ACC 345 - Module 7- Business Valuation - Project
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Business Valuation: Amazon
Luisa Leo
Southern New Hampshire University
ACC 345: Financial Statement Analysis/Business Valuation
Final Project
Josue Roman
December 10, 2023
Milestone One: Introduction
............................................................................................................
3
Links
.............................................................................................................................................
3
History and Overview
..................................................................................................................
3
Summary
......................................................................................................................................
5
Milestone One References
...........................................................................................................
5
Milestone Two: Financial Analysis
.................................................................................................
5
Balance Sheet Analysis
................................................................................................................
5
Income Statement and Cash Flow Analysis
.................................................................................
6
Normalization Adjustments Analysis
..........................................................................................
7
Summary
......................................................................................................................................
8
Milestone Two References
...........................................................................................................
8
Milestone Three: Economic Outlook
...............................................................................................
8
Microeconomic Industry Analysis
...............................................................................................
8
General Macroeconomic Analysis
.............................................................................................
10
Summary
....................................................................................................................................
11
Milestone Three References
.......................................................................................................
11
Project
............................................................................................................................................
11
Assumptions and Rationale
........................................................................................................
11
Analysis
......................................................................................................................................
12
Project References
......................................................................................................................
12
Valuation Team Report
..............................................................................................................
12
Milestone One: Introduction
Links
1.
Provide the company's most recent SEC Form 10-K Filing link. https://www.sec.gov/archives/edgar/data/1018724/000101872421000004/
amzn20201231.htm
.
2.
Provide the most recent SEC Proxy Filing link for the company.
https://www.sec.gov/archives.edgar/data/1018724/000119312518121077/d514607ddef14a.htm
.
History and Overview
1.
Provide a brief company history overview based on external company research. Consider the following questions to guide your response:
A.
How long has the company been in business?
The company has been in business for 29 years Since July 5, 1994. The company was founded in Bellevue, Washington. B.
Who was the founder of the company?
Jeff Bezos founded Amazon from his Garage in Bellevue, Washington
.
C.
What significant changes to company leadership have occurred?
Amazon Founder Jeff Bezos Stepped down as CEO on July 5, 2021, precisely to that day 27 years later, to focus on other Projects. D.
How has the company changed since its beginning? Consider expansion of locations or products/services, etc.?
In the beginning, Amazon opened as an online bookstore with the world's most extensive collection of books with WWW access. Today, after 29 years, you can
get anything in just one click. It has expanded to many product categories, a strategy that has earned the moniker The Everything Store (Wikipedia. 2023). 2.
Identify all the company’s significant locations for their facilities and other properties.
There are 185 Amazon fulfillment centers around the world. The largest Amazon facility
is in Mt. Juliet, Tennessee. Currently, Amazon Headquarters is in Seattle, WA. 3.
Identify all the customers recognized by the company.
Find this information in the annual Form 10-K filing, in Part 1, Item 1: Business
.
Amazon.com, Inc. was incorporated in 1994 in the state of Washington and reincorporated in 1996 in Delaware. Their principal corporate Offices are in Seattle, Washington. They completed their initial public offering in May 1997, and common stock is listed on the Nasdaq Global Select Market under the symbol “ÄMZN.”
4.
List all the names of the company's executive management team.
Find this information in the annual Form 10-K filing in Part 3, Item 10: Directors, Executive Officers, and Corporate Governance or in the Annual Proxy filing, under “Executive Officers” or “Officers Compensation.” You may copy and paste a chart from the annual Form 10-K filing into this section. Be sure to add your
explanation of the information in the chart along with an attribution and a citation in the References section at the bottom of this template.
Information regarding our Executive Officers required by item 10 of Part III is outlined in
item 1 of Part I, “Business---Executive Officers and Directors.” Information required by Item 10 of Part III regarding our Director and any material changes to the process by which security holders may recommend nominees to the Board of Directors is included in
our Proxy Statement relating to our 2012 Annual Meeting of Shareholders and is incorporated herein by reference. Information relating to our Code of Business Conduct
and Ethics and compliance with section 16(a) of the 1934 Act is outlined in our proxy Statement relating to our 2012 Annual Meeting of Shareholders and incorporated herein by reference. To the extent permissible under Nasdaq Rules, we intend to disclose amendments to our Code of Conduct and Ethics and waivers of the provision thereof on our investor’s relations website under the heading “Corporate Governance: at www.amazon.com/ir.
