ACC 102 Accounting principles Assignment

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ACC 102 Accounting principles - Emirates College of Technology

Learning Outcome 1: Describe the tools of the financial statement analysis and Analyze Financial statements by using liquidity, profitability and solvency ratios.

Learning Outcome 2: Define manufacturing cost and prepare an income statement and its supported schedules for an incorporated manufacturing operation with cost distributions.

Learning Outcome 3: Compare between the variable and fixed costs and employ Cost-Volume-profit analyses for planning using different methods.

Part A: Financial Statement Analysis

Question 1:

Explain the bases of comparison for ratio analysis.

Question 2:

ABC companyspecialized in food industry has selected the following information from its most recent annual report to be the subject of an immediate press release.
• Net income this year was $4.4 million. Last year's net income had been $4.0 million.
• The current ratio has changed to 2.5 from last year's 2.
• The debt/total assets ratio has changed to 4 from last year's 3.
• The receivable turnover has changed to 7 from last year's 5 times.
• The Return on Assets has changed to 13% from last year's 14.8%.
• The company purchased2 new machines.

Required: As a financial analyst, you are required to think carefully about what information above is good news for the business and what information is bad news. Justify your answer.

Part B: Managerial Accounting

Question 3:

1-A manufacturing company makes the products it sells. Identify and define the cost elements that are involved in manufacturing a product. Once the cost elements of the products have been identified, how is the cost of goods manufactured for a period determined?

2- The following data have been provided from the Morgan Manufacturing Company for the most recent period:

Sales................................................................................	$30,000
Purchases of raw materials..............................................	$9,000
Raw materials inventory, ending.....................................	$1,050
Raw materials inventory, beginning	$1,400
Utilities on factory .............................................	$3,300
Direct labor......................................................................	$3,00
Administrative expense...................................................	$2,000
Selling expenses..............................................................	$1,200
Work in process inventory, beginning............................	$900
Salary of factory Supervisor...........................................	$4,500
Work in process inventory, ending..................................	$1,200
Finished goods inventory, beginning..............................	$1,100
Finished goods inventory, ending...................................	$1,300

Required:Calculate the cost of goods sold.

Part C: The Cost Volume Profit Analysis

Question 4:

A CVP income statement is frequently prepared for internal use by management. Describe the features of the CVP income statement that make it more useful for management decision-making than the traditional income statement that is prepared for external users.

Question 5:

XEMA Company estimates that variable costs will be 60% of sales and fixed costs will total $900,000. The selling price of the product is $5, and 500,000 units will be sold.

Instructions: Using the contribution margin:
(a) Compute the break-even point in units and dollars.
(c) Compute the margin of safety in dollars and as a ratio.
(d) Compute net income.

Attachment:- Accounting principles.rar

Reference no: EM132570265

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