Birch Manufacturers has provided the following information regarding the two products that it​ sells: Jet Boats Ski Boats Sales price per unit $ 8 comma 000 $ 24 comma 000 Variable cost per unit $ 6 comma 000 $ 16 comma 000 Annual fixed costs are $ 300 comma 000. How many units must be sold in order for Birch to break​ even, assuming that Birch sells five jet boats for every two ski boats​ sold? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ unit.) A. 58 jet boats and 23 ski boats B. 12 jet boats and 7 ski boats C. 23 jet boats and 58 ski boats D. 7 jet boats and 12 ski boats

Answers

Answer 1

Answer:

A. 58 jet boats and 23 ski boats

Explanation:

Break even point is the level of activity at which a firm neither makes a profit nor a loss.

First determine the sales mix :

Note : Birch sells five jet boats for every two ski boats​ sold

thus the mix is 5:2

Then calculate the contribution per batch

Jet Boats = $8,000 - $6,000 =$2,000

Ski Boats = $24,000 - $ 16,000 = $8,000

Total Contribution per batch = ((5×$2,000) + (2 ×$8,000))

                                               = $ 26,000

Calculate the batch contribution

Break - even Point = Fixed Cost / Contribution per batch

                             = $300,000 /  ((5×$2,000) + (2 ×$8,000))

                             = $300,000 / $ 26,000

                             = 11.54

Use the sales mix to determine the units to break even in the batch

Jet Boats = 11.54 × 5

                = 57,7

                = 58

Ski Boats = 11.54 × 2

                = 23,08

                = 23

Thus the units sold to break even would be : 58 jet boats and 23 ski boats


Related Questions

is the creation of real or perceived differences in goods or services.

Answers

I would say in (goods) I may be wrong but correct me plz!

Answer:product differentiation

Explanation:

Small businesses are more nimble than corporations. this allows them to operate on a flatter organization chart. what is an advantage to this structure?
A. Fluctuation is less likely.
B. Response to customer demands is faster.
C. Fewer employees requires fewer communication skills.

Answers


Brainliest?
Answer: B. Response to customer demands is faster.

Explanation: The advantage of a flatter organization chart in small businesses is that decision-making and communication lines are shorter, which enables the company to be more agile and respond more quickly to customer demands. With fewer layers of management, small businesses can make decisions faster, implement changes more quickly, and be more flexible in their operations. This is especially important in today's fast-paced business environment, where companies need to be able to adapt to changing market conditions and customer needs in order to stay competitive.

what is Amazon's current price-to-book value?

Answers

Answer:

The current price to book value of Amazon as on date (25 February 2021) is 16.48

Explanation:

The current price to book value of Amazon as on date (25 February 2021) is 16.48

However, on 24th February 2021, the price to book value of Amazon  was 17.03

You're working with an experienced associate he insists on doing the task a certain way but you know there's a more efficient approach what would you be most and least likely to do?

Answers

Answer:

Explanation:

just do your work and find a easer way to do it

A person working with an established associate who insists on executing the task a certain way must exercise workplace etiquette.

What is experienced?

The term experience refer to learn the things and the knowledge. The experience are the necessary to the human life. The experience are the help in the future challenges. The experience are the built-in the human nature are the day to day. The experience is to learn bad and the good things.

A person like comrade's method of completing the task, recognizing that it is much different from an experienced associate. Depending on this intro, one may inform an experienced associate comrade about the more efficient strategy and offer her time and opportunity to examine it. Users will not lose your workplace etiquette. She will not be embarrassed by person reprimand.

As a result, person working with an experienced associate he insists on doing the task a certain way approach is to practice workplace etiquette is the necessary.

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Question 3
Signs of a serious gambling problem include all EXCEPT:
OA. Having a budget for gam bling.
OB. Using a credit card to gamble.
OC. Bragging about gambling wins.
OD. All are signs of a serious gambling problem.

Answers

Answer:

OD All are signs of a serious gambling problem.

Joe is 30 years old, married, and his wife is expecting their first baby. Joe makes $48,000 per year and has $200 budgeted per month to spend on life insurance. He has started looking at his options and has three choices:

Answers

Note that ultimately, Joe will need to decide which Insurance cover option best fits his needs and budget.

What is the explanation for the above response?

Based on the options provided, Joe has three choices for life insurance:

BAD - Whole Life: $250,000 coverage for $200/month premium. This option includes an investment component.

BETTER - 20-Year Term: $250,000 coverage for $13/month premium or $187/month premium for $500,000 coverage. This option does not include an investment component.

