AbsVarCost_Pract_Wachovia_Ques

3 net income 2009 r200 r100 150000 300000 200000

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Unformatted text preview: R100 160,000 300,000 250,000 253,000 1. 3. Net income 2009 R200 R100 150,000 300,000 200,000 203,000 REQUIRED: 2011 R’000 34,000 Cost of goods manufactured Opening inventory Cost of goods manufactured Closing inventory Wachovia continued co 1 Prepare the income statements for the New Africa Division for the three financial years ended 31 March 2009 to 2011 in the alternative format that Bill Peters was talking about. It would be easier to work in thousands of rands (R’000). Show all workings. You are not required to show the detailed inventory movement. Place the (12 Marks) three years side by side in the proper format. 5. 6. 7. Comment on the specifically on the performance of the New Africa Division based on the income statements prepared in part 2. Why was Bill Peters “gut feeling” correct that the New Africa Division was overstating profits. (5 Marks) How could a manager or a shareholder detect income increases that are caused mainly by production for inventory? (2 Marks) Bonus question Who was the CEO of Sunbeam Inc. in the United States who got caught increasing production unnecessarily in order to maintain profitability? Question and solution by CCSmith 2013 (1 Mark) 2...
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This document was uploaded on 04/05/2014.

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