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ATC 3-4 Writing Assignment Operating leverage, margin of safety, and cost behavior In the early years of the 21st century the housing market in the United States was booming. Housing prices were increasing rapidly, new houses were being constructed at a record pace, and companies doing business in the construction and home improvement industry were enjoying rising profits. In 2006 the real estate market had slowed considerably, and the slump continued through 2007. Home Depot was one major company in the building supplies industry that was adversely affected by the slowdown in the housing market. On August 14, 2007, it announced that its revenues for the first half of the year were 3 percent lower than revenues were for the first six H months of 2006. Of even greater concern was the fact that its earnings for the first half of 2007 were 21 percent lower than for the same period in the prior year. Required
Write a memorandum that explains how a 3 percent decline in sales could cause a 21 percent decline in profits. Your memo should address the following: a. An identification of the accounting concept involved. b. A discussion of how various major types of costs incurred by Home Depot were likely affected by the decline in its sales. c. The effect of the decline in sales on Home Depot's margin of safety. D ATC 3-5 Ethical Dilemma Opportunity to manipulate earnings E A N
Determine how the costs in (a) and (b) should be presented on Erin's financial statements as of December 31, 2008. Also determine the amount of amortization of intangible assets that Erin should record in 2008 and 2009.
Why are sunk costs irrelevant in deciding whether to sell a product in its present condition or to make it into a new product through additional processing?
assume a nike outlet store began in august 20x0 with 40 pairsof running shoes that cost the store 40 each. the sale
You are considering a five-year lease of office space for R&D personnel. Once signed, the lease cannot be canceled. It would commit your firm to six annual $100,000 payments, with the first payment due immediately.
Starr Company has already manufactured 50,000 units of Product A at a cost of $50 per unit. The 50,000 units can be sold at this stage for $1,250,000. Calculate the Incremental Net Income if processed further.
Squid reported net income of $100,000 for 2005. Minority interest income that will appear in the consolidated income statement for 2005 is
Prepare a classified balance sheet in good form. common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares.
based on your knowledge from a past or present job explain the difference between a group and a team. would you say you
The Sarbanes Oxley Act of 2002 had a profound impact on management and auditors' responsibility for internal control. Please let us know how things changes for both management and auditors after the passage of Sarbanes Oxley as it relates to inter..
George plans to sell his customers a special for a ski package weekend. He is able to purchase the package from the providers for $175 each. The ticket packages will be sold for $225 each and the ski resort and lodging facilities intend to reimbur..
How can management practices speed the collection of receivables? Which management practices tend to slow the collection of receivables?
1) What are the maturities on Intel's Long-term debt?
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