Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.12E
Exercise 2.12
LQ 2. 3
Calculate
| Retained earnings, December 31, 2016 | $210,300 |
| Decrease in total liabilities during 2016 | 45,800 |
| Gain on the sale of buildings during 2016 | 16,100 |
| Dividends declared and paid in 2016 | 4,500 |
| Proceeds from sale of common stock in 2016 | 49,400 |
| Net income for the year ended December 31,2016 | 22,600 |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are
as of the end of the fiscal year (in millions).
2017
2016
Net sales
$4,750
$5,401
Cost of goods sold
3,901
3,500
Net income
55
120
Accounts receivable
65
109
Inventory
1,250
1,350
Total assets
2,850
3,150
Total common stockholders' equity
961
1,111
Compute the following ratios for 2017. (Round asset turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8
or 2.5%)
QUESTION 6
Bodie Corporation reported the following amounts in its financial statements:
$58,560
$113,099
$74,044
Retained earnings, Jan. 1, 2018
Retained earnings, Dec. 31, 2018
Net income, 2018
What were the dividends declared and paid in 2018? $
For years ended December 31
Equity Investee Financial Summary,
$ millions
2018
2017
2016
Net sales...
Gross margin
Net income..
Cummins' share of net income.
$7,352
$7,050
$5,654
1,373
1,422
1,182
647
680
499
$ 336
$ 308
$ 260
Royalty and interest income..
58
49
41
Total equity, royalty and interest from investees...
$ 394
$ 357
$ 301
Current assets
$3,401
1,449
$3,416
1,379
Noncurrent assets
Current liabilities..
Noncurrent liabilities..
Net assets...
(2,669)
(218)
(2,567)
(237)
$1,963
$1,991
Cummins' share of net assets
$1,144
$1,116
a. What assets and liabilities of unconsolidated affiliates are omitted from Cummins' balance sheet as a
result of the equity method of accounting for those investments?
b. Do the liabilities of the unconsolidated affiliates affect Cummins directly? Explain.
c. How does the equity method impact Cummins' ROE and its RNOA components (net operating asset
turnover and net operating profit margin)?
Chapter 2 Solutions
Accounting: What the Numbers Mean
Ch. 2 - Prob. 2.1MECh. 2 - Prob. 2.2MECh. 2 - Prob. 2.3MECh. 2 - Prob. 2.4MECh. 2 - Mini-Exercise 2.5 LO 2. 4 Identify accounts by...Ch. 2 - Mini-Exercise 2.6 LO 2. 4 Identify accounts by...Ch. 2 - Prob. 2.7ECh. 2 - Exercise 2.8 LO 2. 4 Identify accounts by category...Ch. 2 - Exercise 2.9 LQ 2 , 3 Understanding financial...Ch. 2 - Exercise 2.10 LO 2 , 3 Understanding financial...
Ch. 2 - Prob. 2.11ECh. 2 - Exercise 2.12 LQ 2. 3 Calculate retained earnings...Ch. 2 - Prob. 2.13ECh. 2 - Prob. 2.14ECh. 2 - Prob. 2.15PCh. 2 - Prob. 2.16PCh. 2 - Problem 2.17 LO 2, 3, 4 Understanding and...Ch. 2 - Problem 2.18 LO 2. 3, 4 Understanding and...Ch. 2 - Problem 2.19 LO 2, 3, 4 Prepare an income...Ch. 2 - Prob. 2.20PCh. 2 - Problem 2.21
LO 2, 3
Transaction...Ch. 2 - Prob. 2.22PCh. 2 - Problem 2.23 LO 2, 3, 5 Complete the balance sheet...Ch. 2 - Prob. 2.24PCh. 2 - Prob. 2.25PCh. 2 - Prob. 2.26PCh. 2 - Case 2.27 LO 2, 4, 6, 7 Prepare a personal balance...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Use the common-size financial statements found here: ommon-Size Balance Sheet 2016Cash and marketable securities $ 480 1.5 %Accounts receivable 6,030 18.2Inventory 9,540 28.8Total current assets $ 16,050 48.5 %Net property, plant, and equipment 17,020 51.5Total assets $33,070 100.0 %Accounts payable $ 7,150 21.6 %Short-term notes 6,850 20.7Total current liabilities $ 14,000 42.3 %Long-term liabilities 7,010 21.2Total liabilities $ 21,010 63.5 %Total common shareholders’ equity 12,060 36.5Total liabilities and shareholders’ equity $33,070 100.0 %Common-Size Income Statement 2016Revenues $ 30,000 100.0 %Cost of goods sold (20,050) 66.8Gross profit $ 9,950 33.2 %Operating expenses (7,960) 26.5Net operating income $ 1,990 6.6 %Interest expense (940) 3.1Earnings before taxes $ 1,050 3.5 %Income taxes (382) 1.3Net income $668 2.2 % Specifically, write up a brief narrative that responds to the following questions: a. How much cash does Patterson have on hand relative to its total…arrow_forwardProfitability ratios The following selected data were taken from the financial statements of Robinson Inc. for December 31, 2016, 2015 and 2014: The 2016 net income was 372,000, and the 2015 net income was 492,000. No dividends on common stock were declared between 2014 and 2016. a. Determine the rate earned on total assets, the rate earned on stockholders equity, and the rate earned on common stockholders equity for the years 2015 and 2016. Round to one decimal place. b. What conclusions can be drawn from these data as to the companys profitability?arrow_forwardMeasures of liquidity, solvency, and profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was 82.60 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1........... 