prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a. As of December 31‚ 2011 (the end of the prior quarter)‚ the company’s general ledger showed the following account balances: DEBIT CREDIT $ $ Cash 48‚000 Accounts receivable 224‚000 Finished goods Inventory (1000 units) 60‚000 Raw Materials inventory (500 units) 10‚000 Buildings and equipment (net) 370‚000 Accounts payable 93‚000 Capital stock 510
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difference; taxable income given LO1 Alvis Corporation reports pretax accounting income of $400‚000‚ but due to a single temporary difference‚ taxable income is only $250‚000. At the beginning of the year‚ no temporary differences existed. Required: 1. Assuming a tax rate of 35%‚ what will be Alvis’s net income? 2. What will Alvis report in the balance sheet pertaining to income taxes? Solution: Requirement 1 Since taxable income is less than pretax accounting income‚ a future taxable
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Chapter 2 Introduction to Financial Statement Analysis 2-1. What are the four main financial statements? What checks are there on the accuracy of these statements? The four financial statements are: the balance sheet‚ the income statement‚ the statement of cash flows‚ and the statement of changes in shareholders’ equity. Financial are required to be audited by a neutral third party‚ who checks and ensures that the financial statements are prepared according to GAAP or accounting standards
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Balance Sheet Analysis Applebee’s International 2004 In analyzing the common-size balance sheet for Applebee’s‚ it is noted that the total current assets has jumped from 11% to 14% of the total assets. The total assets for Applebee’s has jumped 6% from 2000 to 2001 driven by increased in the total current assets of 28%. Of those 28% increase‚ they consisted of 88% increase in the Cash & Equivalents (increased of $10.6 millions) caused by the decreased in the Capital Stock repurchasing in 2001
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Return on equity • As they are interested in the long term health and thus ability to repay that the firm has. 2) Explain how the Du Pont system of analysis breaks down return on assets. Also explain how it breaks down return on stockholder’s equity. Profit margin is Net Income / Sales Asset Turnover is Sales / Total Assets Return on Assets is Profit Margin * Asset turnover Return on equity is return on assets /
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versus Expensing Decision. a. The effect in the first year would be an equal decrease in both the numerator (adjusted net income) and the denominator (average total assets) of ROA. Because net income is substantially smaller than average total assets‚ the percentage decrease in the numerator would be greater‚ and ROA would be understated. However‚ in the next two years‚ net income would be overstated because it is not burdened by a depreciation charge‚ average total assets would remain understated
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Analysis of Argentina Balance of Payments The economic situation of Argentina was interesting between 1998 and 2007. However‚ it can be assumed that the worst year of the Argentinean economy was 2002. Before 1998‚ some factors such as a huge debt reaching 55% of the GDP‚ a currency pegged to the US $‚ the “Tequila” crisis in 1995‚ the devaluation of Mexican and Brazilian currencies‚ were responsible of the crisis Firstly we compared trade and GDP‚ to obtain the trade openness ratio. It increased
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Companies Consolidated Financial Statements – 29 February 2008 Together with Auditors’ Reports GUARANTY TRUST BANK PLC Orange Rules Guaranty Trust Bank Plc and Subsidiary Companies Consolidated Financial Statements – 29 February 2008 Together with Auditors’ Reports Contents Page Consolidated financial statements Consolidated balance sheet 1 Consolidated income statement 2 Consolidated statement of recognised income and expense 3 Consolidated statement of cash flows 4 Notes to the consolidated
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Vertical integration is a business growth strategy for economics of scale. It is typified by one firm engaged in different parts of production example; growing raw materials‚ manufacturing‚ transporting‚ marketing‚ and/or retailing to expand business in existing market for the firm. It can function in two directions both forward integration and backward integration. In Forward integration involves company to develop strategy to control the firm product distribution either through distribution centers
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Financial Statement Analysis April Cruz‚ Litesha Forbes‚ Phillip Gibson‚ Jessica Hewlett‚ Lily James‚ Velda Justin‚ and Nzingha Reel ACC/561 September 27‚ 2010 Mark Tischler Financial Statement Analysis The accounting information of this paper provides a financial statement analysis for three distinct companies: Mercedes Benz‚ a foreign manufacturer of vehicles; Macy’s Inc‚ a retail department store‚ and American Airlines‚ an airline company. The analysis for each company
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