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Oduvanchick [21]
2 years ago
10

South Beach Insurance is about to begin using a program that will change the way its adjusters settle insurance claims. Adjuster

s will be able to complete an adjustment and issue a check right at the scene of the accident. Although employees are uncertain that the new system will work, other insurance agencies have been successful with this approach. At South Beach Insurance, the new program represents ________ change.
Business
1 answer:
klasskru [66]2 years ago
4 0

Answer:

The correct answer is letter "A": innovative.

Explanation:

Innovative changes allow companies to use new strategies and technologies to improve the efficiency of their operations. Sometimes those changes are processes or technological devices created by the company itself while in other cases they are adopted from other entities with similar approaches and accomplish almost the same goal.

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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A
melomori [17]

Answer:

1. ROI for each division:

                                                   Division A       Division B       Division C

Return on investment (DuPont) =       23%                   7%                 11.6%

2. Residual income (loss)           $469,500      ($106,950)        $0

3. Divisions A and C will probably accept the opportunity while Division B will reject it.

Explanation:

a) Data and Calculations:

                                                   Division A       Division B       Division C

Sales                                       $ 15,650,000  $ 35,650,000  $ 20,520,000

Average operating assets       $ 3,130,000      $ 7,130,000     $ 5,130,000

Net operating income                 $ 719,900        $ 499,100        $ 595,080

Minimum required rate of return     8.00 %             8.50 %              11.60 %

Return on investment (ROI) (ordinary) 23%                   7%                 11.6%

ROI = Net operating income/Average operating assets * 100

Return on investment (DuPont ROI) :

Asset Turnover =                                   5                     5                      4

Sales/Average operating assets

Operating income margin =

Income/Sales * 100                             4.6%                 1.4%                  2.9%

Return on investment (DuPont) =       23%                   7%                 11.6%

Asset Turnover * Operating income margin

Residual income =  

Net income - (Equity * RRR)             $469,500      ($106,950)     $0

NB: Equity is approximated to the net operating asset here.

7 0
1 year ago
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the fol
zhuklara [117]

Answer:

GOLDEN EAGLE COMPANY

Adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31.

Debit Supplies Expense $2,050

Credit Supplies $2,050

Debit Insurance Expense $1,050

Credit Prepaid Insurance $1,050

Debit Salaries Expense $14,100

Credit Salaries Payable $14,100

Debit Unearned Revenue $1,500

Credit Rent Revenue $1,500

Explanation:

a) Data and Calculations:

Golden Eagle Company

November 30 adjusted trial balance

                                         30-Nov              31-Dec

                                   Debit    Credit    Debit    Credit

Supplies                   $2,000             $2,550

Prepaid Insurance   $8,000             $6,950

Salaries payable                  $11,000              $16,000

Unearned revenue              $3,000                $1,500

Supplies:

Nov. 30 balance  $2,000

Purchase               2,600

Supplies expense 2,050

Balance               $2,550

Prepaid Insurance:

Nov. 30 balance $8,000

Insurance exp.      1,050

Dec. 31 balance $6,950

Salaries Payable:

Nov. 30 balance $11,000

Salaries expense 14,100

Cash paid              9,100

Dec. 31 balance  16,000

Unearned Revenue:

Nov. 30 balance $3,000

Rent Revenue    $1,500

Dec. 31 balance    1,500

3 0
2 years ago
Which of the following statements is correct? a. Changes in accounting principle are always handled in the current or prospectiv
makkiz [27]

Answer:

C. A change from expensing certain costs to capitalizing these costs due to a change in the period benefited, should be handled as a change in accounting estimate.

Explanation:

The statement above describes or the other hand talks about expenditure and capitalization.

Therefore, expenditure is explained as either capitalized as a cost of the asset on the company’s balance sheet or it is expensed in the income statement of the incurred period.

Under IFRS, the following rules govern the categorization of the expenditure as an asset:

If the expenditure is expected to give economic benefits in future over several accounting periods.

If one can measure the cost reliably. Also, increases the assets on the company’s balance sheet.

Recorded on the cash flow statement as a cash outflow for investing.

8 0
1 year ago
Last year Lowell Inc. had a total assets turnover of 1.40 and an equity multiplier of 1.75. Its sales were $295,000 and its net
katrin [286]

Answer:

ROE would have changed by 8.52%

Explanation:

First we calculate the current ROE using Dupont Equation which gives ROE as,

ROE = Net Income/Sales * Sales/Total Assets * Total Assets/Equity

or

ROE = Net Profit Margin * Total Assets Turnover * Equity Multiplier

  • Current ROE = 10600/295000 * 1.4 * 1.75 = 0.0880 or 8.8%

The condition says that the net income could have increased to 20850 but other factors will remain constant. Thus, to calculate new ROE, we will calculate the new Net Profit margin but the total assets turnover and the equity multiplier will remain constant as sales assets and capital structure is not changing.

  • New ROE = 20850/295000 * 1.4 * 1.75 = 0.17316 or 17.32%
  • The ROE would have changed by 17.32 - 8.80 = 8.52%
7 0
1 year ago
Assume that you are the president of Highlight Construction Company. At the end of the first year (December 31, 2014) of operati
Maksim231197 [3]

Answer:

Highland construction company

Income statement

For the year ended December 31, 2014

Sales revenue=128,400

Total expense=80,200

Pretax income=48,200

Tax                  =14,460

Net income     =33,740

Highland construction company

Statement of stockholder's equity

For the year ended December 31,2014

Balance December 31,2013=0

Stock issuance                    =87,000

Add:Net income

Less:Dividends

Balance December 31,2014=87,000

Highland construction company

Balance sheet

December 31,2014

Account payable=46,140

Salaries payable=2,520

Total liabilities

Common stock=87,000

Retained earnings=23,740

As complete information is not given so only relevant portion is done.

4 0
2 years ago
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