What is the difference between success-sharing plans and risk-sharing plans?
What will be an ideal response?
In success-sharing plans, employee base wages are constant and variable pay adds on during successful years. If the company does well, an employee receives a predetermined amount of variable pay. If the company does poorly, the employee simply forgoes any variable pay-there is no reduction in his or her base pay, though. In risk-sharing plans, base pay is reduced by some amount relative to the level that would be offered in a success-sharing plan. At-risk plans shift part of the risk of doing business from the company to the employee.
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For the return on assets pricing method, the desired rate of return on assets per unit is added to the total costs and expenses per unit to determine the selling price
Indicate whether the statement is true or false
Healthy Lawn Maintenance deems uncollectible any customer account not paid after six months. This means that every accounting period, Healthy Lawn Maintenance ascertains which accounts remained uncollected for six months, and treats these customer accounts as uncollectible by writing them off. If, during 2013, Healthy Lawn Maintenance identified accounts of specific customers totaling $20,000
with unpaid balances for six months and wrote them off, the journal entry would be as follows: a. Bad Debt Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Accounts Receivable—gross . . . . . . . . . . . . . . . . . . . . . . . . 20,000 b. Bad Debt Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,000 Accounts Receivable—specific accounts . . . . . . . . . . . . . . . . 20,000 c. Allowance for Uncollectibles . . . .. . .. . .. . .. . .. . .. . .. . .. . .. 20,000 Accounts Receivable—specific accounts . . . . . . . . . . . . . . . . 20,000 d. Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Accounts Receivable—gross . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 e. Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . .20,000 Bad Debt Expenses . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Howard has an ROI of 16% based on revenues of $400,000. The investment turnover is 2. What is the residual income if the cost of capital is 9%?
A. $36,000 B. ($4,000) C. $64,000 D. $14,000
As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $120,000, $140,000 and $150,000. 20% of each months sales are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with remaining 40% collected in the following month. What is the total cash collected (both
from accounts receivable and for cash sales) in the month of March? A) $74,800 B) $146,800 C) $102,000 D) $116,800