{"id":21017,"date":"2021-12-07T16:46:36","date_gmt":"2021-12-07T16:46:36","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/14a-the-verifine-department-stores-inc\/"},"modified":"2021-12-07T16:46:36","modified_gmt":"2021-12-07T16:46:36","slug":"14a-the-verifine-department-stores-inc","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/14a-the-verifine-department-stores-inc\/","title":{"rendered":"14a. the verifine department stores inc.,"},"content":{"rendered":"
\n

14a<\/strong>.\u00a0 The Verifine Department Stores Inc., chief executive officer (CEO) has asked you to compare the company\u2019s profit performance and financial position with the average for the industry.\u00a0 The CEO has given you the company\u2019s income statement and balance sheet as well as the industries average data for retailers.<\/p>\n

\u00a0<\/p>\n

Provided information<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Verifine Department Stores, Inc.<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n

Income Statement Compared with Industry Average<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n

Year Ended December 31, 2010<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Industry<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Verifine<\/span><\/p>\n<\/td>\n

\n

Average<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Net sales<\/span><\/p>\n<\/td>\n

\n

$780,000<\/span><\/p>\n<\/td>\n

\n

100.0 %<\/span><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\u00a0<\/td>\n\n

Cost of goods sold<\/span><\/p>\n<\/td>\n

\n

525,720<\/span><\/p>\n<\/td>\n

\n

65.8 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Gross profit<\/span><\/p>\n<\/td>\n

\n

254,280<\/span><\/p>\n<\/td>\n

\n

34.2 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Operating expenses<\/span><\/p>\n<\/td>\n

\n

162,240<\/span><\/p>\n<\/td>\n

\n

19.7 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Operating income<\/span><\/p>\n<\/td>\n

\n

92,040<\/span><\/p>\n<\/td>\n

\n

14.5 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Other expenses<\/span><\/p>\n<\/td>\n

\n

4,680<\/span><\/p>\n<\/td>\n

\n

0.4 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Net income<\/span><\/p>\n<\/td>\n

\n

$87,360<\/span><\/p>\n<\/td>\n

\n

14.1 %<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Verifine Department Stores, Inc.<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n

Balance Sheet Compared with Industry Average<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n

December 31, 2010<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Industry<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Verifine<\/span><\/p>\n<\/td>\n

\n

Average<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Current assets<\/span><\/p>\n<\/td>\n

\n

$311,880<\/span><\/p>\n<\/td>\n

\n

70.9 %<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Fixed assets, net<\/span><\/p>\n<\/td>\n

\n

115,920<\/span><\/p>\n<\/td>\n

\n

23.6 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Intangible assets, net<\/span><\/p>\n<\/td>\n

\n

9,660<\/span><\/p>\n<\/td>\n

\n

0.8 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Other assets<\/span><\/p>\n<\/td>\n

\n

22,540<\/span><\/p>\n<\/td>\n

\n

4.7 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Total assets<\/span><\/p>\n<\/td>\n

\n

$460,000<\/span><\/p>\n<\/td>\n

\n

100.0 %<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Current liabilities<\/span><\/p>\n<\/td>\n

\n

$215,280<\/span><\/p>\n<\/td>\n

\n

48.1 %<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Long\u2212term liabilities<\/span><\/p>\n<\/td>\n

\n

105,800<\/span><\/p>\n<\/td>\n

\n

16.6 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Stockholders’ equity<\/span><\/p>\n<\/td>\n

\n

138,920<\/span><\/p>\n<\/td>\n

\n

35.3 <\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\n

Total liabilities and stockholders’ equity<\/span><\/p>\n<\/td>\n

\n

$460,000<\/span><\/p>\n<\/td>\n

\n

100.0 %<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

Requirements<\/span><\/strong><\/p>\n

\u00a0<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Prepare a common-size income statement and balance sheet for Verifine.\u00a0 The first column of each statement should present Verifine\u2019s common-size statement, and the second column, the industry averages.<\/p>\n

