Which of the following does Kershner assume?
A) High revenues equate to a healthy income statement.
B) Many factors must be taken into account to calculate the income statement.
C) The company's revenue next year will be as good as this year's.
D) Operating expenses have been relatively high this year.
E) Net sales are much lower than gross sales.
Answer: A
Explanation: A) Kershner assumes from the fact of strong revenues that a good income statement will result. Kershner does not assume Choices B, D, and E—if he did, his outlook for the company would not be so optimistic. He does not mention Choice C, which in any case is not relevant to this year's income statement.
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Indicate whether the statement is true or false
Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2018. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs.The book values for both Flynn and Macek as of January 1, 2018 follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Flynn, Inc Macek
Company Book Value Fair ValueCash$900 $80 $80 Receivables 480 180 160 Inventory 660 260 300 Land 300 120 130 Buildings (net) 1,200 220 280 Equipment 360 100 75 Accounts payable 480 60 60 Long-term liabilities 1,140 340 300 Common stock 1,000 80 Additional paid-in capital 200 0 Retained earnings 1,080 480 ?What amount will be reported for consolidated inventory? A. $920,000. B. $660,000. C. $960,000. D. $620,000. E. $1,000,000.
If the balance on the bank statement does not equal the balance per the company's records, then it can be assumed that:
A) The company has no errors in its records concerning the cash account. B) The bank has made errors in preparing the bank statement. C) The company has made errors in its records concerning the cash account. D) There will be items reconciling the difference.
Which of the following is a lean initiative that is consistent with sustainability practices?
A. increase in waiting time B. less excess inventory C. increased frequency of quality inspections D. employing more quality control personnel