Could someone please help me solve the incorrect answers in red? *Problem 13-2A

Question

Could someone please help me solve the incorrect answers in red?

*Problem 13-2A Your answer is partially correct. Try again The comparative statements of Osborne Company are presented here OSBORNE COMPANY Income Statements For the Years Ended December 31 2014 2013 Net sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Other expenses and losses $1,891,724 $1,751,684 1,007,184 744,500 501,184480 64 264,316 1,059,724 832,000 330,816 Interest expense Income before income taxes Income tax expense Net income 23,166 307,650 93,166 21,166 243,150 74,166 $ 214,484$ 168,98 OSBORNE COMPANY Balance Sheets December 31 Assets 2014 2013 Current assets Cash Debt investments (short-term) Accounts receivable Inventory 60,100 64,200 50,000 103,984 116,666 334,850 532,628 $1,041,578 $867,478 74,000 118,984 127,166 380,250 661,328 Total current assets Plant assets (net) Total assets Liabilities and Stockholders' Equit Current liabilities $161,184 $146,584 43,166 189,750 212,328 402,078 Accounts payable Income taxes payable 44,666 205,850 232,328 438,178 Total current liabilities Bonds payable Total liabilities Stockholders' equity Common stock ($5 par) Retained earnings 290,000 313,400 603,400 465,400 300,000 165,400 Total stockholders' equity Total liabilities and stockholders' equity $1,041,578 $867,478

Explanation / Answer

Solution :

(a) EPS

= net income / average weighted outstanding shares

= $214,484 / 59,000 = $3.63

(b) Return on stockholder's equity

= Net income / average stockholder's equity x100

= $214,484 / $534,400 x100

= 40.135 % ( rounded off as 40.14%)

(c) Return on assets

= Net income / average total assets x100

= $214,484 / $954,528 x100

= 22.47%

(k) debt to assets

= total liability/total assets

= $438,178/ $1,041,578

= 42.07

(n) free cash flow

= Cash from operating activities - capital expenditure - cash dividend

= $222,060 - $135,300 - $66,484

= $20,276

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