5.
Identify all the competition recognized by the company.
Find this information in the annual Form 10-K filing, in Part 1, Item 1: Business.
We serve developers and enterprises of all sizes through Amazon Web Services (“ÄWS”), which provides access to technology infrastructure that enables virtually any business.
6.
Identify all the major shareholders of the company.
Find this information in the Annual Proxy filing under “Beneficial Ownership.”
The shareholders of Amazon:
Jeff Bezos, 9.7%
Vanguard, 7.0%
BlackRock, 5.8%
Mackensie Scott, 2.6%
7.
Describe business risks recognized by the company.
Find this information in the annual Form 10-K filing, in Part 1, Item 1A: Risk Factors. Item 1A in the annual Form 10-K will be lengthy. Do your best to summarize the risks the company has identified.
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For Year Ended December 31 Year 8 Year 7 Year 6
From income statement
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 333 $ 291 $ 496
Bad debt expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 81 65
Operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,719 3,534 3,074
December 31 Year 8 Year 7
From balance sheet
Accounts receivable, net of allowance for doubtful accounts (Year 8, $212;
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Twenty Twenty One Corp.Income StatementFor the month ended December 31, 2020Sales (P10/unit) ...................................................................................................... P900,000Variable Costs:Variable Cost of Goods Sold:Beginning Inventory ............................................................. P125,000Variable Cost of Goods Manufactured ............................... 400,000----------------Total Goods Available for Sale ........................................... 525,000Ending Inventory ................................................................. 75,000----------------Variable Cost of Goods Sold .............................................. 450,000Variable Selling Expense ....................................................... 90,000 540,000----------------- -------------------Contribution Margin ................................................................................................ P360,000Fixed Costs:Manufacturing…
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You as a young worker decide to use money in your traditional IRA account to
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withdrawal penalty and you pay a marginal tax rate of 20%, how much must you
take out of your account in order to pay the expense, the penalty, and the taxes
on your withdrawal?
Your Answer:
Answer
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1-What will be the net income?
a.
72000
b.
56000
c.
16000
d.
338000
Clear my choice
Question 43
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Marked out of 1.00
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Question text
What will be the Gross Profit at the end of the year December 2019
a.
OMR 56000
b.
OMR 16000
c.
OMR 338,000
d.
OMR 336,000
2-What is the Gross Margin in terms of Percentage?
a.
16.66
b.
16.56
c.
Cannot be determined
d.
20.66
3-What will be the total operating expense?
a.
21500
b.
53200
c.
41200
d.
19700
4-What will be the total Selling and distribution expense?
a.
41200
b.
19700
c.
14800
d.
17200
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3
Revenue ($000)Latin America division............................... $ 75,000Total Global Electronics revenue..................... $600,000Fixed corporate costs ($000)......................... $ 18,000Variable cost as a percentage of revenue.............2.5%
a. Fixed corporate costs are allocated on the basis of relative revenue. What is the target corporate cost for the Latin America division?
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Expenditures—Capital Outlay...............................................................
Cash................................................................................
Vouchers Payable.............................................................
To record purchase of computers.
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AY PARK CORPORATION
Comparative Balance Sheet
Dec. 31, 2021 Dec. 31, 2020
Assets
Cash.................................................................... $ 23,000.................................................................. $ 12,000
Accounts receivable.............................................. 18,000.......................................................... 14,000
Prepaid expenses................................................. 6,000............................................................ 9,000
Inventory.............................................................. 27,000.......................................................... 18,000
Long-term investment in bonds............................. -0- .................................................................... 18,000
Equipment............................................................…
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Assignment 3A S1 202 X
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ACCT1002 Introduction to Financial Accounting
E. Earned Net income $
(Please refer to table below and use only the info in line with your first name initial
in the blank/underlined space)
firstname Initial Net Income
A, P, I, E, V
C, O, R, Y
K, Q, M, F
S, W, G, Z
24
24
%$4
2,000,000.00
%$4
$4
1,400,000.00
1,450,000.00
1,500,000.00
N, B, J, X, H
24
F. Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders.
