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Perform common size analysis. What does this analysis tell you about your company? Are there any trends apparent with either the industry or your firm? 7. Use the extended DuPont equation to provide a summary and overview of your firm’s financial condition. Be sure to do all calculations for 3 years, using Excel. Use real numbers from the financials, not reported ratios provided by online and other sources. Show the source of the numbers. See the syllabus for complete details of the project. Include the balance sheet and income statement and as many exhibits as you wish.

Marina

Marina wanted to quit her job as a flight attendant where she earned $2,000 each month. She has figured her entrepreneurial talent or foregone entrepreneurial income to be $7,000 a year. To start a new business, she cashed in $100,000 from her saving account that earned 1 percent interest annually. She went on to run a small car dealership called Affordable Rides. In the first year, she sold vehicles and services valued at $540,000. During the year, $500,000 goes to cover all explicit costs (e.g. building, cost of goods sold, marketing, employee wages, interest on a loan, etc.). Calculate, and answer the following (based on the first year):
a) Total Revenue: $
b) Total Explicit Costs: $
c) Accounting Profit: $
d) Total Implicit Costs: $
e) Normal Profit: $
f) Economic Profits: $
g) From an economic perspective, did Marina make a good decision (Yes or No)?

Lindon

Lindon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $80,000 as follows:

Direct Materials………………………………………..$18,000

Direct Labor………………………………………………20,000

Variable Manufacturing Overhead………………. 12,000

Fixed Manufacturing Overhead………………….. 30,000

Total Costs……………………………………………….80,000

An outside supplier has offered to provide Part X at a price of $13 per unit. If Lindon stops producing the part internally, one-third of the manufacturing overhead would be eliminated.

Required: Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting the outside supplier’s offer.

Kona Company

Prepare entries in journal form without explanations for the merchandising transactions listed below for Kona Company. Assume use of the periodic inventory system.

July 1 Sold merchandise to Tubman Company for $2,000, terms n/15
July 2 Purchased merchandise from Apple Company for $8,000, terms n/15
July 3 Gave credit to Tubman Company for merchandise returned, $200
July 5 Purchased merchandise from Middleton Company for $10,000, terms n/30
July 10 Received payment from Tubman Company for purchase of July 1
July 11 Returned $1,000 in merchandise to Middleton Company for credit
July 13 Paid Apple Company in full for purchase July 2
July 14 Paid Middleton Company in Full for Purchase of July 5