transactions using the rules of debit and credit. 3. Which accounts have a normal credit balance? a. Assets and expenses b. Liabilities and expenses c. Assets and revenue d. Liabilities and revenue 4. A debit entry may indicate which of the following: a. An increase in an asset account b. A decrease in an asset account c. An increase in a liability account d. An increase in a capital account Objective: Journalize basic transactions. 5. ABC Corporation records
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Required a. Calculate purchases‚ gross margin‚ inventory turn days‚ accounts receivable turn days‚ and accounts payable turn days for the years ended 20x2‚ 20x3‚ 20x4‚ 20x5. Purchases 2002 = 2003 = 2004 = 2005 = Gross margin% 2002 = 2003 = 2004 = 2005 = Inventory Turn-over days 2002 = 2003 = 2004 = 2005 = Accounts Receivable Turn-over Days 2002 = 86.43 2003 = 88.51 2004 = 87.30 2005 = 76.83 Accounts Payable Turn-over Days 2002 = 2003 = 2004 = 2005 = b. Describe
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payment cycles. These test and procedures are with intent to attest operating effectiveness of internal controls of Apollo Shoes on the basis of documentation provided. It is with the understanding that with the performing of test and procedures an opinion can be formed but management of Apollo shoes is responsible for the maintenance and assessment internal controls of over financial reporting. The design of test of controls of the sales and collection cycle follows. Sales and Collection Cycle Tests
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lapping. b) One of the sales clerks has not been preparing charge slips for credit sales to family and friends. c) The EDP control clerk has been removing all sales invoices applicable to his account from the data file. d) The credit manager has misappropriated remittances from customers whose accounts have been written-off. 2. Customers having substantial year-end past due balances fail to reply after second request forms have been mailed directly to them. Which of the following is the most
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