Exercise 13-07 Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below. End of Year Beginning of Year Cash and cash equivalents $ 770 $ 69 Accounts receivable (net) 1,950 1,880 Inventory 810 860 Other current assets 590 331 Total current assets $4,120 $3,140 Total current liabilities $2,030 $1,640 For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million. Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover and days in inventory at the end of the current year.

Answer: See explanation

Explanation:

1. Current Ratio = Current Assets / Current Liabilities

= $4,120 / $2030

= 2.03

2. Accounts receivable Turnover:

= Net Credit Sales / Average Accounts Receivables

= 8,258 / (1950+1880 / 2)

= 8258 / 1915

= 4.31

3. Average Collection Period

= 365 / Account Receivable Turnover

= 365 / 4.31

= 84.69 Days

4. Inventory Turnover:

= Cost of Goods Sold / Average Inventory

= 5328 / (810+860 / 2)

= 5328 / 835

= 6.38 times

5. Days in Inventory:

= 365 / Inventory Turnover Ratio

= 365 / 6.38

= 57.21 Days

You are considering a project in Honduras that would generate 1.5 million dollars in cash flows per year going forever. The cost of the project is 8 million dollars. The discount rate for the project is 12%. You believe that there is some probability of expropriation prior to the 4th year (after the 3rd cash flow). Which of the following fully describes when this is a good project?
a. This is a good project if the probability of expropriation is larger than 0.33
b. This is a good project if the probability of expropriation is smaller than 0.33
c. This is a good project if the probability of expropriation is smaller than 0.5
d. This is a good project if the probability of expropriation is smaller than 0.66 7.

According to the literature on organizational conflict, constructive conflict Question 1 options: tends to produce beneficial outcomes, particularly better decision making. is the main source of conflict in organizations. is the only conflict management style that has high assertiveness and low cooperativeness. is one of the most common outcomes of organizational conflict.

A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead): Plus Max Units produced 200 16,000 Batch size (units) 10 400 Number of setups 20 40 Direct labor hours per unit 5 5 Total direct labor hours 1,000 80,000 Cost per setup$1,080 Total setup cost$64,800 Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Plus and Max, respectively is:Multiple Choice$21.60; $.54.$60.00; $60.00.$108.00; $2.70.$54.00; $27.00.$200.00; $16,000.00

Teal Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $3,420,000 on March 1, $2,280,000 on June 1, and $5,700,000 on December 31. Teal Company borrowed $1,900,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $3,800,000 note payable and an 11%, 4-year, $6,650,000 note payable. Compute avoidable interest for Teal Company. Use the weighted-average interest rate for interest capitalization purposes

Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 7.5 ounces $ 8.00 per ounce $ 60.00 Direct labor 0.9 hours $ 19.00 per hour $ 17.10 Variable overhead 0.9 hours $ 8.00 per hour $ 7.20 The company reported the following results concerning this product in June. Originally budgeted output 2,900 units Actual output 2,500 units Raw materials used in production 19,500 ounces Purchases of raw materials 22,400 ounces Actual direct labor-hours 4,700 hours Actual cost of raw materials purchases $ 41,400 Actual direct labor cost $ 12,900 Actual variable overhead cost $ 3,450 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for June is: Multiple Choice $1,386 U $6,000 U $6,000 F

On January 1 of this year, Nowell Company issued bonds with a face value of $240,000 and a coupon rate of 6.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 6.0%.
1. What was the issue price on January 1 of this year?
2. What amount of interest expense should be recorded on June 30 and December 31 of this year?
3. What amount of cash is owed to investors on June 30 and December 31 of this year?
4. What is the book value of the bonds on December 31 of this year, December 31 of next year?

Smith and Sons, Inc. Income Statement (in millions)

2016 2015
Net sales 10,300 9,800
Cost of goods sold (5,500) (5,200)
Gross profit 4,800 4,600
Selling and administrative expenses (2,800) (2,700)
Income from operations 2,000 1,900
Interest expense (300) (250)
Income before income taxes 1,700 1,650
Income tax expense (420) (400)
Net income 1,280 1,250

Smith and Sons, Inc. Balance Sheet

Assets
Current assets
Cash and cash equivalents 450 650
Accounts receivable 900 800
Inventory 750 900
Other current assets 400 250
Total current assets 2,500 2,600
Property, plant & equipment, net 2,350 2,250
Other assets 5,700 5,900
Total Assets 10,550 10,750

Liabilities and Stockholders' Equity
Current liabilities 3,250 3,150
Long-term liabilities 5,000 5,400
Total liabilities 8,250 8,550
Stockholders' equity-common 2,300 2,200
Total Liabilities and Stockholders' Equity 10,550 10,750

Required:
Calculate the quick ratio for Smith & Sons, Inc., for 2015 and 2016.

