The impact of management decisions and other topics


4-Financial propositions for Larkins Guild answer beneath:
Larkins Company
Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands)

 

Year 2

 

Year 1

4-Current proceeds:
  Cash and tradeable securities
  Accounts receivable, net
  Inventory
  Preremunerated expenditures
Total ordinary proceeds
Nonordinary proceeds:
  Plant & equipment, net


$180
210
130
50
570

1,540

 


$180
180
120
50
530

1,480

Total proceeds

$2,110

 

$2,010

 

Current liabilities:
  Accounts payable
  Accrued liabilities
  Notes payable, close term
Total ordinary liabilities
Nonordinary liabilities:
  Bonds payable
Total liabilities
Stockholders' equity:
  Preferred hoard, $20 par, 10%
  Common hoard, $10 par
  Additional remunerated-in excellent--dishonorable hoard
  Retained hues
Total hoardholders' equity
Total liabilities & hoardholders' equity


$100
60
90
250

480
730

120
180
240
840
1,380
$2,110

 


$130
60
120
310

500
810

120
180
240
660
1,200
$2,010

 

Larkins Company
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)

 

Sales (all on recital)
Cost of movables sold
Gross margin
Selling and authoritative expenditure
Net playing proceeds
Interest expenditure
Net proceeds antecedently taxes
Income taxes (30%)
Net proceeds

$2,760
1,930
830
330
500
50
450
135
$315


Dividends during Year 2 aggregateed $135 thousand, of which $12 thousand were preferred dividends. The trade appraisement of a portion-out of dishonorable hoard on December 31, Year 2 was $150.

4.   Larkins Company's dividend payout affinity for Year 2 was closest to:

A. 40.6%    B. 24.6%     C. 42.9%       D. 14.8%

 

 5.   The Clemson Guild reputed the aftercited results definite year for the composition and sale of one of its fruits unreserved as a Tam.

Sales (6,500 Tams at $130 each)

$845,000

Variable consume of sales

390,000

Variable classification consumes

65,000

Fixed advertising expenditure

275,000

Salary of fruit sequence manager

25,000

Fixed manufacturing aloft

145,000

Net playing mislaying

$(55,000)


Clemson Guild is arduous to detail whether to disestablish the composition and sale of Tams. The playing results reputed aloft for definite year are expected to live in the foreseeable forthcoming if the fruit isn't dropped. The unroving manufacturing aloft represents the consumes of fruition facilities and equipment that the Tam fruit portion-outs delay other fruits executed by Clemson. If the Tam fruit were dropped, there would be no qualify in the unroving manufacturing consumes of the guild.
Assume that discontinuing the composition and sale of Tams succeed bear no result on the sale of other fruit sequences. If the guild disestablishs the Tam fruit sequence, the qualify in annual playing proceeds (or mislaying) should be a

A. $65,000 closeen.  B. $70,000 acception. C. $55,000 closeen. D$90,000decrease.

 

6.   Fonics Corporation is because the aftercited three competing cannonade proposals:

 

Aye

Bee

Cee

Initial cannonade required

$62,000

$74,000

$95,000

Net confer-upon scold

$10,000

$8,000

$12,000

Internal blame of reappear

15%

17%

18%


Using the purpose profitability condemnation, how would the aloft cannonades be ranked (leading to smallest)?

A. Cee, Bee, Aye    B. Aye, Bee, Cee    C. Aye, Cee, Bee     D. Bee, Cee, Aye

7.   Which of the aftercited would be classified as a financing soul on the proposition of coin flows? 

 

 A. Dividends despicable on cannonades in another guild's dishonorable hoard

B. Dividends remunerated to portion-outholders of the guild on the guild's dishonorable hoard

C. Interest despicable on cannonades in another guild's bonds

D. Interest remunerated on bonds issued by the reporting guild

 

8.   (Ignore proceeds taxes in this collection.) The aftercited grounds pertain to an cannonade:

 

Cost of the cannonade $18,955. Life of the purpose 5 years.  Annual consume savings $5,000

 Estimated salvage scold $1,000.    Discount blame 10%

 The net confer-upon scold of the incomplete cannonade is

   A. $621.      B. $0.     C. $3,355.        D. $(3,430).

 

9.   A purpose profitability condemnation elder than nothing for a purpose indicates that

 A. the abatement blame is close than the inner blame of reappear.

B. the purpose is uninteresting and shouldn't be pursued.

C. the guild should reevaluate its abatement blame.

D. there has been a forethought hallucination.

 

10.   Centerville Company's debt-to-equity affinity is 0.60 Aggregate proceeds are $320,000, ordinary proceeds are $170,000, and working excellent is $80,000. Centerville's long-term liabilities must be

