This topic contains a solution. Click here to go to the answer

Author Question: If the Petty Cash Fund is not replenished on the balance sheet date, a. income will be understated. ... (Read 108 times)

EAugust

  • Hero Member
  • *****
  • Posts: 550
If the Petty Cash Fund is not replenished on the balance sheet date,
 a. income will be understated.
   b. both assets and liabilities will be understated.
   c. assets will be understated.
   d. liabilities will be overstated.
   e. both assets and income will be overstated.

Question 2

Use the following information to analyze BobKat Equipment Sales. Calculate any profit measures deemed necessary in order to discuss the profitability of the company.
  BobKat Equipment Sales
  Income Statement
  For the Years Ended Dec.
 
  31, 2015 and 2014
 
   2015 2014
   Net sales 124,000 138,000
   COGS 90,000 95,000
   Gross profit  34,000  43,000
   General and administrative expenses 31,000 36,000
   Operating profit  3,000  7,000
   Interest expense (1,000) (1,000)
   Earnings before taxes  2,000  6,000
   Income taxes 800 1,800
   Net income  1,200  4,200
 
 
 What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

dpost18

  • Sr. Member
  • ****
  • Posts: 345
Answer to Question 1

e

Answer to Question 2

2015 2014
Cost of goods sold percentage 72.6 68.8
Gross profit margin 27.4 31.2
G&A/Net sales 25.0 26.1
Operating profit margin 2.4 5.1
Effective tax rate 40.0 30.0
Net profit margin 1.0 3.1

The COGS percentage has increased causing gross profit margin to decline. Either prices of the products have decreased or cost of goods sold has increased and management has been unable to pass on the cost in the form of higher selling prices. General and administrative expenses havebeen cut, but not enough to mitigate the change in gross profit margin.This has resulted in a declining operating profit margin. The dollar amount of interest expense remained unchanged. Despite declining profits, BobKat's effective tax rate has increased 10 and caused further decline in the net profit margin.





 

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

For a complete list of videos, visit our video library