BEST - 20-Year Term: $500,000 coverage for $20/month premium. This option does not include an investment component.

Joe will need to weigh the cost of the premiums against the amount of coverage he needs to provide for his growing family.

Whole life insurance provides coverage for life and includes an investment component, but it is typically more expensive than term life insurance.

Term life insurance provides coverage for a specific period and is less expensive, but it does not include an investment component. Ultimately, Joe will need to decide which option best fits his needs and budget.

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Full Question:

Although part of your question is missing, you might be referring to this full question:

Joe is 30 years old, married, and his wife is expecting their first baby. Joe makes $48,000 per year and has $200 budgeted per month to spend on life insurance. He has started looking at his options and has three choices:

BAD - Whole Life: $250,000 coverage for $200/month premium. This option includes an investment component.

BETTER - 20-Year Term: $250,000 coverage for $13/month premium or $187/month premium for $500,000 coverage. This option does not include an investment component.

BEST - 20-Year Term: $500,000 coverage for $20/month premium. This option does not include an investment component.

Your restaurant revenue is $710,000, expenses total $890,000, and your total invest is $3 million what is your return investment?

Answers

Answer:

Return on investment = -6%

Explanation:

Given:

Gross revenue of restaurant = $710,000

Total expenses of restaurant = $890,000

Total investment = $3,000,000

Find:

Return on investment

Computation:

Net profit = $710,000 - $890,000

⇒ Net profit = -$180,000

Return on investment = [Net profit / Total investment]100

⇒ Return on investment = [-180,000 / 3,000,000]100

⇒ Return on investment = [-0.06]100

Return on investment = -6%

Can someone explain this to me?

Since inflation is already factored into the data, what is the most likely reason that the costs of a doctorate degree rise to such a high level?

Can someone explain this to me? Since inflation is already factored into the data, what is the most likely

Answers

The rate at which prices increase over a specific time period is known as inflation.

What is the meaning of Inflation?

Inflation is often measured in broad terms, such as the general rise in prices or the rise in a nation's cost of living.

Although low inflation might be detrimental, both levels can hurt the economy. The Fed will adopt the opposite strategy when the economy is having trouble or inflation is too low by cutting interest rates or purchasing assets to boost cash flow.

The main cost of inflation is the erosion of real income, which occurs when prices rise unevenly and cause some customers' purchasing power to decline. For both those who receive and pay fixed interest rates, inflation might over time affect their ability to make purchases.

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Traditional marketing revolves around the 4 Ps:

Answers

Traditional marketing revolves around the 4 Ps, which are Product, Price, Place, and Promotion.

These elements form the foundation of a marketing strategy for businesses.

Product: Refers to the goods or services that a company offers to its customers. It involves defining the features, design, and quality of the product.

Price: Involves determining the cost of the product or service and finding the right pricing strategy that aligns with customer expectations and market conditions.

Place: Focuses on selecting the distribution channels and locations where the product will be available for customers to purchase. It includes decisions related to retail outlets, online platforms, or direct sales.

Promotion: Involves the activities undertaken to promote and create awareness about the product. It includes advertising, public relations, sales promotions, and other marketing communication strategies.

These 4 Ps provide a framework for businesses to analyze and optimize their marketing efforts to meet customer needs, increase sales, and achieve overall business objectives.

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What do most companies do when they look to provide an offering to global markets?
Your
1) inform their competitors of their move to a global market
You do
2) send a memo to their internal employees
one op
3) adjust the offering to meet the needs of various other buyers around the globe
4) hold a press conference to answer media questions about selling the offering globally.

Answers

I’m confident it’s 4 because a press conference can help marketing teams gather information on how to best globally sell a product/service. I’d be the best move for a product in this situation.

Making an adjustment to the offerings to meet the needs of various other buyers around the globe is done by most of the companies when they look to provide an offering to global markets. Therefore, the option 3 holds true.

What is the significance of global markets?

Global markets can be referred to or considered as the relevant market for a business organization or a firm that deals in products or services such that their consumption is at a global level, and two or more countries or continents at large.

When companies require access to the global markets for expansion, they have to keep in mind the needs and demands of different kinds of buyers around the globe too, so that they have an opportunity to attract customers around the globe.

Therefore, the option 3 holds true and states regarding the significance of global markets.

