Pietarsaari Oy, a Finnish company, produces cross-country ski poles that it sells for €32 a pair

Pietarsaari Oy, a Finnish company, produces cross-country ski poles that it sells for €32 a pair. (The Finnish unit of currency, the euro, is denoted by €.) Operating at capacity, the company can produce 50,000 pairs of ski poles a year. Costs associated with this level of production and sales are given below:





Per Pair

Total

Direct materials

€

12



€

600,000

Direct labor



3





150,000

Variable manufacturing overhead



1





50,000

Fixed manufacturing overhead



5





250,000

Variable selling expense



2





100,000

Fixed selling expense



4





200,000



Total cost

€

27



€

1,350,000





Required:

1.

The Finnish army would like to make a one-time-only purchase of 10,000 pairs of ski poles for its mountain troops. The army would pay a fixed fee of €4 per pair, and in addition it would reimburse the Pietarsaari Oy company for its unit manufacturing costs (both fixed and variable). Due to a recession, the company would otherwise produce and sell only 40,000 pairs of ski poles this year. (Total fixed manufacturing overhead cost would be the same whether 40,000 pairs or 50,000 pairs of ski poles were produced.) The company would not incur its usual variable selling expenses with this special order. If the Pietarsaari Oy company accepts the army’s offer, by how much would net operating income increase or decrease from what it would be if only 40,000 pairs of ski poles were produced and sold during the year? (Input the amount as a positive value. Omit the \"€\" sign in your response.)

2.

Assume the same situation as described in (1) above, except that the company is already operating at capacity and could sell 50,000 pairs of ski poles through regular channels. Thus, accepting the army’s offer would require giving up sales of 10,000 pairs at the normal price of €32 a pair. If the army’s offer is accepted, by how much will net operating income increase or decrease from what it would be if the 10,000 pairs were sold through regular channels?(Input the amount as a positive value. Omit the \"€\" sign in your response.)

It have only answers in it

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Portland Company's Ironton Plant produces precast ingots for industrial use

Portland Company's Ironton Plant produces precast ingots for industrial use. Carlos Santiago, who was recently appointed general manager of the Ironton Plant, has just been handed the plant’s contribution format income statement for October. The statement is shown below:





Budgeted

Actual

Sales (5,000 ingots)

$

250,000

$

250,000



Variable expenses:









Variable cost of goods sold*



80,000



96,390

Variable selling expenses



20,000



20,000



Total variable expenses



100,000



116,390



Contribution margin



150,000



133,610



Fixed expenses:









Manufacturing overhead



60,000



60,000

Selling and administrative



75,000



75,000



Total fixed expenses



135,000



135,000



Net operating income (loss)

$

15,000

$

(1,390)





*Contains direct materials, direct labor, and variable manufacturing overhead.



Mr. Santiago was shocked to see the loss for the month, particularly because sales were exactly as budgeted. He stated, \"I sure hope the plant has a standard cost system in operation. If it doesn\'t, I won\'t have the slightest idea of where to start looking for the problem.\"



The plant does use a standard cost system, with the following standard variable cost per ingot:





Standard Quantity or Hours

Standard Price or Rate

Standard Cost

Direct materials

4.0 pounds

$

2.50 per pound

$

10.00

Direct labor

0.6 hours

$

9.00 per hour



5.40

Variable manufacturing overhead

0.3 hours*

$

2.00 per hour



0.60









Total standard variable cost







$

16.00











*Based on machine-hours.



During October the plant produced 5,000 ingots and incurred the following costs:



a.

Purchased 25,000 pounds of materials at a cost of $2.95 per pound. There were no raw materials in inventory at the beginning of the month.

b.

Used 19,800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

c.

Worked 3,600 direct labor-hours at a cost of $8.70 per hour.

d.

Incurred a total variable manufacturing overhead cost of $4,320 for the month. A total of 1,800 machine-hours was recorded.



It is the company’s policy to close all variances to cost of goods sold on a monthly basis.



Required:



1.

Compute the following variances for October:



a.

Direct materials price and quantity variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter \"0\" wherever required. Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Omit the \"$\" sign in your response.)

b.

Direct labor rate and efficiency variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter \"0\" wherever required. Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Omit the \"$\" sign in your response.)

c.

Variable overhead rate and efficiency variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter \"0\" wherever required. Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Omit the \"$\" sign in your response.)

2a.

Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for October. (Input the amount as a positive value. Leave no cells blank - be certain to enter \"0\" wherever required. Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect (i.e., zero variance). Omit the \"$\" sign in your response.)

3.

