Reference no: EM13906781
Matka Company began operations in 2010. At the beginning of the year, the company purchased plant assets of $450,000, with an estimated useful life of ten years and no residual value. During the year, the company had net sales of &650,000, salaries expense of
$100,000, and other expenses of $40,000, excluding depreciation. In addition, Matka Company purchased inventory as follows:
Jan 15200 units at $400 $80,000
Mar 20100 units at $40840,800
June 15400 units at $416166,400
Sep 18300 units at $412123,600
Dec9150 units at $42063,000
Total1,150 units $473,800
At the end of the year, a physical inventory disclosed 250 units still on hand. The managers of Matka Company know they have a choice of accounting methods, but they are unsure how those methods will affect net income. They have heard of the FIFO and LIFO inventory methods and the straight line and double declining balance depreciation methods.
Required
1.Prepare two income statements for Matka Company, one using the FIFO and straight line methods and the other using the LIFO and double declining balance methods. Ignore income taxes.
2.Prepare a schedule accounting for the difference in the two net income figures obtained in requirement 1
3.What effect does the choice of accounting method have on Matka's inventory turnover? What conclusions can you draw? Use the year- end balance to compute the ratio?
4.How does the choice of accounting methods affect Matka's return on assets? Assume the company's only assets are cash of $40,000, inventory, and plant assets. Use your- end balances to compute the ratios. Is your evaluation of Matka's profitability affected by the choice of accounting methods?
Employee type and the number of hours
: Write a program that calculates the salary for the employee. The hourly rate for permanent staff (P) is 200, contract staff (C) is 150 and temporary staff (T) is 100. The program accepts the employee type and the number of hours the employee work.
|
The correct balance for ending inventory
: Buffalo Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available: The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000. The net realizable..
|
Calculate the internal rate of return of the investment
: Calculate the internal rate of return of this investment, and decide whether it is worthwhile if the current market rate of interest is 11% per annum.
|
Elements of a column of a two-dimensional array
: When processing all the elements of a column of a two-dimensional array, what possible runtime error do we have do worry about that the number of column elements may not be constant across all rows.
|
Prepare two income statements for matka company
: Prepare two income statements for Matka Company
|
Direct labor cost and total manufacturing costs
: During the month of September, direct labor cost totaled $21,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during September were $103,000, the manufacturing overhead was:
|
What difference does borrowing rate make to choice of scheme
: If the borrowing rate demanded by the bank is increased to 18% and the repayment method is as in (b), what difference does this make to the choice of scheme?
|
Compute the cost that should be assigned to the inventory
: Hasham purchases inventory from overseas and incurs the following costs: the merchandise cost is $80,000, credit terms 1/10, n/30, applicable only to the $80,000; FOB shipping point freight charges are $2,500; insurance during transit is $300; and im..
|
Determine the normal stress in section bc
: The rod ABC is made of steel (E = 29 X 10^6 psi). Determine the normal stress in section BC. Determine the deflection at point B and C.
|