Using the info above and as a guide:
A. Prepare the journal entries with narrations to record the following:
The issuances of stock.
Close out net income to retained earnings.
Dividend declared.
Close out dividend to retained earnings.
10:25 AM
11/10/2021
10.162.156.242
FOWER
29232
USB
TCPAP
NO
TX AX LNK
TX AX LNK ACT LNK
F5
F7
Print
F4
F10
F11
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The comparative accounts payable and long-term debt balances for a company follow.
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Previous Year
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$41,800
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44,700
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Enter all answers as positive numbers.
Amount of Change
Increase/Decrease
Percentage
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Decrease
Increase
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Check My Work
Calculate the change in the amount and divide by the base (older) year amount to determine the horizontal analysis percentages.
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Q#1 - The accrued interest is $ ……………………………………. .
Q#2 - The total invoice price is $ …………………………………… .
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Current assets and current liabilities for Sandstone Company follow:
20Υ9
20Y8
ALGO
Current assets
$2,133,800
$1,613,300
Current liabilities
940,000
730,000
ALGO
a. Determine the working capital and current ratio for 20Y9 and 20Y8. If required,
round "current ratio" answers to two decimal places.
20Y9
20Υ8
Working capital
$4
Current ratio
b. Is the change in the current ratio from 20Y8 to 20Y9 favorable or unfavorable?
Favorable
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ALGO
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ALGO
a. Remember that current assets are compared to current liabilities to see if
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Section 1 of 1
Section #1 v
15
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Question # 22
Revisit
Choose the best option
Suppose that an entity has paid one of its liabilities twice during the year, in error The effects of this
O Assets, liabilities, and equity are understated.
mistake would be
O Assets, net income, and equity are unaffected.
O Assets and liabilities are understated.
O Assets and net profit and equity are understated, and liabilities are overstated.
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Current Attempt in Progress
Van Occupanther is the bookkeeper for Roscoe Company. Van has been trying to get the balance sheet of Roscoe Company to balance.
Roscoe's balance sheet is as follows.
ROSCOE COMPANY
Balance Sheet
December 31, 2022
Assets
Liabilities
Cash
$ 9,400
Accounts payable
$25,000
Supplies
7,100
Accounts receivable
(19,500)
Equipment
45,000
Common stock
40,000
Dividends
9,200
Retained earnings
25,200
Total assets
$70,700
Total liabilities and stockholders' equity
$70,700
Prepare a correct balance sheet. (List Assets in order of liquidity.)
ROSCOE COMPANY
Balance Sheet
田
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Q.1 Following information relates to the Snowball Manufacturing Company:
Direct materials……………………………………………. $25,000
Indirect materials………………………………………….. 5,000
Direct labor………………………………………………… 30,000
Indirect labor……………………………………………….. 4,500
Factory overhead (excluding indirect materials and indirect labor) 15,000
Plant cost 500,000
Required: Compute the prime costs, conversion costs, and product costs?
Q.2. Allure Company produces women’s clothing. During 2004, the company incurred the following costs:
Factory rent
265,000
Direct labor
325,000
Utilities-Factory
88,000
Purchases of direct materials
465,000
Indirect materials
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Indirect labors
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1. MC.14.81.ALGO
2. MC.14.96.ALGO
3. MC.11.69.ALGO
4. MC.11.112.ALGO
5. MC.15.86.ALGO
6. MC.15.125
7. MC.16.71.ALGO
8. MC.16.86.ALGO
9. MC.17.87.ALGO
10. MC.17.129
11. MC.18.58.ALGO
12. MC.18.45.ALGO
13. MC.20.81.ALGO
Mocha Company manufactures a single product by a continuous process, involving three production departments. The records.
indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and
$150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for
Department 2 were $50,000, $60,000, and $70,000, respectively. Department 2 has transferred-in costs of $390,000 for the
current period. In addition, work in process at the beginning of the period for Department 2 totaled $75,000, and work in process
at the end of the period totaled $90,000. The journal entry to record the flow of costs into Department 3 during the period is
Oa. Work in Process-Department 3…
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HRM ASSIGNMENT- MBA I| SEM
POF Entrepreneurship_MBA II Sem.pd x
PDE Financial Management - MBA II X
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5.