In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $24,000 and ending work in process inventory of $29,000. During the month, the cost of units transferred out from the department was $159,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:

Dess Inc., a manufacturing company, has provided the following data for the month of August. The balance in the Work in Process inventory account was $10,000 at the beginning of the month and $22,000 at the end of the month. During the month, the used direct material cost was $63,000, and direct labor cost was $39,000. The manufacturing overhead cost was $43,000.
1. The manufacturing costs for August was:
A. $59,000
B. $67,000
C. $145,000
D. $133,000
2. The cost of goods manufactured for August was:
A. $133,000
B. $142,000
C. $145,000
D. $130,000

Help! Select the qualification that is best demonstrated in each example.

Melanie is a fitness instructor who encourages her students to achieve their goals. ____
1. Ability to handle money
2. Accuracy and attention to detail
3. Leadership skills
4. Organizational skills
Jacob counts and organizes cash at a casino. _____
1. Maintenance of safety
2. Communication skills
3. Teamwork skills
4. Ability to handle money
Adra is proud that she has never had an accident while running a ride at an amusement park. ______
1. Organizational skills
2. Leadership skills
3. Ability to operate equipment safety
4. Communication skills

Juan plans fun activities for groups of people. _____
1. Communication skills
2. Accuracy
3. Teamwork skills
4. Organizational

The CEO is considering your recommendations, and it will take time to make some of these changes. However, you know that it's not just the structure of the department that is stifling creativity. You believe that the culture could be significantly improved, and you want to start working on these issues ASAP. It will be a slow process to make some of these changes, but the time to get started is now. You have a lot of ideas, but only a few should be implemented initially. Which three do you think should be started immediately

Indicate the effect each separate transaction has on investing cash flows.

a. Sold a truck costing $42,500, with $23,000 of accumulated depreciation, for $9,000 cash.
b. The sale results in a $10,500 loss. Sold a machine costing $11,600, with $8,500 of accumulated depreciation, for $6,000 cash.
c. The sale results in a $2,900 gain. Purchased stock investments for $16,500 cash. The purchaser believes the stock is worth at least $31,000.

Ellis Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $475,000 Raw materials (all direct) requisitioned for use in production $476,000 Direct labor cost $640,000 Manufacturing overhead: Indirect labor cost $174,000 Other manufacturing overhead costs incurred $498,000 Cost of goods manufactured $1,469,000 Cost of goods sold (unadjusted) $1,430,000 6. The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is:

Bonita Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given below.
1. January cash receipts recorded in the December cash book consisting of:
Cash sales $28,000
Collections on account, for which $360 of cash discounts were given 17,640
$45,640
2. January cash disbursements recorded in the December check
register liquidated accounts $22,450
Discounts taken 250
3. The ledger has not been closed for 2017.
4. The amount shown as inventory was determined by physical count on December 31, 2017.
The company uses the periodic method of inventory.
Instructions
(A) Prepare any entries you consider necessary to correct Francis’s accounts at December 31.
(B) To what extent was Francis Equipment Co. able to show a more favorable balance sheet at December 31 by holding its cash book open? Assume that the balance sheet that was prepared by the company showed the following amounts:
Debit Credit
Cash $39,000
Accounts receivable 42,000
Inventory 67,000
Accounts payable $45,000
Other current liabilities 14,200

what is the role of education to become a manager ?​

Clementine Company makes skateboards. They prepare master and flexible budgets and then perform variance analysis after the budget plan period elapses. Their data is as follows: Budget Actual Selling price per unit $96 $104 Variable cost per unit $52 $55 Quantity sold 996 1,024 What is the Clementine's volume variance for SALES? If the variance is unfavorable put a minus sign in front of your answer. Enter your answer without commas or decimals.

Suppose that applying for membership in the European Monetary Union (EMU) is expensive, so three hypothetical countries, Baltia, Polsha, and Atlantida, have come to you with their relevant data and want advice on if they should apply to join the EMU. Suppose that the average inflation rate of the three European countries with the lowest inflation rates is 3.0%, and the average long-term interest rate of those countries is 3.2%.
Evaluate the characteristics of Baltia, Polsha, and Atlantida presented in the following table using the Maastricht convergence criteria. Then, complete the bottom row by identifying whether each country is eligible to become an EMU member.
Criteria Baltia Polsha Atlantida
Inflation 4.5% 4.0% 4.1%
Long-term interest rates 5.0% 4.0% 3.0%
Exchange rates Last devaluated three years ago Stable Stable
Budget deficit 2.4% of GDP 3% of GDP 2.1% of GDP
Debt outstanding 45% of GDP 45% of GDP 46% of GDP
Qualifies to enter the EMU ? ? ?

