LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2023 2023 2022 Gross sales $ 19,000 $ 15,000 Sales returns and allowances 1,000 100 Net sales $ 18,000 $ 14,900 Cost of merchandise (goods) sold 12,000 9,000 Gross profit $ 6,000 $ 5,900 Operating expenses: Depreciation $ 700 $ 600 Selling and administrative 2,200 2,000 Research 550 500 Miscellaneous 360 300 Total operating expenses $ 3,810 $ 3,400 Income before interest and taxes $ 2,190 $ 2,500 Interest expense 560 500 Income before taxes $ 1,630 $ 2,000 Provision for taxes 640 800 Net income $ 990 $ 1,200 LOGIC COMPANY Comparative Balance Sheet December 31, 2022 and 2023 2023 2022 Assets Current assets: Cash $ 12,000 $ 9,000 Accounts receivable 16,500 12,500 Merchandise inventory 8,500 14,000 Prepaid expenses 24,000 10,000 Total current assets $ 61,000 $ 45,500 Plant and equipment: Building (net) $ 14,500 $ 11,000 Land 13,500 9,000 Total plant and equipment $ 28,000 $ 20,000 Total assets $ 89,000 $ 65,500 Liabilities Current liabilities: Accounts payable $ 13,000 $ 7,000 Salaries payable 7,000 5,000 Total current liabilities $ 20,000 $ 12,000 Long-term liabilities: Mortgage note payable 22,000 20,500 Total liabilities $ 42,000 $ 32,500 Stockholders’ Equity Common stock $ 21,000 $ 21,000 Retained earnings 26,000 12,000 Total stockholders’ equity $ 47,000 $ 33,000 Total liabilities and stockholders’ equity $ 89,000 $ 65,500 Calculate the return on equity (after tax) ratio. Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2022 and 2023
  2023 2022
Gross sales $ 19,000 $ 15,000
Sales returns and allowances 1,000 100
Net sales $ 18,000 $ 14,900
Cost of merchandise (goods) sold 12,000 9,000
Gross profit $ 6,000 $ 5,900
Operating expenses:    
Depreciation $ 700 $ 600
Selling and administrative 2,200 2,000
Research 550 500
Miscellaneous 360 300
Total operating expenses $ 3,810 $ 3,400
Income before interest and taxes $ 2,190 $ 2,500
Interest expense 560 500
Income before taxes $ 1,630 $ 2,000
Provision for taxes 640 800
Net income $ 990 $ 1,200
LOGIC COMPANY
Comparative Balance Sheet
December 31, 2022 and 2023
  2023 2022
Assets    
Current assets:    
Cash $ 12,000 $ 9,000
Accounts receivable 16,500 12,500
Merchandise inventory 8,500 14,000
Prepaid expenses 24,000 10,000
Total current assets $ 61,000 $ 45,500
Plant and equipment:    
Building (net) $ 14,500 $ 11,000
Land 13,500 9,000
Total plant and equipment $ 28,000 $ 20,000
Total assets $ 89,000 $ 65,500
Liabilities    
Current liabilities:    
Accounts payable $ 13,000 $ 7,000
Salaries payable 7,000 5,000
Total current liabilities $ 20,000 $ 12,000
Long-term liabilities:    
Mortgage note payable 22,000 20,500
Total liabilities $ 42,000 $ 32,500
Stockholders’ Equity    
Common stock $ 21,000 $ 21,000
Retained earnings 26,000 12,000
Total stockholders’ equity $ 47,000 $ 33,000
Total liabilities and stockholders’ equity $ 89,000 $ 65,500

Calculate the return on equity (after tax) ratio.

Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth.

 
 
 
 
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