Pick out the two most significant variances that you computed in (1) above. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

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BA213 PRINCIPLES OF ACCOUNTING III MANAGERIAL ACCOUNTING FINAL ASSIGNMENT

BA213 – Principles of Accounting III (Managerial Accounting)Final AssignmentThis assignment is your BA213 final as scheduled on the course syllabus. The questions cover the major themesand casework covered during the term with a focus on chapters 8, 9, 10, 11, and 12.Due DateCompleted assignment must be turned in no later than the time and date of the final exam is scheduled. Earlysubmissions are allowed to my mailbox in the Business Department AC2685 or via emailharry.dewolf@mhcc.edu (if you do not receive an email receipt confirmation from me I did not received it).NOTE: Late submissions will not be accepted. No points will be earned for late submissions.Point ValueEach question has a maximum point value of 20 points. The entire assignment has a value of 200 points.Partial credit may be given if I am able to determine by examining your calculations where you made your error.If no calculation work is provided I will be unable to provide partial credit.Extra Credit: There are two options for extra credit. You may choose one (1) extra credit question: Question oneis easier and has a value of TEN (10) points or question two which is more challenging and has a value ofTWENTY (25) points. You may submit ONLY one or none at all. Completion of extra credit in NOT mandatory.Points earned are above and beyond the 200 available for questions 1 - 10.Submission Format: You may submit your answers handwritten (clearly and neatly) or you may submit usingMS Excel or Word. Include your name, date, class, section, and term. No plastic covers, no paperclips Answer all questions as complete and professionally as possible. If you use MS Excel to answer any question attach your work to your hardcopy submission.Group EvaluationsYou have been assigned to a second group to work through case studies and problems over the past four weeks.Now is the time to evaluate yourself and your group members you have worked with since the midtermassignment. The evaluation form is provided. Be honest and specific with your comments. Provide at least onenarrative comment for each group member – including you. Each student will earn up to 50 points for their groupwork participation (100 points for the term). The 50 group participation points are separate from the 200-pointfinal assignment.Evaluations are confidential and should not be shared by you and will not be shared by the instructor. There willbe a box available in class on the assignment due date to place your confidential evaluations in. If you submit yourfinal assignment early do not staple it to your final; simply place in my mailbox.Final course grades will be loaded to your official transcript (not the class portal) no later than Friday June 14thI will retain the final exams in my office until the end of the fall 2013 term. If you would like your exam back feelfree to come to my office in the fall or you may include a self-addressed stamped envelope with two(2) stampswith your final exam submission and I will be happy to mail your scored final exam to you.* The 2012-13 school year has been very challenging and rewarding for me. Thank you for trusting me with thispart of your education – it has been my honor to hopefully add some small value to your future.Remember - Anything worth achieving will always be challenging.BA213 Spring 2013Final, Version 2 200 PointsName: ____________________________________ Section _____________1. Profit MaximizingCh08A company believes it can sell 2,000,000 units of its proposed new bottle stopper at a priceof $16.00 each. If the company desires to make a profit of $3,000,000 on the bottlestopper, what is the target total cost for each bottle stopper?$16.00$14.50$17.50$9.672. Net Present Value – Comparing Two OptionsCh09Projects A and B both have an initial outflow of $100,000. Project A will return a cash flowof $30,000 each year for the next 5 years. Project B will return $40,000 in year 1, $30,000in year 2, $30,000 in year 3, $30,000 in year 4, and $20,000 in year 5.Which project will have the higher net present value?The answer cannot be determined withoutknowing the initial investment.Project AProject BThe answer cannot be determined withoutknowing the required rate of return.3. Production Budget – Material CostCh10Bake Time makes and sells baking pans. Each pan uses 0.70 pounds of aluminum.Budgeted production and sales of pans in units for the next five months is as follows:June July August September OctoberBudgetedproduction22,180 21,940 24,940 26,240 23,720Budgetedsales22,400 21,300 24,500 26,700 24,400The company wants to maintain monthly ending inventories of aluminum equal to 15% ofthe following month’s budgeted production needs, and monthly inventories of pans equalto 20% of the number needed for next month’s sales. The cost of aluminum is $0.85 perpound. How much is the cost of budgeted material purchases for August?$14,693$17,595$14,869$14,955$13,322None of theanswer choicesare correct.4. Cash Budget – Accounts Receivable – Cash FlowCh10Jazzy Janitors has found that only 10% of its invoiced amounts are paid in the same monththat the work is completed. Sixty percent are paid in the month after the work is completedand 30% are paid in the second month after the work is completed. During December2013, Jazzy Janitors’ invoiced $200,000 to clients. Projected revenues for the first sixmonths of 2014 are given below:Month RevenueJanuary $180,000February 215,000March 220,000April 218,000May 240,000June 255,000What is the projected Accounts Receivable balance at March 31, 2014?$114,000$280,500$222,000$262,500$180,000If you use Excel to answer, please attach to this assignmentQuestions 5 – 10 Standard Costs and Variance AnalysisCh 11Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. Thefollowing information was provided concerning its standard cost system for 2014:Budgeted and Standard DataMaterial (standard)1/4 lb. @ $14 perpoundQuantity produced (actual) 6,200 unitsLabor (standard)1.4 hrs. @ $16 perhourMaterials purchased (actual)1,600 lbs. for$13.70/poundTotal fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.Variable overhead $6.50 per unitLabor worked (actual)8,740 hrs.@$15.90/hourProduction (standard) 6,000 units Total overhead $122,0005. How much the direct material quantity variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable6. How much the direct material price variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable$456$480$900$420$456$480$900$420Budgeted and Standard DataMaterial (standard)1/4 lb. @ $14 perpoundQuantity produced (actual) 6,200 unitsLabor (standard)1.4 hrs. @ $16 perhourMaterials purchased (actual)1,600 lbs. for$13.70/poundTotal fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.Variable overhead $6.50 per unitLabor worked (actual)8,740 hrs.@$15.90/hourProduction (standard) 6,000 units Total overhead $122,0007. How much the direct labor efficiency variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable8. How much is the direct labor rate variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable$874$86$960$5,440$874$86$960$5,440Budgeted and Standard DataMaterial (standard)1/4 lb. @ $14 perpoundQuantity produced (actual) 6,200 unitsLabor (standard)1.4 hrs. @ $16 perhourMaterials purchased (actual)1,600 lbs. for$13.70/poundTotal fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.Variable overhead $6.50 per unitLabor worked (actual)8,740 hrs.@$15.90/hourProduction (standard) 6,000 units Total overhead $122,0009. How much is the overhead volume variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable10. How much is the overhead controllable variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable$2,300$2,800$0$5,100$2,300$2,800$500$5,100Extra Credit:You may choose to submit one (1) extra credit question; but not both.Question one is easier and has a value of TEN (10) points.OrQuestion two is more challenging and has a value of TWENTY (25) pointsYou may submit ONLY one or none at all.Extra Credit #1NOPAT – Measuring Income and Invested Capital when Calculating ROICh12The 2014 income statement for the East Division of Procter Wells Company is as follows:Sales $1,800,000Operating expenses 1,380,000Net operating income 420,000Interest expense 120,000Earnings before taxes 300,000Income tax expense(40%)120,000Net income $ 180,000This division’s invested capital is $4,000,000.How much is the East Division’s return on investment?5.7%10.5%6.3%7.5%Extra Credit #2Net Present Value – Depreciation – Income TaxCh09Natchez, Inc. is considering the purchase of a new machine costing $200,000. Thecompany will incur $5,000 per year in operating expenses but it will allow the company toearn an additional $100,000 per year in revenues. Natchez expects the machine to providefuture benefits for 3 years and salvage value at the end of the 3-year period to be $10,000.The company uses straight-line depreciation method. The income tax rate is 30%. If therequired rate of return is 10%, how much is the net present value of this project?$43,769$12,629$20,143None of theseanswer choicesare correct.