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a teammate tells you that you tend to take over shared projects. you've gotten this feedback from other too. what should you say? A I wish you would have mentioned this during projects. please be sure to do so on the next one. B I'm sorry you're feeling left out, I'll be sure to give you more to do on the next one. C I'm sorry maybe we can work together to divide our responsibility on the next one. D I've gotten this feedback before, I just like things done a certain way. E I'm used to leading projects, so I usually just take over without even realizing it​

Answers

Answer:

C

Explanation:

even if it's unintentional we should apologize professionally

List five franchise dominated companies that have disappeared completely in the last twenty years and explain why they failed.

Answers

The five franchise dominated companies that have disappeared completely in the last twenty years are:

Wow Air Henri BendelCharming CharliePayless Alta Motors

What was the reason they failed?

Wow Air is know to be an Airline that gives cheap flights but they had issues with regards to profitability and the rising cost of buying fuel and other minor factors that made them to shut down operations.

Henri Bendel is known to be one that closed its business in 2019 sue to decline in sales as well as lack of customer interest.

Charming Charlie was known for its accessories  and was said to have went bankrupt in 2019. In 2017 due to consistent reduction of physical consumer traffic.

Payless footwear chain closed its business in 2017 and filed for bankruptcy and this is been market been taken over by competition.

Alta Motors, which was an electric motorcycle maker was unable to  raise fund from investors and thus had to fold up.

Therefore, The five franchise dominated companies that have disappeared completely in the last twenty years are:

Wow Air Henri BendelCharming CharliePayless Alta Motors

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Draco, Inc. has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow.

Answers

Answer:

he alloy produced more waste than normal, as evidenced by a direct-material quantity variance of $2,000U, and was also difficult to use. This slowed worker ...

1 answer

·

Top answer:

Favorable Direct-material price variance 9500 F Les...

Explanation:

ECONOMICS
Data collected from the economy of Cardtown reveals that a 16% increase in income leads to the following changes:
• A 12% increase in the quantity of flops demanded
• A 14% decrease in the quantity of clubs demanded
• A 28% increase in the quantity of houses demanded
Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on its income elasticity, indicate whether each good is a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign confers important information.)

ECONOMICS Data collected from the economy of Cardtown reveals that a 16% increase in income leads to

Answers

The demand elasticity is recognise the value which measures the change in the quantity requested whenever the income changes inside a given percentage. Its formula is em = change in percent in M by Q/percent, and the further calculation can be defined as follows:

\(\to em (flops) = \frac{+12\% }{+16\%} = +0.75\) Because em is +, flops are a regular good.

\(\to em (clubs) = \frac{-14\%}{+16\%} = -0.875\ \ or \ -0.88\) Because em is -, clubs are good less.

\(\to em (aces) = \frac{+28\%}{+16\%} = +1.75\) Aces are a normal good since em is +.

The elasticity of luxury goods exceeds that and that's why ACES are luxury goods.

Therefore, the final answer is "Hence".

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Most of the assets were bought a long
time ago and would worth much more
than the books show today.

What is the accounting principle?

Answers

Answer:

Historical cost principle

Explanation:

Assets must be recorded at cost value, not market value. When you record an asset, you cannot change its value every period, you have to keep using the historical value. This is why we use a separate account to record accumulated depreciation of assets, so that the purchase cost is always constant, but the net carrying value will vary depending on depreciation expense.

Market value changes and can be very volatile. Imagine a house, whose initial value was $300,000, then it increased to $500,000 but the market went down and its value was $350,000. It would be a mess to change the value and pay capital gains taxes, or then report a loss.

BRAINLY FOR THE BEST ANSWER AND 55 POINTS FOR WHOEVER THAT ANSWER!!
Explain and define what is:
1) Gross profit margin
2) Net profit margin

(IF NOT WELL ANSWERED I WILL REPORT YOUR ANSWER IF MY POINTS ARE MIS-USED

Answers

•→ Gross Profit Margin •→

# Gross margin is the difference between revenue and cost of goods sold (COGS), divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold (e. g. production or acquisition costs, not including indirect fixed costs like office expenses, rent, or administrative costs), then divided by the same selling price. "Gross margin" is often used interchangeably with "gross profit", however the terms are different: "gross profit" is technically an absolute monetary amount and "gross margin" is technically a percentage or ratio.

•→ Net Profit Margin •→

# The net profit margin, or simply net margin, measures how much net income or profit is generated as a percentage of revenue. It is the ratio of net profits to revenues for a company or business segment. Net profit margin is typically expressed as a percentage but can also be represented in decimal form.

I Hope This Helps You...

price elasticity of demand for electricity​

Answers

The price elasticity of demand for electricity reflects the sensitivity of electricity consumption to price changes.

