Calculate the current ratio. (Round your answers to the nearest hundredth.) Calculate the total debt to total assets ratio. (Round your answers to the nearest hundredth.) Calculate the return on equity (after tax) ratio.
Calculate the current ratio. (Round your answers to the nearest hundredth.) Calculate the total debt to total assets ratio. (Round your answers to the nearest hundredth.) Calculate the return on equity (after tax) ratio.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....
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LOGIC COMPANY | |||||||
Comparative Income Statement | |||||||
For Years Ended December 31, 2017 and 2018 | |||||||
2018 | 2017 | ||||||
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: | |||||||
$ | 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, 2017 and 2018 | |||||||
2018 | 2017 | ||||||
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 | |||
Common stock | $ | 21,000 | $ | 21,000 | |||
26,000 | 12,000 | ||||||
Total stockholders’ equity | $ | 47,000 | $ | 33,000 | |||
Total liabilities and stockholders’ equity | $ | 89,000 | $ | 65,500 | |||
Calculate the
Calculate the total debt to total assets ratio. (Round your answers to the nearest hundredth.)
Calculate the return on equity (after tax) ratio. (Round your answers to the nearest hundredth.)
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