Question
You have recently been hired as the Controller for a large publicly traded company that has experienced significant operating losses for the past few years,
You have recently been hired as the Controller for a large publicly traded company that has experienced significant operating losses for the past few years, which has caused a sharp decline in the companys stock price. The CFO has asked you to prepare a 2-3 page memo discussing the following topics: 1) The company is anticipating purchases of significant property and equipment during the next 12 months. What are your considerations and recommendations on whether to use either straight-line depreciation method or the double-declining-balance depreciation method? 2) What are your considerations and recommendation on whether to use either the LIFO or FIFO method for costing its inventory? 3) Currently, management focuses solely on gross profit in dollars rather than the gross profit margin percentage. Which is the more useful metric and what factors most influence gross profit margin? Name two specific ways to improve the gross profit margin. 4) Currently, the company records all contingent liabilities regardless of the facts and circumstances of each situation. Explain whether this is appropriate, how should contingent liabilities be recorded, and how could a company manipulate contingent liabilities to its advantage?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started