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Order Up, Inc., provides order fulfillment services for dot.com merchants

Order Up, Inc., provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Order Up, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.

In the most recent month, 110,000 items were shipped to customers using 5,400 direct labor-hours. The company incurred a total of $18,090 in variable overhead costs.

According to the company\'s standards, 0.05 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.40 per direct labor-hour.

Break down the difference computed in (1) above into a variable overhead rate variance and a variable overhead efficiency variance.

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Knopfler Corporation’s balance sheet at December 31, 2011, included the following information

Actg 201 Comprehensive Project

Knopfler Corporation’s balance sheet at December 31, 2011, included the following information:



Knopfler Corporation

Balance Sheet

At December 31, 2011

Cash

$ 24,600

Accounts Payable

$25,600

Accounts Receivable

45,500





Allow. for Doubtful Accounts

(1,500)

Common Stock ($10 Par)

50,000

Supplies

4,400

PIC- in Excess of Par Common

30,000

Land

40,000

Retained Earnings

127,400

Building

142,000





Accumulated Depreciation

(22,000)





Total Assets

$233,000

Total Liabilities & Equity

$233,000



The following transactions occurred during 2012:

Knopfler performed services for $288,000 on account.
On August 1, Knopfler collected fees of $48,000 in advance for services to be performed evenly between September 1, 2012 and September 1, 2013.
Knopfler collected cash of $275,000 from customers on account.
Knopfler purchased $30,100 of supplies on account.
Knopfler paid $34,500 to suppliers on account.
Knopfler paid $192,200 for operating expenses.
On December 15, 2012, Knopfler declared the annual dividend of $1.50 per share on the outstanding common stock. The dividends will be paid on January 15, 2013.
An accounts receivable of $1,600 was written off as uncollectible.
December 31, 2012 - Adjustment data:

A count of supplies indicated that $6,900 of supplies remain unused at year end.
Calculated and recorded the revenue earned from transaction #2 above.
The allowance for doubtful accounts was estimated to be 5 percent of accounts receivable (round to the nearest dollar).
Depreciation on the building was calculated on the straight-line basis based on an estimated 20 year life and an estimated $10,000 salvage value.