The price elasticity of demand for electricity is a measure of the responsiveness of electricity consumption to changes in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

Understanding the price elasticity of demand for electricity is important for policymakers, electricity providers, and regulators in making informed decisions.

In the short run, the price elasticity of demand for electricity tends to be relatively low or inelastic. This means that changes in the price of electricity have a relatively small effect on the quantity demanded.

Electricity is considered a necessary and essential good for many households and businesses, and there are limited substitutes available in the short run.

In the long run, the price elasticity of demand for electricity becomes more elastic. Consumers and businesses have more flexibility to respond to price changes by adjusting their behavior, investing in energy-efficient technologies, or switching to alternative energy sources.

The availability of substitutes and technological advancements play a significant role in increasing the elasticity of demand over time.

It is important to note that the price elasticity of demand for electricity can vary across different consumer segments and regions. Industrial and commercial consumers often have more options to adjust their electricity consumption patterns and tend to have a higher elasticity of demand.

Residential consumers, on the other hand, may have fewer alternatives and exhibit a lower elasticity of demand.

It helps policymakers and stakeholders anticipate the impact of price fluctuations and design effective policies related to pricing structures, subsidies, energy efficiency programs, and the promotion of renewable energy sources.

Understanding the price elasticity of demand for electricity is crucial for balancing economic, environmental, and social goals in the energy sector.

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identify an advantage of having strategic plans made by a firm at all levels.

Answers

The business environment, the state of the economy, market potential, and competitor behavior are all taken into account by strategic plans.

What is in a strategic plan for firm planning?

Taking into account both internal and external variables, a strategic plan evaluates the business's existing environment. Long-term objectives and targets are listed, along with the plans that will be used to attain them, in the paper. Or to put it another way, a business plan details a specific new project or an established business.

In strategic management, how does the corporate environment appear?

It is speaking of the commercial setting. "The totality of all the forces, factors, and institutions that are external to and beyond the control of a particular corporate organization but that have a significant influence on the operation and development of such firms."

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not sure if this information helps or not. I only need help with figuring out the amount for line 16 on 2021 tax form 1040. Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth was born on July 4, 1975, and her Social Security number is 123-45-6785. She did not engage in any virtual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund. Beth received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored. The following information is shown on Beth's Wage and Tax Statement (Form W-2) for 2021. Line Description Amount 1 Wages, tips, other compensation $65,000.00 2 Federal income tax withheld 9,500.00 3 Social Security wages 65,000.00 4 Social Security tax withheld 4,030.00 5 Medicare wages and tips 65,000.00 6 Medicare tax withheld 942.50 15 State Arizona 16 State wages, tips, etc. 65,000.00 17 State income tax withheld 1,954.00 During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099-INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099-DIV. Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2021. On her 2020 Federal income tax return, she used the standard deduction. Fees earned from her part-time tax practice in 2021 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service. On February 8, 2021, Beth bought 500 shares of Gray Corporation common stock for $17

Answers

Here is the amount for line 16 on 2021 tax form 1040 for Beth R. Jordan: $1,292.50

Here is the calculation:

To calculate your overall earnings, you can subtract the state income tax withheld and add the state income tax refund and net self-employment income, while also taking into account any self-employment expenses.

These figures can be found on lines 2 and 17 of your W-2 form, and lines 3 and 27 of your Schedule C, respectively.

The precise figures of these items are given below:

Federal income tax withheld: $9,500

State income tax withheld: $1,954

State income tax refund: $1,100

Net self-employment income: $3,800

Net expenses from self-employment: $600

Plugging these values into the calculation above, we get:

$9,500 - $1,954 + $1,100 + $3,800 - $600 = $1,292.50

Therefore, the amount for line 16 on 2021 tax form 1040 for Beth R. Jordan is $1,292.50.

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+ 2(x – 3) – 5x Which expression is equivalent to the expression shown? –3x – 4 –3x – 1 –x – 12 –x – 3

Answers

According to the information, we can infer that the expression equivalent to 2(x – 3) – 5x is -3x - 12.

Which expression is equivalent to the expression shown?

According to the information, we can infer that none of the options is correct. In this case to calculate the correct expression equivalent to the expression shown we have to simplify the given expression, we apply the distributive property by multiplying 2 with the terms inside the parentheses:

2(x – 3) = 2x – 6.

Additionally, we subtract 5x:

2x – 6 – 5x = -3x – 6.

According to the above, the expression -3x - 12 is equivalent to 2(x – 3) – 5x.

