Computer Consulting Limited Was Started in Early 2010 and Continued

question 46

Essay

Computer Consulting Limited was started in early 2010 and continued to operate until early 2013, when it was wound up due to disputes between the two principal shareholders. When it started, the company used the following accounting policies:
1. Use straight-line depreciation for the firm's only asset, a computer which cost $1,100,000 and has an estimated useful life of four years.
2. Estimate warranty expense as 9% of sales.
3. Estimate bad debts expense as 5% of sales.
Derive net income for 2010 to 2012. For the year-end balance for 2013, assume accounts receivable, allowance for doubtful accounts, and the warranty accrual are $0, as the firm wound itself up during the year and all timing differences have been resolved.

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Definitions:

Uniform Products

Products that are consistent in quality and performance across all units and batches.

Marketing Mix

The set of actions, or tactics, that a company uses to promote its brand or product in the market, typically involving the four Ps: product, price, place, and promotion.

Targeting Strategy

A marketing approach that involves identifying and focusing on specific segments of the market that are most likely to be receptive to a product or service.

Consumers

Individuals or groups who use goods and services generated within the economy, playing a critical role in the demand and supply chain.