Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 3DQ
To determine
Determine whether current year net income has improved the operating performance or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A company’s current year net income (after income tax) is 25% larger than that of the preceding year. Does this indicate improved operating performance? Why or why not?
The problem is stated in the picture.
Here is the question:
1. How much is the gross profit for the year?
PROBLEM 11-17 Return on Investment (ROI) and Residual Income LO11-1, LO11-2
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Ending
Balance
Balance
Assets
Cash
$ 140,000
$ 120,000
Accounts receivable
450,000
530,000
Inventory
320,000
380,000
Plant and equipment, net
680,000
620,000
Investment in Buisson, S.A.
280,000
170,000
250,000
Land (undeveloped)
180,000
Total assets
$2,020,000
$2,100,000
Liabilities and Stockholders' Equity
Accounts payable.
$ 360,000
$ 310,000
Long-term debt
Stockholders' equity
1,500,000
1,500,000
160,000
290,000
Total liabilities and stockholders' equity
$2,020,000
$2,100,000
Joel de Paris, Inc.
Income Statement
Sales
$4,050,000
Operating expenses
Net operating income
3,645,000
405,000
Interest and taxes:
Interest expense
$150,000
Таx expense
110,000
260,000
Net income
$ 145,000
The
company paid dividends of $15,000 last year. The "Investment in Buisson, S.A.," on the
balance sheet represents an…
Chapter 17 Solutions
Financial Accounting
Ch. 17 - Prob. 1DQCh. 17 - What is the advantage of using comparative...Ch. 17 - Prob. 3DQCh. 17 - How would the current and quick ratios of a...Ch. 17 - Prob. 5DQCh. 17 - What do the following data, taken from a...Ch. 17 - a. How does the rate earned on total assets differ...Ch. 17 - Kroger, a grocery store, recently had a...Ch. 17 - Prob. 9DQCh. 17 - Prob. 10DQ
Ch. 17 - Prob. 1PEACh. 17 - Prob. 1PEBCh. 17 - Prob. 2PEACh. 17 - Vertical analysis Income statement information for...Ch. 17 - Prob. 3PEACh. 17 - Prob. 3PEBCh. 17 - Prob. 4PEACh. 17 - Prob. 4PEBCh. 17 - Prob. 5PEACh. 17 - Inventory analysis A company reports the...Ch. 17 - Prob. 6PEACh. 17 - Prob. 6PEBCh. 17 - Times interest earned A company reports the...Ch. 17 - Times interest earned A company reports the...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Prob. 9PEACh. 17 - Prob. 9PEBCh. 17 - Common stockholders' profitability analysis A...Ch. 17 - Common stockholders' profitability analysis A...Ch. 17 - Earnings per share and price-earnings ratio A...Ch. 17 - Earnings per share and price-earnings ratio A...Ch. 17 - Revenue and expense data for Gresham Inc. for two...Ch. 17 - Prob. 2ECh. 17 - Common-sized income statement Revenue and expense...Ch. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - The following data were taken from the balance...Ch. 17 - Prob. 7ECh. 17 - The bond indenture for the 10-year, 9% debenture...Ch. 17 - The following data are taken from the financial...Ch. 17 - Prob. 10ECh. 17 - The following data were extracted from the income...Ch. 17 - Prob. 12ECh. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Hasbro and Mattel, Inc., are the two largest toy...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Three major segments of the transportation...Ch. 17 - Prob. 17ECh. 17 - Profitability ratios Ralph Lauren Corporation...Ch. 17 - The following data were taken from the financial...Ch. 17 - The balance sheet for Garcon Inc. at the end of...Ch. 17 - Earnings per share, price-earnings ratio, dividend...Ch. 17 - The table that follows shows the stock price,...Ch. 17 - Earnings per share, discontinued operations The...Ch. 17 - Prob. 24ECh. 17 - Prob. 25ECh. 17 - Unusual items Explain whether Colston Company...Ch. 17 - Prob. 1PACh. 17 - For 2016, Indigo Company initiated a sales...Ch. 17 - Effect of transactions on current position...Ch. 17 - The comparative financial statements of Bettancort...Ch. 17 - Addai Company has provided the following...Ch. 17 - Prob. 1PBCh. 17 - Prob. 2PBCh. 17 - Effect of transactions on current position...Ch. 17 - Prob. 4PBCh. 17 - Crosby Company has provided the following...Ch. 17 - Financial Statement Analysis The financial...Ch. 17 - Prob. 1CPCh. 17 - Prob. 2CPCh. 17 - The condensed income statements through income...Ch. 17 - Prob. 4CPCh. 17 - Marriott International, Inc., and Hyatt Hotels...