\u00a0<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>For the profitability analysis, compute Verifine\u2019s (a) ratio of gross profit to net sales, (b) ratio of operating income to net sales, and (c) ratio of net income to net sales. Compare these figures with the industry averages. Is Verifine\u2019s profit performance better or worse than the industry average?<\/p>\n

\u00a0<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>For the analysis of financial position, compute Verifine\u2019s (a) ratio of current assets to total assets and (b) ratio of stockholders\u2019 equity to total assets.\u00a0 Compare these ratios with the industry averages.\u00a0 Is Verifine\u2019s financial position better or worse than the industry averages?<\/p>\n

\u00a0<\/p>\n

14b.<\/strong>)\u00a0 Financial Statement Data of Modern Traveler Magazine include the following items (dollars in thousands)<\/p>\n

\u00a0<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Cash<\/span><\/p>\n<\/td>\n

\n

$18,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Accounts receivable, net<\/span><\/p>\n<\/td>\n

\n

$81,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Inventories<\/span><\/p>\n<\/td>\n

\n

$183,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Total assets<\/span><\/p>\n<\/td>\n

\n

$635,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Short\u2212term notes payable<\/span><\/p>\n<\/td>\n

\n

$45,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Accounts payable<\/span><\/p>\n<\/td>\n

\n

$104,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Accrued liabilities<\/span><\/p>\n<\/td>\n

\n

$38,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Long\u2212term liabilities<\/span><\/p>\n<\/td>\n

\n

$223,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Net income<\/span><\/p>\n<\/td>\n

\n

$70,000<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Common shares outstanding<\/span><\/p>\n<\/td>\n

\n

60,000<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

Requirements<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Compute Modern Travelers current ratio, debt ratio and earnings per share. Round all ratios to 2 decimal places.<\/p>\n

\u00a0<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Compute the 3 ratios after evaluating the effect of each transaction as follows. Consider each transaction separately.<\/p>\n

\u00a0<\/p>\n

a.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Purchased inventory of $44,000 on account.<\/p>\n

b.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Borrowed $124,000 on a long-term note payable.<\/p>\n

c.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Issued 6,000 shares of common stock, receiving cash of $108,000.<\/p>\n

d.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Received cash on account $4,000.<\/p>\n

\u00a0<\/p>\n

16a<\/strong>) Hummingbird design Inc. is a website design and consulting firm.\u00a0 The firm uses a job order costing system, in which each client is a different job.\u00a0 Hummingbird design traces direct labor, licensing costs, and travel costs directly to each job.\u00a0 It allocates indirect costs to jobs based on predetermined indirect cost allocation rate, computed as a percentage of direct labor costs.<\/p>\n

\u00a0<\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

Information Given <\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n\n\n\n\n\n\n\n\n
\n

Direct labor hours (professional)<\/span><\/p>\n<\/td>\n

\n

7,500hrs<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Direct labor costs (professional)<\/span><\/p>\n<\/td>\n

\n

$1,500,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

Support staff salaries<\/span><\/p>\n<\/td>\n

\n

180,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

Computer leases<\/span><\/p>\n<\/td>\n

\n

46,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

Office supplies<\/span><\/p>\n<\/td>\n

\n

24,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

Office rent<\/span><\/p>\n<\/td>\n

\n

65,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Maynard<\/span><\/strong><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\n

Delightful Dining<\/span><\/strong><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

Chocolates<\/span><\/strong><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

Direct labor hours<\/span><\/p>\n<\/td>\n

\n

730 hours<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

30 hours<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Software licensing costs<\/span><\/p>\n<\/td>\n

\n

$2,100<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

$300<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

Travel costs<\/span><\/p>\n<\/td>\n

\n

11,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

\u2014<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

Requirements<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Compute Hummingbird Design\u2019s predetermined indirect cost allocation rate for 2011.<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Compute the total cost of each job.<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>If Jacquin wants to earn profits equal to 20% of service revenue, how much (what fee) should it charge each of these 2 clients?<\/p>\n