A company is expecting EBIT of Rs. 5,00,000 per annum on investment of Rs.
10,00,000. Company is in need of Rs. 8,00,000 for its expansion activities. Company can
raise this amount by either equity shares capital or 12% preference share capital or 10%
debentures. The company is considering the following financing patterns:
a. 10,00,000 through issue of Equity Shares at par;
b. 5,00,000 by issue of Equity Share Capital and remaining 5,00,000 by issue of
Debentures;
c. 5,00,000 through Equity Shares and 2,50,000 through 12% Preference Share Capital
and remaining 2,50,000 through 10% Debentures.;
d. 5,00,000 through Debt and 2,50,000 through Equity Shares and remaining 2,50,000
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Find out the best…
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Record each of these transactions
1 Cash………………………………………. 300,000
Capital Stock…………………………………………… 300,000
Issued capital stock at $60 per share
4 Diagnostic Equipment……………………250,000
Cash………………………………………………… 100,000
Notes Payable……………………………………… 150,000
Purchased equipment, paying part in cash and signing a note payable for the balance
12 Account Payable…………….......6,000
Cash…………………………………. $6,000
Paid account payable to Zeller Laboratories
19 surgical supplies……………………4,000
Accounts Payable……………………… $ 4,000
25 Cash…………………..80,000
Accounts Retrievable…………………….. 80,000
30 Dividends……………$50,000
Cash…………….. 500,000
ADDITIONAL REQUIREMENT FOR 3.2
Posting of transaction from General Journal to T-Accounts
Prepare trial…
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Balance Sheet
Assets
Liabilities
Current Assets
Current Liabilities
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Accounts payable. . . . . . . . . . . . . . . . . . .
36
Accounts receivable. . . . . . . . . . . . . . . . . .
25
Notes payable/short term debt. . . . . . . . . .
5
Inventories. . . . . . . . . . . . . . . . . . . . . . . . .
15
Total current liabilities. . . . . . . . . . . . . . . .
41
Total current assets. . . . . . . . . . . . . . . . . . .
93
Long-Term Assets
Long-Term Liabilities
Net property, plant, and equipment. . . . . . . .
117
Long-term debt. . . . . . . . . . . . . . . . . . . . .
138
Total long-term assets. . . . . . . . . . . . . . . . .
117
Total long-term liabilities. . . . . . . . . . . . . .
138
Total liabilities. . . . . . . . . . . . . . . . . . . .
179…
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A company purchases a 6,552-square-foot building for $375,000. The building has two separate rental units. Unit A, which has the
desirable location on the corner and contains 1,872 square feet, will be rented for $2.50 per square foot. Unit B contains 4,680 square
feet and will be rented for $1.50 per square foot.
How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation?