3,704,000 3,264,000 Net income.................... 600,000 550,000 Total....................... 4,304,000 3,814,000 Dividends: On preferred stock.............. 10,000 10,000 On common stock............ 100,000 100,000 Total dividends............... 110,000 110,000 Retained earnings, December 31..... 4,194,000 3,704,000 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales..................... 10,850,000 10,000,000 Cost of goods sold......... 6,000,000 5,450,000 Gross profit............... 4,850,000 4,550,00 Selling expenses.......... 2,170,000 2,000,000 Administrative expenses... 1,627,500 1.500,000 Total operating expenses .. 3,797,500 3,500,000 Income from operations ... 1,052,500 1,050,000 Other revenue............ 99,500 20,000 1,152,000 1,070,000 Other expense (interest)... 132,000 120,000 Income before income tax . 1,020,000 950,000 Income tax expense....... 420,000 400.000 Net income............... 600,000 550,000 Marshall Inc. Comparative Balance Sheet December 31,20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash.......................................................... 1,050,000 950,000 Marketable securities........................................... 301,000 420,000 Accounts receivable (net)....................................... 585,000 500,000 Inventories.................................................... 420,000 380,000 Prepaid expenses.............................................. 108,000 20,000 Total current assets.......................................... 2,464,000 2,270,000 Long-term investments............................................ 800.000 800,000 Property, plant, and equipment (net)............................... 5,760,000 5,184,000 Total assets....................................................... 9,024,000 8,254,000 Liabilities Current liabilities.................................................. 880,000 800,000 Long-term liabilities: Mortgage note payable, 6%.............. 200,000 0 Bonds payable, 4%............................................. 3,000,000 3,000,000 Total long-term liabilities.................................... 3,200,000 3,000,000 Total liabilities.................................................... 4,080,000 3,800,000 Stockholders' Equity Preferred 4% stock, 5 par......................................... 250,000 250,000 Common stock, 5 par............................................. 500,000 500,000 Retained earnings................................................. 4,194,000 3,704,000 Total stockholders' equity.......................................... 4,944.000 4,454,000 Total liabilities and stockholders' equity............................. 9,024.000 8,254,000 Instructions Determine the following measures for 20Y2, rounding to one decimal place, including percentages, except for per-share amounts: 1. Working capital 2. Current ratio 3 Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yieldarrow_forward
- Smiltons Total Assets Net Income Sales Equity 2018 $241,225 $8,004 $535,845 $79,746 2017 11,834 520,549 85,656 2016 16,372 505,383 85,578 224,974 218,708 a. Compute return on equity (ROE) for the two recent years. b. Compute return on assets (ROA) for the two recent years. c. Compute profit margin (PM) for the two recent years. d. Compute asset turnover (AT) for the two recent years. • Round ROE, ROA and PM to one decimal place (example: 0.2345 = 23.5%). Round AT to two decimal places (example: 1.35). ROE ROA PM AT 2018 9.7% * 3.4 * 1.5% x 2.3 x 2017 13.8% x 5.3% x 2.3% * 2.35 x e. Which of the following best explains the change in ROA during 2018? The company's profitability weakened considerably. The company's asset productivity weakened considerably. * The company had higher sales in 2018. The company had higher assets 2018. Week 1 Homarrow_forwardE 18-1 Comprehensive The following is from the 2018 annual report of Kaufman Chemicals, Inc.: Statements of Comprehensive Income Years Ended December 31 income • LO18-2 2018 2017 2016 Net income $856 $766 $594 Other comprehensive income: Change in net unrealized gains on investments, net of tax of $22, ($14), and $15 in 2018, 2017, and 2016, respectively 34 (21) 23 Other (2) $888 (1) $744 $618 Total comprehensive income Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders equity as follows: ($ in millions) 2018 2017 Shareholders' equity: Common stock 355 355 Additional paid-in capital Retained earnings Accumulated other comprehensive income 8,567 6,544 8,567 5,988 107 75 Total shareholders'equity $15,573 $14,985 Required: 1. What is comprehensive income and how does it differ from net income? 