CVR Park University COVID_Pay Tracker... ps arner Support Appropriate netiquette, grammar and spelling are required udy Mate eople hat Chapter 5 1. How do the components of revenues and expenses differ between a merchandising company and a service company? 2. Maria Lopez, CEO of Sales Bin Stores, is considering a recommendation made by both the company's purchasing manager and director of finance that the company should invest in a sophisticated new perpetual inventory system to replace its periodic system. Explain the primary difference between the two systems, and discuss the potential benefits of a perpetual inventory system 3. As the end of Smyle Company's fiscal year approached, it became clear that the company had considerable excess inventory. Marvin Ross, the head of marketing and sales, ordered salespeople to add 20% more units to each order that you ship. The customers can always ship the extra back next period if they decide they don't want it. We've got to do it meet this year's sales goal," Discuss the accounting implications of Marvin's action 4. Mai Company has always provided its customers with payment terms of 1/10, 1/30. Members of its sale force have commented that competitors are offering customers 2/10, n/45. Explain what these terms mean, and discuss the implications to Mai of switching its payment terms to those of its competitors. 5. In its year-end earnings announcement press release, Ransome Corp. announced that its earnings increased by $15 million relative to the previous year. This represented a 20% increase. Inspection of its income statement reveals that the company reported a $20 million gain under "Other revenues and gains from the sale of one of its factories. Discuss the implications of this gain from the perspective of a potential investor 6. What two ratios measure factors that affect profitability? 7. Earl Massey, director of marketing, wants to reduce the selling price of his company's products by 15% lo increase market share. He says, "I know this will reduce our gross profit rate, but the increased number of units sold will make up for the lost margin. Before this action is taken, what other factors does the company need to consider? 8. The basic income statements below were drawn from the annual reports of Richard and Jennifer Company Richard Jennifer $86,200 Net Sales $32,600 100% 10096 Cost of Goods Sold 17.930 55% 64.650 75% Gross Prolit 14,670 4576 21.550 25% Operating Expenses 13.040 40% 18.960 12296 Net Income 1.A 59 330 Identity which company is a discounter (such as Walmart or Target and a high-end retailer such as a specialty furniture store) Explain 8. Distinguish between a single-step and a multiple step income statement 10 Contrast the accounting for Freight in versus Freight-out Please respond below una Subscribe Type here to search 3