X-cee-ski company recently expanded its manufacturing capacity, which will allow it to produce up to 21,000 pairs of cross-country skis of the mountaineering model or the touring model. the sales department assures management that it can sell between 9,000 and 14,000 pairs of either product this year. because the models are very similar, x-cee-ski will produce only one of the two models.

the following information was compiled by the accounting department:

per-unit (pair) data
mountaineering touring
selling price $180 $120
variable costs 130 90
fixed costs will total $320,000 if the mountaineering model is produced but will be only $220,000 if the touring model is produced. x-cee-ski is subject to a 40 percent income tax rate.

required:

1. if x-cee-ski company desires an after-tax net income of $48,000, how many pairs of touring model skis will the company have to sell?
pairs of touring skis

2. suppose that x-cee-ski company decided to produce only one model of skis. what is the total sales revenue at which x-cee-ski company would make the same profit or loss regardless of the ski model it decided to produce?
$

3. if the sales department could guarantee the annual sale of 12,000 pairs of either model, which model would the company produce? (cma adapted)
mountaineering model

feedback

1. see cornerstone 16.4.

2. determine operating income formulas for each ski model, set them equal to one another and solve for x (units)

3. use the number of pairs given for x in the operating income formula for each model

The vaska company buys a patent on january 1, year one, and agrees to pay $100,000 per year for the next five years. the first payment is made immediately, and the payments are made on each january 1 thereafter. if a reasonable annual interest rate is 8 percent, what is the recorded value of the patent? 1. $378,4252. $431,2133. $468,9504. $500,000

Journalize the following transactions that occurred in september 2015 for aquamarines. no explanations are needed. identify each accounts payable and accounts receivable with the vendor or customer name. sep. 3 purchased merchandise inventory on account from shallin wholesalers, $5,000. terms 1/15, n/eom, fob shipping point. 4 paid freight bill of $80 on september 3 purchase. 4 purchased merchandise inventory for cash of $1,700. 6 returned $500 of inventory from september 3 purchase. 8 sold merchandise inventory to hermosa company, $6,000, on account. terms 2/15, n/35. cost of goods, $2,640. 9 purchased merchandise inventory on account from thomas wholesalers, $8,000. terms 2/10, n/30, fob destination. 10 made payment to shallin wholesalers for goods purchased on september 3, less return and discount. 12 received payment from hermosa company, less discount. 13 after negotiations, received a $200 allowance from thomas wholesalers. 15 sold merchandise inventory to jordan company, $2,500, on account. terms 1/10, n/eom. cost of goods, $1,050. 22 made payment, less allowance, to thomas wholesalers for goods purchased on september 9. 23 jordan company returned $400 of the merchandise sold on september 15. cost of goods, $160. 25 sold merchandise inventory to smithsons for $1,100 on account that cost $400. terms of 2/10, n/30 were offered, fob shipping point. as a courtesy to smithsons, $75 of freight was added to the invoice for which cash was paid by aquamarines. 26 after negotiations, granted a $100 allowance to smithsons for merchandise purchased on september 25. 29 received payment from smithsons, less allowance and discount. 30 received payment from jordan company, less return.

Calculate riverside’s financial ratios for 2014. assume that riverside had $1,000,000 in lease payments and $1,400,000 in debt principal repayments in 2014. (hint: use the book discussion to identify the applicable ratios.)