Reference no: EM132539516
Question 1: Use the following information for Razor Company to compute inventory turnover and days' sales in inventory for 2011.
2011 Net sales $647,500 , Cost of goods sold 388,500 ending inventory 77,700
2010 Net sales $582,000, Cost of goods sold 360,840 Ending inventory 79,380
Your answer must include the following items :
A- Explain The indication of these ratios and if its increase or decrease is better .
B- Get another ratio to evaluate the management of Inventory and explain it .
Question 2: On Jan. 1, 2011, a company issued the following bonds:
Par Value: $800,000 , Stated Interest Rate: 9% , Interest Dates: 6/30 and 12/31
Maturity Date : Dec. 31, 2030 (20 years)
On June 30, 2011, the issuer of the bond pays the first semiannual interest payment.
On December 31, 2030, the bonds mature and the issuer of the bond pays face value to the bondholders. Required : Prepare journal entries to record transactions
After you solve the questions your answer must include the following items :
- Explain in details the journal entries ( why its recorded in debit or credit side ) and the nature of account Dr or Cr and its classification Assets , liabilities , owner's equity , Revenue or expenses .
- Compare between bonds and shares .
- Explain the financial leverage .