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ACCOUNTINGPayless ShoeSource and Dillard's both offer men's formal footwear. Payless offers lower-to middle-priced footwear, whereas Dillard's offers more specialized, higher-end footwear. The average price for a pair of shoes in Payless may be about $50, whereas the average price in Dillard's may be about$175. The types of shoes offered by Dillard's are not sold by many other stores. Suppose a Payless store and a Dillard's store report the following amounts for men's shoes in the same year (company names are disguised):
$$
\begin{matrix}
\text{ } & \text{Company 1} & \text{Company 2}\\
\text{Net sales} & \text{$\$ 200,000$} & \text{$\$ 200,000$}\\
\text{Cost of goods sold} & \underline{130,000} & \underline{165,000}\\
\text{Gross profit} & \underline{\underline{\$70,000}} & \underline{\underline{\$35,000}}\\
\text{Average inventory} & \underline{\underline{\$35,000}} & \underline{\underline{\$20,000}}\\
\end{matrix}
$$
1. For Company 1 and Company 2, calculate the inventory turnover ratio. 2. For Company 1 and Company 2, calculate the gross profit ratio. 3. After comparing the inventory turnover ratios and gross profit ratios, which company do you think is Payless and which is Dillard's? Explain. ACCOUNTINGBelow are account balances of Ducks Company at the end of September.
$$
\begin{array}{lrlr}
\text{Accounts} & \text{Balances} & \text{Accounts} & \text{Balances}\\ \hline
\text{Cash} & \text{$\$ 25,000$} & \text{Retained Earnings} & \text{$\$ 13,000$}\\
\text{Accounts Receivable} & \text{$14,000$} & \text{Dividends} & \text{$4,000$}\\
\text{Supplies} & \text{$7,000$} & \text{Service Revenue} & \text{$?$}\\
\text{Prepaid Insurance} & \text{$5,000$} & \text{Salaries Expense} & \text{$9,000$}\\
\text{Equipment} & \text{$28,000$} & \text{Insurance Expense} & \text{$8,000$}\\
\text{Accounts Payable} & \text{$7,000$} & \text{Advertising Expense} & \text{$1,100$}\\
\text{Salaries Payable} & \text{$4,000$} & \text{Supplies Expense} & \text{$10,000$}\\
\text{Utilities Payable} & \text{$1,100$} & \text{Entertainment Expense} & \text{$6,000$}\\
\text{Deferred Revenue} & \text{$9,000$} & \text{Utilities Expense} & \text{$1,100$}\\
\text{Common Stock} & \text{$29,000$} & \text{ } & \text{ }\\
\end{array}
$$
Prepare a trial balance by placing amounts in the appropriate debit or credit column and determining the balance of the Service Revenue account.