Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Question
Chapter 1, Problem 1.2P
a)
Summary Introduction
To determine: The net profit of the firm.
Introduction:
The company’s total earnings incurred are termed as net profit. It is an amount of money left after considering interest, taxes, operating expenses, and revenue earned by the company.
b)
Summary Introduction
To determine: The net cash flows.
Introduction:
Cash flow refers to the movement of cash from one entity to another. The
c)
Summary Introduction
To discuss: The statement that is more useful for the
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Accrual income versus cash flow for a period. Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with a proviso that they must be paid for within 30 days but can be returned for a full refund credit within 90
days. In 2018, Thomas shipped and billed book titles totaling $830,000. Collections, net of return credits, during the year totaled $758,315. The company spent $315,712 acquiring the books that it shipped.
a. Using accrual accounting and the preceding values, show the firm's net profit for the past year.
b. Using cash accounting and the preceding values, show the firm's net cash flow for the past year.
c. Which of these statements is more useful to the financial manager? Why?
a. Using accrual accounting and the preceding values, show the firm's net profit for the past year in the following table. (Round to the nearest dollar.)
Accounting View
(accrual basis)
Thomas Book Sales, Inc.
Income Statement
for the Year Ended 12/31
Sales…
Accrual income versus cash flow for a period.
Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with a proviso that they must be paid for within 30 days. For simplicity, assume there are no returns and no bad debts (i.e., bookstores pay on time). This year, Thomas shipped and billed book titles totaling $660,000. Collections, during the year totaled $603,316. The company spent $266,861 acquiring the books that it shipped.
a. Using accrual accounting and the preceding values, show the firm's net profit for the past year.
Sales Revenue............?
Less: Costs...................?
Net Profit......................?
b. Using cash accounting and the preceding values, show the firm's net cash flow for the past year.
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Less: Cash Outflow.................?
Net Cash Flow.....................?
c. Explain why the accrual and cash accounting methods show different net profits. How do the two…
HANDOUT PROBLEM for CURRENT LIABILITIES
I.
Prepare journal entries for the following transactions which took place in 2021.
Sold various products for $180,000 on account. The products cost $85,000. Sales
a.
tax in your area is 8%. Your company uses a periodic inventory system.
Your sales in part "a" included an offer for cash rebates of 2% of the $180,000
total sales price if the customer answers a short five-question internet survey.
b.
с.
On November 1, 2021, your company collected $12,000 of rent on your extra
office. The rent covers the six-month period from November 1, 2021 through
April 30, 2022.
Recorded $62,000 of wages earned by employees including $9,000 of
d.
withholding taxes, $4,000 of FICA taxes, and $2,800 of health insurance benefits.
There were no other deductions from the employees' paychecks.
e.
Recorded EMPLOYER taxes on the wages in "a." Unemployment is a total of
3% of the gross earnings.
f.
On December 1, 2021, your company received notice that you were being…
Chapter 1 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 1.1 - What is the goal of the firm and, therefore, of...Ch. 1.1 - For what three main reasons is profit maximization...Ch. 1.1 - What is risk? Why must financial managers consider...Ch. 1.1 - Is maximizing shareholder wealth inconsistent with...Ch. 1.2 - What are the main types of decisions that...Ch. 1.2 - Prob. 1.6RQCh. 1.2 - Prob. 1.7RQCh. 1.2 - What are the major differences between accounting...Ch. 1.2 - Prob. 1.9RQCh. 1.3 - Prob. 1.10RQ
Ch. 1.3 - Prob. 1.11RQCh. 1.3 - What does it mean to say that corporations face a...Ch. 1.3 - Prob. 1.13RQCh. 1.3 - Prob. 1.14RQCh. 1.3 - Prob. 1.15RQCh. 1 - Learning Goal 4 ST1-1 Emphasis on Cash Flows...Ch. 1 - Prob. 1.1WUECh. 1 - Prob. 1.2WUECh. 1 - Learning Goal 4 E1-3 The end-of-year parties at...Ch. 1 - You have been made treasurer for a day at AIMCO,...Ch. 1 - Recently, some branches of Donut Shop, Inc., have...Ch. 1 - Ross Company, a manufacturer of pharmaceuticals,...Ch. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Cash flows It is typical for Jane to plan,...Ch. 1 - Marginal cost-benefit analysis and the goal of the...Ch. 1 - Identifying agency problems, costs, and...Ch. 1 - Corporate taxes Tantor Supply, Inc., is a small...Ch. 1 - Prob. 1.7PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.9PCh. 1 - Interest versus dividend expense Michaels...Ch. 1 - Hemingway Corporation is considering expanding its...Ch. 1 - Prob. 1.12PCh. 1 - Prob. 1SE
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