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Numerator Denominator % of Mkt Value
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0.00%
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Joint Cost
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pt. 16 i
Gross sales
Sales returns and allowances
Net sales
Cost of merchandise (goods) sold
Gross profit
Operating expenses:
Depreciation
Selling and administrative
Research
LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2022 and 2023
Miscellaneous
Total operating expenses
Income before interest and taxes
Interest expense
Income before taxes
Provision for taxes
Net income
$
$
$
$
GAGA
$
$
$
$
2023
19,000 $
1,000
18,000 $
12,000
6,000 $
700 $
2,200
550
360
LA LA
3,810 $
2,190 $
560
1,630
640
990
$
$
2022
15,000
100
14,900
9,000
5,900
600
2,000
500
300
3,400
2,500
500
2,000
800
1,200
Increase (Decrease)
Amount
Percent
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TRIAL balance dated Dec 31, 2019
MUSIC-IS-US, INCTRIAL BALANCEDECEMBER 31, 2018
cash …………………………………………………. $ 45,000Marketable securities…………………………. 25,000 Accounts receivable…………………………… 125,000Allowance for doubtful accounts………… $5,000Merchandise inventory……………………….. 250,000Office supplies................................................... 1,200Prepaid insurance…………………………………… 6,600 Building and fixtures…………………………… 1,791,000 Accumulated depreciation………………………. 800,000
Land…………………………………………………... 64,800Accounts payable…………………………………… 70,000Unearned customer deposits…………………… 8,000Income taxes payable………………………………. 75,000Capital stock…………………………………………. 1,000,000Retained…
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- #8Aaron Moses Company prepared the tabulation below at December 31, 2020.Net Income ............................................................................................................ $500,000Adjustments to reconcile net income to net cash provided by operating activities:Depreciation expense, $63,000 ..................................................................... ______Decrease in accounts receivable, $50,000 .................................................... ______Increase in inventory, $23,000 ....................................................................... ______Increase in accounts payable, $15,300 ......................................................... ______Increase in interest receivable, $7,000 .......................................................... ______Increase in supplies, $6,000 .......................................................................... ______Decrease in income taxes payable, $7,500…arrow_forwardFor Year Ended December 31 Year 8 Year 7 Year 6 From income statement Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 333 $ 291 $ 496 Bad debt expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 81 65 Operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,719 3,534 3,074 December 31 Year 8 Year 7 From balance sheet Accounts receivable, net of allowance for doubtful accounts (Year 8, $212; Year 7, $183) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $951 $972 Bad debt expense on accounts receivable is substantial in relation to earnings. Assume a corporate tax rate of 40%. Information on accounts receivable written off and recoveries of accounts receivable previously written off was not available from the annual reports. Required a. What effect…arrow_forwardTwenty Twenty One Corp.Income StatementFor the month ended December 31, 2020Sales (P10/unit) ...................................................................................................... P900,000Variable Costs:Variable Cost of Goods Sold:Beginning Inventory ............................................................. P125,000Variable Cost of Goods Manufactured ............................... 400,000----------------Total Goods Available for Sale ........................................... 525,000Ending Inventory ................................................................. 75,000----------------Variable Cost of Goods Sold .............................................. 450,000Variable Selling Expense ....................................................... 90,000 540,000----------------- -------------------Contribution Margin ................................................................................................ P360,000Fixed Costs:Manufacturing…arrow_forward
- Twenty Twenty One Corp.Income StatementFor the month ended December 31, 2020Sales (P10/unit) ...................................................................................................... P900,000Variable Costs:Variable Cost of Goods Sold:Beginning Inventory ............................................................. P125,000Variable Cost of Goods Manufactured ............................... 400,000----------------Total Goods Available for Sale ........................................... 525,000Ending Inventory ................................................................. 75,000----------------Variable Cost of Goods Sold .............................................. 450,000Variable Selling Expense ....................................................... 