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In which type of analysis are corporate goals and plans compared with the existing manpower inventory to determine the training needs?
a. Organization analysis
b. Operation analysis
c. Individual analysis
d. None of the above​​​​​​

Answers

Answer:

a. Organization analysis

need help in these question​

need help in these question

Answers

Answer:

one sec i can help

Explanation:

Andrea Mitchell has joined a real estate syndicate. The syndicate she belongs to was formed by one individual who sold participation units to Andrea and several others. The individual who sold the participation units has unlimited liability and manages the property. Andrea and the others can only lose their initial investment. What type of real estate syndicate has Andrea joined

Answers

Answer: Limited partnership

Explanation:

Syndication allows for people to afford real estate investments they would be unable to on their own because they are able to pool their recourses together  thereby increasing the collective investment amount they have.

This is a Limited Liability partnership syndicate because in such a syndicate, there are two types of the partners: the General partner and the Limited partner. The General partner manages the property and has unlimited liability while the limited partners like Andrea Mitchell can only lose what they initially put in.  

what is the square root of 19995

Answers

19995 has a square root of around 141.429.

There are two square root for every positive integer x: a positive square root sqrt and a negative square root sqrt. By expressing the sign as display style pm sqrt x, the two roots may be conveyed more concisely. Even though the major square root is only one of a positive number's around two square roots, the phrase "the square root" is occasionally used to refer to it.

The context of complex numbers can be used to analyze square roots of negative numbers. More broadly, square roots can be taken into account in any situation where the concept of an object's "square" is established. Among other mathematical structures, these include square matrices and function spaces.

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Market research can help you strategize your _______ and _______ goals.

Primary research is more _______ than secondary research.

Your first marketing priority is to find out if you can _______ your product or services.

The grouping of people for marketing purposes is called _______.

Once you find out what people want, there’s a need to know the _______ for their choices.

Answers

Market research can help you strategize your business and marketing goals.

Primary research is more specific and tailored to your specific needs than secondary research.

Your first marketing priority is to find out if you can sell your product or services.

The grouping of people for marketing purposes is called segmentation.

Once you find out what people want, there's a need to know the motivations for their choices.

Market research plays a critical role in shaping business and marketing strategies by providing valuable insights into customer preferences, market trends, and competitive landscapes. It helps in identifying target markets, understanding customer needs, and developing effective strategies to achieve business and marketing goals.

By conducting research, businesses can gather data and information to inform their decision-making and ensure that their goals are aligned with customer expectations and market opportunities.

Primary research involves gathering firsthand data directly from the source, such as through surveys, interviews, or observations. It is more specific and focused on the unique needs and objectives of a particular study. Secondary research, on the other hand, involves using existing data and information from published sources.

While secondary research provides a broader understanding of a topic, primary research allows for more control and customization of the research process to address specific research objectives.

When launching a new product or service, one of the primary marketing priorities is to determine if there is a demand for it in the market.

Market research helps in assessing the viability and potential success of a product or service by gathering insights on customer preferences, needs, and market conditions. This information enables businesses to make informed decisions about product development, positioning, pricing, and marketing strategies.

Segmentation is the process of grouping individuals with similar characteristics or behaviors into distinct segments for marketing purposes.

By segmenting the market, businesses can target specific groups that are most likely to be interested in their products or services. Market segmentation allows for more personalized and targeted marketing strategies, resulting in better customer engagement and increased marketing effectiveness.

Once businesses identify what people want through market research, it becomes crucial to understand the motivations behind their choices. This involves delving deeper into the underlying reasons, preferences, and factors that drive consumer behavior.

By understanding the motivations behind consumer choices, businesses can tailor their marketing messages, product features, and overall customer experience to better align with customer needs and increase the chances of success in the market.

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On October 1, 2021, Culver Corp. issued $936,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31.
Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2021.

Answers

Answer:

Culver Corp.

Balance Sheet as of December 31, 2021 (Partial)

Current liabilities:

Bond Interest payable $18,720

Long-term liabilities:

8% Bonds Payable $936,000

Explanation:

a) Data and Calculations:

8% Bonds Payable = $936,000

Maturity period of bonds = 10 years

Annual interest payable = $74,880 ($936,000 * 8%)

Interest payable for 2021 = $18,720 ($74,880 * 3/12)

b) This shows that interest payable for 2021 is a current liability, which will be offset within a year, while the Bonds payable is a long-term liability with a maturity period of 10 years.

