(TASK 8). GROSS PROFIT RATIO (GP RATIO) It is a profitability ratio that shows the relationship between gross profit and total net sales revenue. It is a popular tool to evaluate the operational performance of the business. The ratio is computed by dividing the gross profit figure by net sales. Formula: The following formula/equation is used to compute gross profit ratio: When gross profit ratio is expressed in percentage form, it is known as gross profit margin or gross profit percentage
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EXERCISE 5-6 (a) Dec. 3 Accounts Receivable 18,000 Sales 18,000 3 Cost of Goods Sold 10,000 Merchandise Inventory 10,000 7 No entry necessary. 8 Sales Returns and Allowances 1,200 Accounts Receivable 1,200 Merchandise Inventory 650 Cost of Goods Sold 650 11 Cash ($16,800 – $336) 16,464 Sales Discounts [($18,000 – $1,200) × 2%] 336
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Waldo Company and data on purchases and sales for a three-month period are as follows: Date March 3 March 8 March 11 March 30 April 8 April 10 April 19 April 28 Transaction Inventory Purchase Sale Sale Purchase Sale Sale Purchase No. of units 60 120 80 50 100 60 30 100 Per Unit $1,500 1,800 5,000 5,000 2,000 5,000 5,000 2,200 Total $90,000 216,000 400,000 250,000 200,000 300,000 150,000 220,000 1. Record the inventory, purchases and cost of goods
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ratio 15 BIBLIOGRAPHY: 16 APPENDICES 17 2.2 explain the importance of financial planning A financial plan is made up of financial statements that forecast the resources and provides the structure to the way of finance are handled within the company. It has two objectives. First, It ensures the availability of the funds that guarantee the timely availability of finance. Secondly, to see whether the business does not raise resources unnecessarily. In this section, We’ll be discussing the importance
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equity. X 3. A company with total stockholders’ equity of $85,000 paid a $10,000 business debt. As a result of this transaction, total stockholders’ equity a. did not change. X b. increased by $10,000. c. decreased by $10,000. d. increased to $95,000. 6. The purpose of recording depreciation on productive assets is to a. reflect the decline in the market value of the assets each period. b. reduce income when the company has an exceptionally profitable
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Financial Statements Name: Course: Instructor: Date: Financial statements: Balance Sheet (2014) |Assets |Amount |Liabilities + Capital |Amount | | |£ | |£ | |Fixed assets |
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producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central operations.” In other words, revenue tracks the inflow of net assets that occurs when a business provides goods or services to its customers. The realization principle requires that two criteria be satisfied before revenue can be recognized: The earnings process is judged complete or virtually complete (the earnings process refers to the activity or activities performed by the company to generate
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Bill and Hold; Principal-agent; consignments; Warranties; Upfront fees. | 5, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30 | 13, 14, 15, 16, 17, 18, 20 | 10, 11, 12, 13, 14, 15, 16 | 1, 2, 3, 5, 6, 7, 8, 9 | 2, 3, 4, 6, 7 | 8. Presentation, Contract Costs, Collectability. | 30, 31, 32, 33 | 19 | 17, 18, 19, 20 | | 1, 2, 6 | *9. Long-Term Contracts | 34, 35, 36, 37 | 21, 22, 23 | 21, 22, 23, 24, 25 | 10, 11, 12 | 8 | *10. Franchising. | 38 | 24 | 26, 27 | 13 | | *Material is in the Appendices
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2011 fiscal periods (Colorado Technical University Online, 2012). The Managerial Accounting information collected helps the internal users to use strategic planning, and operate efficiently while evaluating the performance of all areas within the company (Atkinson, Kaplan, Matsumura, & Young, 2012). This allows them to have a better handle on the operations. Thus, allowing for a more informed decision making process (Atkinson, Kaplan, Matsumura, & Young, 2012). Previously, the managerial accounting
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of the financial difficulties the company was facing in its expense control, marketability of costumer’s products, liquidity position, coverage ratio, and profitability, the bank, in due course, approved the loan for Savola Company. However, it had imposed many restrictions and covenants on the company in order to insure the recovery of the funds loaned. This paper will first present a general-idea of Savola, then the background of Savola Company, its history, owners and management
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