Question
Problem # 2 : For this question, please refer to the Dino's After School Trial Balance with ending totals for December 31, 2014 in the
Problem # 2: For this question, please refer to the Dino's After School Trial Balance with ending totals for December 31, 2014 in the table below:
Account Balance ($)
Checking 15,220
Savings 58,500
Money Market 41,650
Pre-Paid Rent 5,400
Accounts Receivable 81,000
Accounts Receivable Allowances-6,500
Machinery 122,600
Equipment 80,300
Automobiles 67,500
Accounts Payable 60,000
Loans Payable 21,300
Equity 384,370
- Using an Excel Spreadsheet, create the Balance Sheet for Dino's After School.
- Using the information obtained from your Balance Sheet, calculate any one (1) liquidity and any one (1) leverage ratio.
- Comment on the financial position of the organization, specific to the two ratios you calculated. What is the main reason that Dino's (and other organizations) need a Balance Sheet?
Problem # 3: Please refer to the corporate tax rates table and the Gross Profit Chart below:
Account Balance ($)
0 to 50,000 15%
50,000 to 75,000 $7,500 + 25% of the amount over 50,000
75,000 to 100,000 $13,750 + 34% of the amount over 75,000
100,000 to 335,000 $22,250 + 39% of the amount over 100,000
335,000 to 10,000,000 $113,900 + 34% of the amount over 335,000
10,000,000 to 15,000,000 $3,400,000 + 35% of the amount over 10,000,000
15,000,000 to 18,333,333 $5,150,000 + 38% of the amount over 15,000,000
18,333,333 and up 35%
Fiscal Year Gross Profit ($)
June, 2009 - May, 2010 261,100
June, 2011 - May, 2012 277,500
June, 2012 - May, 2013 292,000
June, 2013 - May, 2014 300,900
- Given the information provided here perform your own calculations to show the amount of corporate tax paid for each of the four (4) fiscal years covered in the table above.
- Is there a pattern? Explain the pattern and what it may suggest about the future performance of the organization. How can this conclusion advise investors and organizational decision makers?
- If there was a 20% reduction in the Gross Profit for fiscal year 6/12 - 5/13, how might this have changed the gross profit expectations for the 6/13 - 5/14 fiscal year? Provide rationale.
- Calculate the total expected taxes that would have been paid for these two fiscal years, with the 20% reduction in 6/12 - 5/13 and the resultant expected change in the 6/13 - 5/14 gross profit.
Problem # 4: Explain the concept of departmentalized accounting and the importance of collaboration between departments within an organization, to its success. You may use organizational examples.
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