Required:

Prepare the necessary journal entries for the transactions listed above (omit explanations).
Post the numbers from the journal to the ledger.
Prepare the trial balance (unadjusted) dated December 31, 2012.
Prepare the required adjusting journal entries from the adjustment data.
Post the numbers from the journal to the ledger.
Prepare the adjusted trial balance dated December 31, 2012.
Prepare Knopfler’s required income statement, statement of retained earnings, and balance sheet (all in good form) for 2012.
Prepare the necessary closing entries in the Journal.
Post the closing entries to the Ledger

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Tioga Chemical Corporation has a line of credit from the Southern Tier National Bank that is due to be renewed February 1, 20x2

Tioga Chemical Corporation has a line of credit from the Southern Tier National Bank that is due to be renewed February 1, 20x2. The bank has requested the current income statement and comparative balance sheets for December 31, 20x0 and 20x1, which follow: Tioga Chemical Corporation Income and Retained Earnings Statement For the Year Ended December 31, 20x1 (in thousands) Revenue: Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500 Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,500 Case 21–42 Interpretation and Use of Financial Ratios (LO 1, LO 5) Chapter 21 Analyzing Financial Statements 79 Expenses: Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,500 Selling and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,625 Depreciation and amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,875 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55,500 Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,000 Income tax expense (40%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,400 Less: Dividends to common stockholders ($3.86 per share) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,550 Net income added to retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,850 Retained earnings, 1/1/x1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,550 Retained earnings, 12/31/x1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,400 Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.18 Tioga Chemical Corporation Comparative Balance Sheets December 31, 20x1 and 20x0 (in thousands) Assets 20x1 20x0 Current assets: Cash and marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,950 $ 1,575 Receivables, less allowance for doubtful accounts ($84 in 20x1 and $105 in 20x0) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600 3,750 Inventories (at lower of cost or market) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,875 4,650 Prepaid items and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 225 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,800 $10,200 Other assets: Investments (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,950 $ 7,950 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 600 Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,700 $ 8,550 Property, plant, and equipment: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 900 $ 900 Buildings and equipment, less accumulated depreciation ($9,450 in 20x1 and $9,150 in 20x0) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,100 $18,600 Total property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000 $19,500 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,500 $38,250 Liabilities and Stockholders’ Equity 20x1 20x0 Current liabilities: Short-term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,650 $ 1,800 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,400 5,325 Salaries, wages, and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,950 2,025 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,000 $ 9,150 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 12,825 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000 $21,975 Stockholders’ equity: Common stock, at par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,300 $ 3,150 Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800 4,575 Total paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,100 $ 7,725 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,400 8,550 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,500 $16,275 Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,500 $38,250 The bank also has requested that Tioga Chemical Corporation calculate several ratios and report the latest industry ratios. The firm’s ratios have not been calculated for 20x1. However, the accounting staff has gathered the following industry ratios, which are the latest available. Current ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.86 Acid-test ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 Debt-equity ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23 Interest coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.78 Dividend payout ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.57% Return on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.42% Return on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.37% Return on equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.48% Required: 1. Explain why the bank would be interested in the comparative financial statements and the preceding financial ratios. 2. Calculate the following financial ratios for 20x1 for Tioga: a. Return on sales. b. Return on assets. c. Return on equity. d. Current ratio. e. Acid-test ratio. f. Debt-equity ratio. g. Interest coverage. h. Dividend payout ratio. 3. By comparing the ratios calculated in requirement 2 with the industry ratios, evaluate Tioga’s operations. (CMA, adapted)

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Selected transactions for the Finney Company are presented in journal from below

Selected transactions for the Finney Company are presented in journal from below. Post the transactions to T accounts. Determine each account\'s ending balance. (If there is no transaction, enter No entry as the date and 0 for the amount. Do not leave any fields blank. List multiple entries in order of date.)

Date

Account Titles and Explanation

Ref.

Debit

Credit

May 5

Accounts Receivable



5,000





Service Revenue





5,000



(Billed for services provided)







12

Cash



2,400





Accounts Receivable





2,400



(Received cash in payment of account)







15

Cash



3,000





Service Revenue





3,000



(Received cash for service provided)

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