Accouting- Chapter 1 Flashcards

Other sets by this creator

Chapter 3: Water and Life

29 terms

Biology CHAPTER 3

20 terms

BSC2085L

43 termsImages

BSC2085

18 terms

Verified questions

accounting

The 2021 balance sheet for Hallbrook Industries, Inc., is shown below.

\begin{array}{lc} \text{HALLBROOK INDUSTRIES, INC.}\\ \text{Balance Sheet}\\ \text{December 31, 2021}\\ \text{(\$ in thousands)}\\ \text{Assets}\\ \text{Cash}&\$ 200\\ \text{Short-term investments} & 150\\ \text{Accounts receivable} & 200\\ \text{Inventory} & 350\\ \text{Property, plant, and equipment (net)} & 1,000\\ \text{Total assets} \$1,900\\ \text{Liabilities and Shareholders’ Equity}\\ \text{Current liabilities}& \$ 400\\ \text{Long-term liabilities} & 350\\ \text{Paid-in capital} & 750\\ \text{Retained earnings} & 400\\ \text{Total liabilities and shareholders’ equity}& \$1,900\\ \end{array}

The company’s 2021 income statement reported the following amounts ( $in thousands):$

\begin{array}{lr} \text{Net sales} & \$4,600\\ \text{Interest expense} &40\\ \text{Income tax expense}& 100\\ \text{Net income} & 160\\ \end{array}

$

Determine the following ratios for 2021:

Current ratio
Acid-test ratio
Debt to equity ratio
Times interest earned ratio

Verified answer

accounting

Refer to Apple's financial statements in Appendix A to answer the following.

Required

Assume that the amounts reported for inventories and cost of sales reflect items purchased in a formready for resale. Compute the net cost of goods purchased for the year ended September 30, 2017.
Compute the current ratio and acid-test ratio as of September 30, 2017, and September 24, 2016.
Does Apple's 2017 current ratio outperform or underperform the (assumed) industry average of 1.5?
Does Apple's 2017 acid-test ratio outperform or underperform the (assumed) industry average of 1.0?

Verified answer

management

A pharmacist has been monitoring sales of a certain over-the-counter pain reliever. Daily sales during the last 15 days were

Day: $\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,$ 1 $\,\,\,\,\,$ 2 $\,\,\,\,\,$ 3 $\,\,\,\,\,$ 4 $\,\,\,\,\,$ 5 $\,\,\,\,\,$ 6 $\,\,\,\,\,$ 7 $\,\,\,\,\,$ 8 $\,\,\,\,\,$ 9

Number sold: $\,\,\,\,$ 36 $\,\,$ 38 $\,\,$ 42 $\,\,$ 44 $\,\,$ 48 $\,\,$ 49 $\,\,$ 50 $\,\,$ 49 $\,\,\,\,$ 52

Day: $\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,$ 10 $\,\,\,\,\,$ 11 $\,\,\,\,\,$ 12 $\,\,\,\,\,$ 13 $\,\,\,\,\,$ 14 $\,\,\,\,\,$ 15

Number sold: $\,\,\,\,$ 48 $\,\,\,\,\,$ 52 $\,\,\,\,\,$ 55 $\,\,\,\,\,$ 54 $\,\,\,\,\,$ 56 $\,\,\,\,\,$ 57

a. Which method would you suggest using to predict future sales—a linear trend equation or trend-adjusted exponential smoothing? Why?

b. If you learn that on some days the store ran out of the specific pain reliever, would that knowledge cause you any concern? Explain.

c. Assume that the data refer to demand rather than sales. Using trend-adjusted smoothing with an initial forecast of 50 for day 8, an initial trend estimate of 2, and $\alpha$ = $\beta$ = .3, develop forecasts for days 9 through 16. What is the MSE for the eight forecasts for which there are actual data