 A. $120,000.     B. $80,000.    C. $90,000.      D. $30,000.

 

 

11.   Kava Inc. compositions industrial factors. One of its fruits, which is used in the composition of industrial air conditioners, is unreserved as K65. Grounds relating this fruit are absorbed beneath:

 Per Unit

 Selling appraisement $180--Direct materials $29--Direct drudge $5---Variable manufacturing aloft $4

 Fixed manufacturing aloft $21----Variable selling expenditure $2—

Fixed selling and authoritative expenditure $17

The aloft per item grounds are based on annual fruition of 4,000 items of the factor. Direct drudge can be considered to be a mutable consume. (Source: CMA, adapted)

The guild has despicable a exceptional, one-time-only direct for 500 items of factor K65. There would be no mutable selling expenditure on this exceptional direct, and the aggregate unroving manufacturing aloft and unroving selling and authoritative expenditures of the guild wouldn't be fictitious by the direct. Assuming that Kava has surplus parts and can glut the direct delayout bitter end on the fruition of any fruit, what is the poverty appraisement per item on the exceptional direct beneath which the guild shouldn't go?

 A. $59     B. $38     C. $180      D. $78

 

12-Financial propositions for Larkins Guild answer beneath:
Larkins Guild Proposition of Financial Position December 31, Year 2 and Year 1 (dollars in thousands)

 

Year 2

 

Year 1

Current proceeds:
  Cash and tradeable securities
  Accounts receivable, net
  Inventory
  Preremunerated expenditures
Total ordinary proceeds
Nonordinary proceeds:
  Plant & equipment, net


$180
210
130
50
570

1,540

 


$180
180
120
50
530

1,480

Total proceeds

$2,110

 

$2,010

 

Current liabilities:
  Accounts payable
  Accrued liabilities
  Notes payable, close term
Total ordinary liabilities
Nonordinary liabilities:
  Bonds payable
Total liabilities
Stockholders' equity:
  Preferred hoard, $20 par, 10%
  Common hoard, $10 par
  Additional remunerated-in excellent--dishonorable hoard
  Retained hues
Total hoardholders' equity
Total liabilities & hoardholders' equity


$100
60
90
250

480
730

120
180
240
840
1,380
$2,110

 


$130
60
120
310

500
810

120
180
240
660
1,200
$2,010

 

Larkins Company
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)

 

Sales (all on recital)
Cost of movables sold
Gross margin
Selling and authoritative expenditure
Net playing proceeds
Interest expenditure
Net proceeds antecedently taxes
Income taxes (30%)
Net proceeds

$2,760
1,930
830
330
500
50
450
135
$315


Dividends during Year 2 aggregateed $135 thousand, of which $12 thousand were preferred dividends. The trade appraisement of a portion-out of dishonorable hoard on December 31, Year 2 was $150.
12-
Larkins Company's hues per portion-out of dishonorable hoard for Year 2 was closest to:
A. $25.00.       B. $17.50.    C. $7.21.      D. $16.83.

 

13.   Brittman Corporation makes three fruits that use the ordinary toil-a point image of deed. Grounds relating those fruits answer beneath:

 

IP

NI

YD

Selling appraisement per item

$183.57

$207.74

$348.15

Variable consume per item

$144.42

$155.04

$269.50

Minutes on the toil

2.90

3.40

5.50


Assume that competent toil occasion is suited to suffice require for all but the lowest lucrative fruit. Up to how ample should the guild be succeeding to pay to get further of the harsh material?

A. $15.50 per minute   B. $13.50 per minute    C. $78.65 per item     D. $39.15 per item

14-The most fresh redress equivocation and proceeds proposition of Teramoto Corporation answer beneath:

Comparative Redress Sheet

Ending
Balance

 

Beginning
Balance

Assets:
Cash and coin equivalents
Accounts receivable
Inventory
Plant and equipment
Less accumulated depreciation
Total proceeds


$43
53
73
582
301
$450

 


$35
59
69
490
286
$367

Liabilities and hoardholders' equity
Accounts payable
Wages payable
Taxes payable
Bonds payable
Deferred taxes
Common hoard
Retained hues
Total liabilities and hoardholders' equity


$57
21
15
21
20
55
261
$450

 


$48
18
13
20
21
50
197
$367

 

Income Statement

Sales
Cost of good-natured-natured sold
Gross margin
Selling and authoritative expenditure
Net playing proceeds
Income taxes
Net proceeds

$893
587
306
189
117
35
$82

The net coin granted by (used by) operations for the year was

A. $117.    B. $52.      C. $112.       D. $30.