Two companies, A and B, both have $1 million in assets, earnings before interest and taxes (EBIT) of $160,000, and the same tax rate. Company A is all equity financed, and Company B is 50% debt financed and 50% equity financed. If Company B's pretax cost of debt is 8%, then Company A will have a ROA that is _____ and a ROE that is _____ than Company B's. a. Option D b. Option C c. Option B d. Option A

Budgeted Actual Sales volume 100 units 110 units Sales price $50 per unit $55 per unit Unit VC $30 per unit $33 per unit Input price for DL $10 per hour $12 per hour Input quantity per unit for DL 1.5 hours per unit 2 hours per unit Compute input efficiency variance for DL Group of answer choices $100 favorable $550 favorable $550 unfavorable 0.5 hours unfavorable $100 unfavorable

Tolbotics Inc. is considering a three-year project that will require an initial investment of $44,000. If market demand is strong, Tolbotics Inc. thinks that the project will generate cash flows of $29,500 per year. However, if market demand is weak, the company believes that the project will generate cash flows of only $2,000 per year. The company thinks that there is a 50% chance that demand will be strong and a 50% chance that demand will be weak.
If the company uses a project cost of capital of 14%, what will be the expected net present value (NPV) of this project if the company is ignoring the timing option?
a. -$3,435
b. -$3,779
c. -$3,092
d. -$3,607

Select the statement that best describes money's function as a standard of deferred payment.

a. The purchasing power of a currency is relatively stable over time
b. A currency is widely accepted in exchange for goods and services and therefore makes economic transactions easier.
c. A currency can be used to express the value goods and services that are both relatively expensive and goods and services that are relatively cheap.
d. People are willing to accept a currency in the future as compensation for debts accrued earlier

Bill Blumberg owns an auto parts business called Bill's Auto Parts. The following transactions took place during July of the current year.
July 5 Purchased merchandise on account from Wheeler Warehouse, $4,300.
8 Paid freight charge on merchandise purchased, $230.
12 Sold merchandise on account to Big Time Spoiler, $3,500. The merchandise
cost $2,500.
15 Received a credit memo from Wheeler Warehouse for merchandise, $670.
22 Issued a credit memo to Big Time Spoiler for merchandise returned, $820.
The cost of the merchandise is $550.
Required:
1. Journalize the above transactions in a general journal using the periodic inventory method.
2. Journalize the above transactions in a general journal using the perpetual inventory method.

Worthington Machining must decide whether to purchase Process A with specialized metal folding equipment needing two employees to operate it or Process B with general purpose folding equipment requiring five employees. Process A requires a fixed cost of $1,430,000 and a variable cost of $14.32 per metal panel. Process B requires a fixed cost of $820,000 and a variable cost of $20.05. Process A is more automated than Process B. What is the break-even quantity between these two processes

The common stock of Dayton Repair sells for $43.19 a share. The stock is expected to pay $2.20 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.25 percent annually and expects to continue doing so. What is the market rate of return on this stock

On January 1, 2021, Gundy Enterprises purchases an office building for $305,000, paying $55,000 down and borrowing the remaining $250,000, signing a 9%, 10-year mortgage. Installment payments of $3,166.89 are due at the end of each month, with the first payment due on January 31, 2021.

Required:
a. Record the purchase of the building on January 1, 2021.
b. Complete the first three rows of an amortization schedule.
c. Record the first monthly mortgage payment on January 31, 2021.
d. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan?

Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.4 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.

Required:
a. Prepare the journal entries on October 1, 2021, to record the issuance of the note.
b. Record the adjustments on December 31, 2021.
c. Prepare the journal entries on September 30, 2021, to record payment of the notes payable at maturity.

Part of the screening process when choosing which markets to expand to involves gathering information on local markets. One way to gain information is by participating in trade fairs and trade missions. However, companies will often need additional information on markets that require further research. Collecting primary data in foreign markets can present some challenges in researchers especially because of cultural and technical differences between the markets. Identify whether each statement about the research process is most kikely to be associated with cuftural differences between markets or technical differences.

a. The meaning of words can change from one region to another.
b. Research instruments may need to be translated.
c. Social desirability bias may exist.
d. Street signs may be unreadable.
e. Mail service may be unreliable.

1. Cultural Differences
2. Technical Differences

Fiona is a manager who believes in Theory Y of leadership. What does she assume about her employees according to this theory? A. Employees have to be reprimanded for bad ideas. B. Employees are self-motivated in their work. C. Employees need constant supervision. D. Employees are always ready to leave the company.

You have decided to start a lawn service business to help pay your tuition so that you can complete your undergraduate accounting degree. You plan to provide various lawn maintenance services that will include lawn mowing services, aeration and fertilization. You and two of your friends have agreed to work for you in this new business endeavor. Which of the following would best describe organizing for your new business?
A. Preparing monthly billing statements for clients.
B. Determining the types of lawn services that you will provide for clients.
C. Providing employees with the authority to make decisions regarding a client.
D. Hiring and training new employees.

Lester sold a warehouse with an original cost of $150,000 for $230,000. The warehouse had accumulated depreciation of $40,000. The recognized gain on the sale was $ . The amount of the gain that is unrecaptured Section 1250 gain is $ and will be taxed at a maximum rate of percent. The remaining $ will be taxed at a maximum rate of 20%.