4.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Why does Hummingbird design assign costs to jobs?<\/p>\n

\u00a0<\/p>\n

16b)<\/strong>Sloan manufacturing makes carrying cases for portable devices.\u00a0 It\u2019s costing records yield the following information.<\/p>\n

\u00a0<\/p>\n

Information provided<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Total<\/span><\/strong><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n

Total<\/span><\/strong><\/p>\n<\/td>\n

\n

Manufacturing<\/span><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Job<\/span><\/strong><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

Date<\/span><\/strong><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

Cost of Job<\/span><\/strong><\/p>\n<\/td>\n

\n

Costs Added<\/span><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

No.<\/span><\/strong><\/p>\n<\/td>\n

\n

Started<\/span><\/strong><\/p>\n<\/td>\n

\n

Finished<\/span><\/strong><\/p>\n<\/td>\n

\n

Sold<\/span><\/strong><\/p>\n<\/td>\n

\n

at November 30<\/span><\/strong><\/p>\n<\/td>\n

\n

in December<\/span><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1<\/span><\/p>\n<\/td>\n

\n

11\/3<\/span><\/p>\n<\/td>\n

\n

11\/12<\/span><\/p>\n<\/td>\n

\n

11\/13<\/span><\/p>\n<\/td>\n

\n

$1,100<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

2<\/span><\/p>\n<\/td>\n

\n

11\/3<\/span><\/p>\n<\/td>\n

\n

11\/30<\/span><\/p>\n<\/td>\n

\n

12\/1<\/span><\/p>\n<\/td>\n

\n

2,000<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n<\/tr>\n
\n

3<\/span><\/p>\n<\/td>\n

\n

11\/17<\/span><\/p>\n<\/td>\n

\n

12\/24<\/span><\/p>\n<\/td>\n

\n

12\/27<\/span><\/p>\n<\/td>\n

\n

300<\/span><\/p>\n<\/td>\n

\n

$1,300<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

4<\/span><\/p>\n<\/td>\n

\n

11\/29<\/span><\/p>\n<\/td>\n

\n

12\/29<\/span><\/p>\n<\/td>\n

\n

1\/3<\/span><\/p>\n<\/td>\n

\n

800<\/span><\/p>\n<\/td>\n

\n

1,300<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

5<\/span><\/p>\n<\/td>\n

\n

12\/8<\/span><\/p>\n<\/td>\n

\n

12\/12<\/span><\/p>\n<\/td>\n

\n

12\/14<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

650<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

6<\/span><\/p>\n<\/td>\n

\n

12\/23<\/span><\/p>\n<\/td>\n

\n

1\/6<\/span><\/p>\n<\/td>\n

\n

1\/9<\/span><\/p>\n<\/td>\n

\u00a0<\/td>\n\n

100<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

Requirements<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Which type of costing system is Sloan using? What piece of data did you base your answer on?<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Using the dates provided to identify the status of each job, compute Sloans account balances at November 30 for work in process inventory, finished inventory and costs of goods sold. Compute account balances at December 31 for work in process inventory and cost of goods sold.<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Record summary journal entries for the transfer of completed units from work in process to finished goods for November and December.<\/p>\n

4.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Record the sale of Job 3 for $1900.<\/p>\n

\u00a0<\/p>\n

5.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>What is the gross profit for Job 3? What other cost\u2019s must this gross profit cover?<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

14a.\u00a0 The Verifine Department Stores Inc., chief executive officer (CEO) has asked you to compare the company\u2019s profit performance and financial position with the average for the industry.\u00a0 The CEO has given you the company\u2019s income statement and balance sheet as well as the industries average data for retailers. \u00a0 Provided information \u00a0 Verifine Department […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-21017","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/21017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=21017"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/21017\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=21017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=21017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=21017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}