Knowledge Booster
Similar questions
- Economic income (budgeted income) (tangible): measured by the change in equity, where the net assets of the enterprise at the end of the year are matched with the net assets of the enterprise at the end of the year, minus (-) any *.additional investments during the year true False Oarrow_forwardFill in the blanks: An increase in accrued income during the particular year is ________________the net profit (added to/deducted from).arrow_forwardRequired: 1. Compute the company's average operating assets for last year. 2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.) 3. What was the company’s residual income last year?arrow_forward
- Calculate for each year (i) Return on capital employed(ii) Net profit margin(iii) Total Payable daysarrow_forwardbase on the image provided answer the following a. What is the overall performance of the company in the next five (5) years? Justify your answer. b. At what year will the forecasted total operating expenses exceed the standard? Give at least two(2) possible reasons behind it.arrow_forwardHow do you calculate average total assets when your annual report only shows the beginning of the year assets? I need average total assets to calculate ROI.arrow_forward
- Sisyphus Corp. has projected that their performance for the next five years result to the following: YEAR Revenue Cash Operating Expenses Net Income Before Tax Net Income After Tax Annual Capital Requirement FCFF 1            50            30 20 14 2.00 12.00 2        55.00        33.00 22 15.4 2.00 13.40 3        60.50        36.30 24.2 16.94 2.00 14.94 4        66.55        39.93 26.2 18.634 2.00 16.63 5        73.21        43.92 29.29 20.503 2.00 18.50 Growth Rate            = 0.10 or 10% Requirement: How much is the Terminal Value? How much is the Free Cash Flow for years 1-5? How much is the Discounted Net Cash Flows to the Firm for years 1-5?arrow_forwardGlobal Corp. expects sales to grow by 7% next year. Using the percent of sales method and the data provided in the given tables LOADING... ​, ​forecast: a. Costs except depreciation b. Depreciation c. Net income d. Cash e. Accounts receivable f. Inventory g.​ Property, plant, and equipment h. Accounts payable  ​(​Note: Interest expense will not change with a change in sales. Tax rate is 26​%.)  The Tax Cuts and Jobs Act of 2017 temporarily allows​ 100% bonus depreciation​ (effectively expensing capital​ expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement   Net Sales   185.3Costs Except Depreciation   -175.4EBITDA   9.9Depreciation and Amortization   -1.2EBIT   8.7Interest Income (expense)   -7.7Pretax Income   1Taxes (26%)   -0.3Net Income   0.7  Balance Sheet   Assets   Cash   23.4Accounts…arrow_forward1. Given the most recent financial statements for FY2023. Sales for FY2024 are expected to grow by 10 percent. The following assumption must be held in the pro forma financial statements. The tax rate (percentage), the interest expense ($ amount), and the dividend payout ratio (percentage) will remain constant. COGS, SGA, Depreciation, all current asset accounts, Net PPE, intangibles, other assets, and accounts payable increase spontaneously with sales. Calculate the pro forma value for total assets for FY24 if the firm operates at full capacity and no new debt or equity is issued. (Enter percentages as decimals and round to 4 decimals) 2. Given the most recent financial statements for FY2023. Sales for FY2024 are expected to grow by 10 percent. The following assumption must be held in the pro forma financial statements. The tax rate (percentage), the interest expense ($ amount), and the dividend payout ratio (percentage) will remain constant. COGS, SGA, Depreciation, all…arrow_forward
- Use historic growth in total revenues from 2017 to 2017 to show the total revenue for 2019. Use historic rate of the total cost of revenue to total revenue to show total cost of revenue.arrow_forwardHal's Ice Cream Stands $ Thousands Assets Cash and cash equivalents Accounts receivable Inventories Total Current Assets Equipment Less accumulated depreciation Land Holdings Total Assets Liabilities & Shareholders' Equity Accounts Payable Short-term Debt Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Liabilities & Shareholders' Equity Hal's Income Statement for the Year Ending 12/31/2021 ($ 000s except for earnings per share) Sales Cost of Goods Sold Payroll and employee benefits Gross Operating Profit Selling, general and administrative expenses Income from Operations Interest expense Income taxes Net Income Earnings per share of common stock ($) 2021 $100 50 75 $225 300 (5) 15 $535 200 50 250 100 350 ??? $535 $500 100 200 200 100 100 5 20 $75 $0.25arrow_forwardcalculate the efficiency ratios, liquidity ratios, leverage ratios, and profitability ratios for KPC Corporation for this year. Where data is available, also calculate ratios for last year. Use a 360-day year. All sales are on credit to business customers. Assume an income tax rate of 30 percent.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub