A common size analysis requires the representation of financial statement data in terms of a single financial statement item (or base account or value). What is the most commonly used base item for a common size income statement

Answers

Answer 1

Answer:

In a common size income statement, the most commonly used base item is total sales or total revenue. All other line items are represented as a percentage of this amount. This method allows for easier comparison of financial statements over different periods or from different companies.

In a common size income statement, the most commonly used base item is total sales or total revenue.

This means, every line item on the income statement such as cost of goods sold, gross profit, operating expenses, and net income, among others, are converted into a percentage of total sales.

A common size analysis facilitates the comparison of financial statements over different periods, or among different companies, by expressing each line item as a percentage of the base item.

Take an example, if the total sales of a company in a particular year is $100,000 and the cost of goods sold represents $60,000 then in the common size income statement, the cost of goods sold will be represented as 60% (i.e., $60,000/$100,000 * 100).

This method makes it easier to compare relative proportions of account balances, irrespective of the size of the company or the period.

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Answer 2

Answer:

Final answer:

The most commonly used base item for a common size income statement is sales revenue. This allows for easy comparison of financial performance between different companies or different reporting periods.

Explanation:

The most commonly used base item for a common size income statement is sales revenue. When performing a common size analysis, the values on the income statement are typically converted into percentages of sales revenue. This allows for easy comparison of financial performance between different companies or different reporting periods, regardless of the size of the company or the amount of sales. For instance, the cost of goods sold and operating expenses would be represented as a percentage of sales revenue. This way, you can compare the relative size of cost items to the sales they support, across different firms or times.

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What is the most appropriate decision on a product line when a company decides to lengthen its product line beyond its current range

Answers

Answer:

Line Stretching

Explanation:

A company normally makes an up-market stretch to obtain higher profit margins, achieve market growth, or position itself as a complete producer.

With respect to the WBS numbering system, which of the following statements is true? A. The numbering system is a unique identifier known as the code of accounts, which is used to track the costs of the WBS elements. B. The numbering system is a unique identifier known as the code of accounts, which is used to track time and resource assignments for individual work elements. C. The numbering system is a unique identifier known as the WBS dictionary, which is used to assign quality control codes to the individual work elements. D. The numbering system is a unique identifier known as the WBS dictionary, which is used to track the descriptions of individual work elements.

Answers

Answer:

Explanation:

Tanner-UNF Corporation acquired as a long-term investment $330 million of 5.0% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Tanner-UNF paid $300.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $310.0 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet? 4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2022, for $290.0 million. Prepare the journal entry to record the sale.

Answers

Answer and Explanation:

The Journal entries are shown below:-

1. Investment in bond Dr, $330 million

To Cash $300 million

To Discount on bond investment $30 million

(Being investment in bond is recorded)

2. Cash Dr, $8.25 million ($330 million × 5% × 6 ÷ 12)

Discount on bond investment Dr, $0.75 million

To Interest revenue $9 million ($300 million × 6% × 6 ÷ 12)

(Being recognition of bond interest and discount is recorded)

3. The computation of investment is shown below:-

Investment = $300 million + $0.75 million

= $300.75 million

4. The journal entry is shown below:-

Cash Dr, $290 million

Discount on bond inventment Dr, $29.25 million

Loss on sale of investment Dr, $10.75 million

To inventment in bond $330 million

(Being sale of investment is recorded)

Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $9.00. In year two, the price of the same basket is $8.00. From year one to year two, there is at an annual rate of . In year one, $72.00 will buy baskets, and in year two, $72.00 will buy baskets. This example illustrates that, as the price level falls, the value of money . rises,falls,remains the same

Answers

Answer:

From Year 1 to Year 2 : There is annual deflation 11.11%

As price falls, value of money rises

Explanation:

Given : Commodity Basket Cost = $9 in Year 1 ; Commodity Basket Cost = $8 in Year 2

From Year 1 to Year 2 : There has been fall in price level. Proportionate (%) Fall in price level = Change in Price / Old Price x 100

So, Fall in price level = [ ( 9 - 8 ) / 9] x 100 = 1/9 x 100 = 11.11%

Hence, from year 1 to year 2 : there has been 11% fall in price i.e Deflation

Considering Income = $72 :

Year 1 : It can purchase 72 / 9 = 8 commodity baskets
Year 2 : It can purchase 72 / 8 = 9 commodity baskets

So, it illustrates that : As price falls, the purchasing power of money (value of money) rises.

Which of the following assets purchased in the current year are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations?Rex’s Wrecks purchased $561,000 in new equipment during 2017. Rex wants to use Section 179 to expense the maximum amount of the purchase. How much will Rex get to expense under Section 179 and what will be the adjusted basis of the assets for calculating MACRS depreciation expense?

Answers

Question 1 Completion with Options:

A. used equipment

B. storage warehouse

C. land for future building site

D. new office furniture

E. apartment complex

F. new delivery truck

Answer:

1. The assets purchased in the current year that are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations are:

A. used equipment

D. new office furniture

F. new delivery truck

2. $561,000 is the maximum to be expensed with an adjusted basis of 100% for MACRS

Explanation:

There is a maximum deduction of $1,050,000 under section 179. The section affords eligible taxpayers the opportunity to reduce their tax burden in the first year that they purchase eligible properties.

When other things remain equal, buyers are expected to stock up from the normal product that they expect its market price to decline significantly in the soon future.a) true
b) false

Answers

Answer:b) false

Explanation:

They would not want to stock up on something that the market price will decline significantly on, they would do the opposite

Answer:

False

Explanation:

This is false, they would want to do the opposite, not stock up

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The Acmeville Metropolitan Bus Service currently charges $0.88 for an all-day ticket, and is used by an average of 433 riders a day. The bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $0.99. The marketing department\'s studies indicate this price increase would reduce usage to 169 riders per day. Calculate the price elasticity of demand for bus tickets to determine if the bus company should increase price or decrease price to increase revenues.Price elasticity of demand is? 7.45 I get but on the online hw, it says its wrong? I tried 7.5 too? I used the midpoint formula (q2-q1)/((q2+q1)/2) / (p2-p1)/((p2+p1)/2)

Listed below are costs found in various organizations.For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it is a direct cost or an indirect cost with respect to units of product.1. Direct labor 2. Executive salaries 3. Factory rent 4. Property taxes, factory.5. Boxes used for packaging detergent produced by the company 6. Salespersons' commissions 7. Supervisor's salary, factory 8. Depreciation, executive autos. 9. Wages of workers assembling computers 10. Insurance, finished goods warehouses 11. Lubricants for production equipment.12. Advertising costs 13. Microchips used in producing calculators.

According to the modern view of the Phillips curve, expansionary macroeconomic policy that leads to inflation will reduce unemploymenta. only if people underestimate the inflationary side effects of the policy.b. only if people overestimate the inflationary side effects of the policy.c. if people accurately anticipate the inflationary side effects of the policy.d. only if monetary policy provides the macroeconomic stimulus.