Accounting

Financial analysis is an essential tool used in project management. a. Briefly explain the techniques of NPV, payback period and ROI. For each of them, tell how it can be used in project selection. (6) b. The following is a weighted scoring model to evaluate three procurement proposals. Calculated the weighted scores for each proposal and determine which proposal should be selected based on the weighted scores. (8) Proposal 1 Proposal 2 Proposal 3 Criteria Weight Score Score Score Weighted Score Weighted Score Weighted Score 15% 80 90 60 Management approach 15% 90 50 90 Technical approach 20% 70 95 90 Past performance Price 20% 90 80 80 30% 80 95 65 Interview results and samples Total 100%

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Burlington Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.

# of unit cost or items sale price January 1 Openingbalance 40 $20 January 5 Purchase 20 $22 January 7 Purchaseof January 5items returned -5 January 10 Sale 50 $40 January 12 Purchase 25 $24 January 17 Sale 20 $50 January 24 Purchase 35 $25 Question 29 options: What is the gross profit percentage on …

Burlington Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account. Read More »

Flamboro Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.

# of unit cost or items sale price August 1 Openingbalance 60 $18 August 5 Purchase 40 $20 August 7 Purchaseof August 5items returned -5 August 10 Sale 75 $40 August 12 Purchase 25 $24 August 17 Sale 20 $50 August 24 Purchase 35 $25 Use an inventory cost chart and an accounting chart to …

Flamboro Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account. Read More »

Wilson Corp. is a wholesaler of imported products. The company had the following opening balances at January 1, 2020: Accounts receivable $212,100 Allowance for doubtful accounts S-25,452 Net realizable value $186,648 During 2020, the company had the following summary transactions: a Sales on account, $2,303,000, cost of goods sold, 51,036,000 b. Products returned by customers, $46,000; cost of inventory returned, $21.000 C Cash collections on accounts receivable. $2.119,000 d. Write-offs of accounts receivable determined to be uncollectable, $31.815 . A customer that was previously written off sent in a cheque for $2.900 You estimate that $38.000 of your accounts receivable will be uncollected in the upcoming year. Record all of the above transactions and then answer the questions that follow,

EXPERT ANSWER Journal Entries Events Particulars Debit Credit a) Accounts Receivables $ 23,03,000.00 To Sales $ 23,03,000.00 Cost of Goods sold $ 10,36,000.00 To Inventory $ 10,36,000.00 b) Sales Returns and Allowances $ 46,000.00 To Accounts Receivables $ 46,000.00 Inventory $ 21,000.00 To Cost of Goods Sold $ 21,000.00 c) Cash $ 21,19,000.00 To Accounts …

Wilson Corp. is a wholesaler of imported products. The company had the following opening balances at January 1, 2020: Accounts receivable $212,100 Allowance for doubtful accounts S-25,452 Net realizable value $186,648 During 2020, the company had the following summary transactions: a Sales on account, $2,303,000, cost of goods sold, 51,036,000 b. Products returned by customers, $46,000; cost of inventory returned, $21.000 C Cash collections on accounts receivable. $2.119,000 d. Write-offs of accounts receivable determined to be uncollectable, $31.815 . A customer that was previously written off sent in a cheque for $2.900 You estimate that $38.000 of your accounts receivable will be uncollected in the upcoming year. Record all of the above transactions and then answer the questions that follow, Read More »

Burlington Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.

# of unit cost or items sale price January 1 Openingbalance 40 $20 January 5 Purchase 20 $22 January 7 Purchaseof January 5items returned -5 January 10 Sale 50 $40 January 12 Purchase 25 $24 January 17 Sale 20 $50 January 24 Purchase 35 $25 What amount of cost of goods sold will be recorded …

Burlington Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account. Read More »

The following is common sizes balance sheet and income statement for a company specialized in fashion retailing, the company owns several brand names in clothing and fashion.

EXPERT ANSWER Ratio Analysis:A helpful tool that determines the financial health of the organization by meaningful relationship between components of financial statements of the company is ratio analysis. There are liquidity ratios, solvency ratios, leverage ratios and efficiency ratios, which helps in determining the financial stability of the company. PROFIT MARGIN:A measure of profitability under …

The following is common sizes balance sheet and income statement for a company specialized in fashion retailing, the company owns several brand names in clothing and fashion. Read More »

The following is common sizes balance sheet and income statement for a company specialized in fashion retailing, the company owns several brand names in clothing and fashion. Common Size Balance sheet Year 4 Year 5 Year 6 Year 7 Assets Cash 4.1% 2.9% 17.6% 3.8% Marketable securities 0.0% 0.0% 0.0% 5.0% Accounts receivable 13.5% 0.8% 15.2% 0.8% 9.4% 10.3% 10.2% 14.4% Inventories Prepayments 1.4% 1.7% 1.3% 2.9% Total current assets 28.4% 30.1% 29.9% 26.9% Fixed assets 68.4% 66.0% 62.4% 61.9% Other assets (including intangibles) 3.2% 3.9% 7.7% 9.2% Total Assets 100% 100% 100% 100% Liabilities and Shareholders’ equity Accounts payable 3.2% 3.2% 3.0% 3.8% Short term borrowing 0.0% Other current liabilities 7.4% Total current liabilities 0.2% 0.3% 0.0% 5.6% 5.9% 4.6% 9.0% 55.4% 4.3% 9.4% 7.6% 11.1% Long term debt 53.7% 50.7% 57.4% Other noncurrent liabilities 4.3% 7.0% 7.0% Minority interest 0.0% 0.0% 0.5% 0.8% Total liabilities 68.8% 67.4% 65.8% 76.4%. Common stock 2.2% 1.9% 2.2% Additional paid in capital 2.4% 1.7% 1.6% 1.5% 1.8% 30.7% 32.1% 34.2% 43.3% Retained earnings Treasury stock 3.5% 3.3% 3.4% 23.6% Total equity 31.2% 32.6% 34.2% 23.6% Total liabilities and Shareholders’ equity 100% 100% 100% 100% Income Statement Year 5 Year 6 Year 7 Sales 100% 100% 100% Other revenues 0.2% 0.3% 0.5% Cost of goods sold 67.1% 69.5% 66.4% Selling and administrative expenses 18.0% 18.7% 21.4% Interest expenses 4.9% 4.9% 5.6% 4.0% 2.8% 2.8% Income tax expenses Minority interest 0.0% 0.3% 0.5% Net income 6.1% 4.0% 3.8% The following are financial ratios for the company. You are required to answer the following questions. Year 5 Year 6 Year 7 2.87% 2.60% 4.13% ROA Profit Margin 3.2% 2.9% 3.1% Assets Turnover 0.90 0.88 0.99 Accounts receivable Turnover 6.2 11.5 118.4 Inventory Turnover 6.1 6.0 5.8 Fixed Assets Turnover 1.3 1.4 1.5 collection period 58.6 31.7 3.1 59.6 inventory period %change in sales 60.9 62.5 7.66% 9.68% 1. Explain the decrease in ROA between year 5 and year 6? And the increase between year 5 and 6? 2. Why did profit margin increase in year 7? 3. What is the indication of the continuous increase in the fixed assets turnover rate? 4. Comment on the accounts receivable turnover rate from year 5 to year 7.

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