90,000 540,000----------------- -------------------Contribution Margin ................................................................................................ P360,000Fixed Costs:Manufacturing…arrow_forwardD2L Ô https://elearn.mtsu.edu/d2l/lms/quizzing/us... A ✩ C D21 Quizzes - Spring 2024 Personal Financial Planning (FIN-2010-D01, ECON-2110-D01) - Middle Tennessee St... 中 X 庙 Unit 6 Homework: Retirement & Estate Pla... 0:07:14 elapsed ✓ + A Question 11 (0.15 points) Retake question You as a young worker decide to use money in your traditional IRA account to pay for an unexpected $8250 expense. If your withdrawal faces a 10% early withdrawal penalty and you pay a marginal tax rate of 20%, how much must you take out of your account in order to pay the expense, the penalty, and the taxes on your withdrawal? Your Answer: Answer Hide hint for Question 11 The total amount you need to withdraw (X) must be the number such that when the penalty and taxes combined, you arearrow_forward1-What will be the net income? a. 72000 b. 56000 c. 16000 d. 338000 Clear my choice Question 43 Not yet answered Marked out of 1.00 Flag question Question text What will be the Gross Profit at the end of the year December 2019 a. OMR 56000 b. OMR 16000 c. OMR 338,000 d. OMR 336,000 2-What is the Gross Margin in terms of Percentage? a. 16.66 b. 16.56 c. Cannot be determined d. 20.66 3-What will be the total operating expense? a. 21500 b. 53200 c. 41200 d. 19700 4-What will be the total Selling and distribution expense? a. 41200 b. 19700 c. 14800 d. 17200arrow_forward
- 3 Revenue ($000)Latin America division............................... $ 75,000Total Global Electronics revenue..................... $600,000Fixed corporate costs ($000)......................... $ 18,000Variable cost as a percentage of revenue.............2.5% a. Fixed corporate costs are allocated on the basis of relative revenue. What is the target corporate cost for the Latin America division? b. Suppose that actual Latin America division revenues next year are $80 million, actual corporate revenues are $800 million, and actual corporate costs are $35,000 million. Compare the corporate costs that would have been allocated under the old method at Global Electronics and under the dual rate method.arrow_forwardQuestion 3. Purchased computers with a cost of $45,000; $22,000 was paid; the balance is due and is expected to be paid the end of the first quarter of the next fiscal year. Expenditures—Capital Outlay............................................................... Cash................................................................................ Vouchers Payable............................................................. To record purchase of computers.arrow_forwardAY PARK CORPORATION Comparative Balance Sheet Dec. 31, 2021 Dec. 31, 2020 Assets Cash.................................................................... $ 23,000.................................................................. $ 12,000 Accounts receivable.............................................. 18,000.......................................................... 14,000 Prepaid expenses................................................. 6,000............................................................ 9,000 Inventory.............................................................. 27,000.......................................................... 18,000 Long-term investment in bonds............................. -0- .................................................................... 18,000 Equipment............................................................…arrow_forward
- lenovo Assignment 3A S1 202 X ownloads/ACCT1002%20Assignment%203A%20S1%202021-%202022%20(1).pdf lagiarism Checker... S https://www.citethi... e (1).pdf 1 Q 回|+%00L ACCT1002 Introduction to Financial Accounting E. Earned Net income $ (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space) firstname Initial Net Income A, P, I, E, V C, O, R, Y K, Q, M, F S, W, G, Z 24 24 %$4 2,000,000.00 %$4 $4 1,400,000.00 1,450,000.00 1,500,000.00 N, B, J, X, H 24 F. Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders. Using the info above and as a guide: A. Prepare the journal entries with narrations to record the following: The issuances of stock. Close out net income to retained earnings. Dividend declared. Close out dividend to retained earnings. 10:25 AM 11/10/2021 10.162.156.242 FOWER 29232 USB TCPAP NO TX AX LNK TX AX LNK ACT LNK F5 F7 Print F4 F10 F11arrow_forward%24 2 Project: Company Accour X DZL. 7-1 Problem Set: Module Sev X CengageNOWv2 | Online tea x Cengage Learning +| x ow.com/ilrm/takeAssignment/takeAssignmentMain.do?invoker%3&takeAssignmentSessionLocator3&inprogress%3Dfalse eBook Show Me How Horizontal Analysis The comparative accounts payable and long-term debt balances for a company follow. Current Year Previous Year Accounts payable $40,964 $41,800 Long-term debt 45,594 44,700 Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Enter all answers as positive numbers. Amount of Change Increase/Decrease Percentage Accounts payable Decrease Increase Long-term debt Check My Work Calculate the change in the amount and divide by the base (older) year amount to determine the horizontal analysis percentages. Previous Check My Work 3:12 PM dp SU prt sc 144 114arrow_forwardQ#1 - The accrued interest is $ ……………………………………. . Q#2 - The total invoice price is $ …………………………………… .arrow_forward
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