This type of business allows unlimited owners. It does NOT allow shareholders. Owners are NOT personally responsible for business liabilities

Question options:

C-Corporation
S-Corporation
Limited Liability Company
Sole Proprietorship

Answers

Answer:

I think its LLC not sure

Explanation:

Uhhh i tried?

Question 1: Refer to lecture PowerPoint slides on organizational culture and discuss how Noor bank transformed on seven dimensions?
Seven dimensions are

Detail-oriented
Innovative
Aggressive
Outcome-oriented
Stable
People-oriented
Team-oriented

Answers

Noor Bank, a UAE-based Islamic bank, underwent a significant transformation across seven dimensions to enhance its competitiveness in the market.

The first dimension was customer-centricity, where the bank focused on delivering personalized experiences to customers through digital channels. The second was innovation, where the bank introduced new products and services such as mobile banking and digital payments to cater to the evolving needs of customers.

The third was operational efficiency, where the bank streamlined its processes to reduce costs and improve productivity.

The fourth dimension was risk management, where the bank implemented a robust risk management framework to mitigate potential risks. The fifth was talent management, where the bank invested in employee training and development to build a high-performing workforce.

The sixth was sustainability, where the bank demonstrated its commitment to social and environmental responsibility through various initiatives.

Finally, the seventh dimension was collaboration, where the bank formed partnerships with other institutions to expand its reach and offerings. Through these transformations, Noor Bank has become a leading player in the UAE's banking industry and continues to innovate and grow.

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Complete question is:

Discuss how Noor bank transformed on seven dimensions?

You are auditing the financial statements of Makibra Ltd, a manufacturing company in Tamale. You noticed during your reviews that the accounts receivable for the year 2022 were 196% of the previous years balance of GH₵1,590,400.00. Upon further investigations, you discovered that a major customer of the Makibra Ltd who owes 60% of the 2022 accounts receivables filed for bankruptcy on 28 November 2022. The financial statements have not been adjusted for this potential loss. Required: (i) Discuss the potential impact of the bankruptcy of the financial statements Makibra Ltd for the year ended 31 December 2021 (ii) Outline the audit procedures you would perform to gather sufficient appropriate audit evidence regarding the collectability of the accounts receivable and assess the need for adjustments in the financial statements, if any.​

Answers

(i) The bankruptcy of Makibra Ltd’s primary customer, who owes 60% of the accounts receivable, will have a substantial impact on the financial statements of Makibra Ltd because the accounts receivable balance will be irrecoverable.

(ii) Audit procedures to perform are Performing analytical procedures, Obtaining direct confirmation, Inquiring about subsequent events, and Performing tests of collectability.

(i) The potential impact of the bankruptcy on the financial statements of Makibra Ltd for the year ended 31 December 2021:

In financial accounting, accounts receivable is an asset account used to record the money owed to an entity for products or services delivered but not yet paid for. The bankruptcy of Makibra Ltd’s primary customer, who owes 60% of the accounts receivable, will have a substantial impact on the financial statements of Makibra Ltd because the accounts receivable balance will be irrecoverable. Makibra Ltd’s financial statements for the year ended 31 December 2021 will therefore overstate its financial position, which will result in material misstatements. The financial statements should therefore be adjusted to account for the loss of the irrecoverable receivable.

(ii) Audit procedures to perform:

In order to determine the need for adjustments in the financial statements of Makibra Ltd, audit procedures to gather sufficient appropriate audit evidence regarding the collectability of the accounts receivable should be performed.

Here are some audit procedures to consider:

Perform analytical procedures: Analytical procedures should be conducted on the accounts receivable for the year 2022 and its percentage relationship with the prior year. The auditor should inquire as to why accounts receivable have grown so much and why the relationship to the prior year has changed so dramatically. This inquiry can provide more information about the general ledger accounts and can be a source of evidence.

Obtain direct confirmation: The auditor should confirm the receivable with the debtor by obtaining direct confirmation from the debtor, asking for confirmation of the amount owed at the end of the year. Confirmation should also request a statement of account to be sent directly to the auditor.

Inquire about subsequent events: As part of the auditor's inquiry, the auditor should ask management if they have information about subsequent events or transactions that may affect the recoverability of the receivable. Management should be able to provide evidence about the potential irrecoverability of the receivable.

Perform tests of collectability: The auditor should perform tests of collectability on the accounts receivable, such as reviewing payment history, the creditworthiness of the debtor, and collections on similar accounts receivable. Based on the results of these tests, the auditor should be able to assess whether an adjustment for the potential loss is necessary.

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