2. How is comprehensive income reported in a balance sheet? 3. Why is Kaufman's 2018 balance sheet amount different from the 2018 amount…arrow_forwardQuestion 13 Beta Corporation reported the following information for fiscal 2017 and 2016. December 31 Operating assets Operating liabilities Net Non-operating Obligations (NNO) Net operating profit after tax (NOPAT) Interest Expenses ome Tax rate 2017 $164,101 120,785 32,040 33,371 4,500 30,446 3596 2016 $153,211 114,836 2,5500 31,742 3,905 29,204 35% What are the company's free cash flows to the equity (FCFE) for 2017? O $13,016 O $19,556 $26.096 $33,371arrow_forward
- Question 2 Selected ratios of Company X are shown below: Inventory turnover Days' sales uncollected Days' purchases in accounts payable Total asset turnover Equity ratio Times interest earned 2021 5.3 32.4 21.0 2.6 0.8 N.A. 2020 7.1 18.3 20.0 2.5 0.8 N.A. Using the financial ratios provided, analyse the performance of Company X in 2021 compared to the previous year.arrow_forwardQUESTION 6 A firm had the following accounts and financial data for 2017. Sales Revenue $3,060 Accounts Receivable 500 Interest expense 126 Total operating expenses 600 Accounts payable 240 The firm's earnings available to common shareholders for 2017 are -$224 $195 Cost of goods sold Preferred stock dividend Tax rate Number of shares of common stocks outstanding $302 $516 $1,800 18 40% 1,000arrow_forwardBalance Sheets as of December 31, 2015 and 2016 2015 2016 2015 2016 Assets Liabilities and Owners' Equity Cash Accounts receivable Inventory Net fixed assets 21,900 24,300 Common stock $ 850 $ 1,210 126 Accounts payable 1,370 Short-term notes payable $ 1,080 $ 970 500 0 4,350 4,610 Long-term debt 11,900 13,500 6,000 6,200 Retained earnings Total assets $28,310 $30,406 Total liabilities and owners' equity 8,830 $28,310 $30,406 9,736 2016 Income Statement Sales Cost of goods sold Depreciation Interest Taxes Net income $30,710 18,470 6,132 744 1,824 $ 3,540 What are the values of the three components of the DuPont identity? Use ending balance sheet values. Multiple Choicearrow_forward
- Assets Liabilities + Equity Balance, Jan. 1, 2015 Balance, Dec. 31, 2015 $50,000 $40,000 40,000 20,000 Required: Using the information above, calculate net income under each of the following assump- tions. a. During 2015, no share capital was issued and no dividends were declared. b. During 2015, no share capital was issued and dividends of $5,000 were declared. c. During 2015, share capital of $12,000 was issued and no dividends were declared.arrow_forwardCh: Analyzing Financial Statements The current year financial statement for sand and Juffair companies are presented below. Balance sheet at 31 Dec 2019 Item Cash Account receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10%) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement at 31 Dec 2019 item Sales revenue (1/3 on credit) (-) Cost of goods sold (-) Operating expenses Net income Other data item Per share stock price at end of current year Average income tax rate Dividends declared and paid in current year Sand 45000 45000 95000 160000 90000 435000 95000 75000 155000 40000 70000 435000 Sand 440000 230000 159000 51000 Sand 23 30% 34000 Juffair 22000 35000 45000 415000 320000 837000 65000 65000 522000 110000 75000 837000 Juffair 800000 399000 315000 86000 Juffair 25 30% 153000 Both companies are in the fish catching and…arrow_forwardRefer to the data below. Retained earnings, December 31, 2020 $ 416,840 Net decrease in total assets during 2020 63,580 Net increase in accounts receivable in 2020 14,620 Dividends declared and paid in 2020 57,120 Proceeds from issuance of bonds during 2020 150,280 Net loss for the year ended December 31, 2020 39,100 Required:From the above data, calculate the Retained Earnings balance as of December 31, 2019:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License