FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Cash and short-term investments $39,930 Accounts receivable (net) 26,035 Inventory 25,780 Property, plant, and equipment 296,952 Total Assets $388,697 Liabilities and Stockholders' Equity Current liabilities $60,554 Long-term liabilities 98,485 Common stock 162,488 Retained earnings 67,170 Total liabilities and stockholders' equity $388,697 Income Statement Sales $89,668 Cost of goods sold 35,867 Gross margin $53,801 Operating expenses (29,364) Interest expense (4,483) Net income $19,954 Number of shares of common stock outstanding 6,717 Market price of common stock $29 Total dividends paid $9,000 Cash provided by operations $30,000 What is the return on total assets for Diane Company? a.6.3% b.1.4% c.3.4% d.9.8%arrow_forwardForten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash FORTEN COMPANY Income Statement For Current Year Ended December 31 Accounts receivable Inventory Prepaid expenses Total current assets FORTEN COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings…arrow_forwardAssume the following relationships for the Brown Corporation: Sales / Assets 1.5Return on assets (ROA) 3%Return on equity (ROE) 5% Calculate the firm’s profit margin and debt-to-assets ratio, assuming the company uses debt and common equity.arrow_forward
- Some recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes SMOLIRA GOLF, INCORPORATED 2022 Income Statement Net income Dividends Retained earnings 2021 Short-term solvency ratios a. Current ratio b. Quick ratio c. Cash ratio Asset utilization ratios d. Total asset turnover e. Inventory turnover f. Receivables turnover Long-term solvency ratios g. Total debt ratio h. Debt-equity ratio i. Equity multiplier j. Times interest earned ratio k. Cash coverage ratio Profitability ratios I. Profit margin m. Return on assets n. Return on equity $3,061 4,742 12,578 $ 20,381 SMOLIRA GOLF, INCORPORATED Balance Sheets as of December 31, 2021 and 2022 2022 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Other $ 52,746 $ 73,127 2021 $ 188,370 126, 703 5,283 $ 56,384…arrow_forwardPlease provide answer in text (Without image)arrow_forwardThe following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the question that follow. AssetsCash and short-term investments $ 30,000Accounts receivable (net) 20,000Inventory 15,000Property, plant, and equipment 185,000Total assets $250,000 Liabilities and Stockholders' EquityCurrent liabilities $ 45,000Long-term liabilities 70,000Stockholders' equity—Common 135,000Total liabilities and stockholders' equity $250,000 Income StatementSales $85,000Cost of goods sold 45,000Gross margin $40,000Operating expenses (15,000)Interest expenses (5,000)Net income $20,000 Number of shares of common stock outstanding 6,000Market price of common stock $20Total dividends paid $9,000Cash provided by operations $30,000 Using the data provided for Diane Company, what is the return on common stockholders' equity?a.6.75%b.14.8%c.13.5%d.7.4%arrow_forward
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