Here are comparative statement data for Carla Vista Company and Wildhorse Compan
ID: 2579398 • Letter: H
Question
Here are comparative statement data for Carla Vista Company and Wildhorse Company, two competitors. All balance s December 31, 2016 Carla Vista Company Wildhorse Company 2017 2016 2017 2016 Net sales Cost of goods sold Operating expenses Interest expense Income tax expense $1,934,000 1,072,000 268,000 8,200 67,400 $572,000 294,000 92,000 3,100 33,000 Current assets Plant assets (net) Current liabilities 459,625 $440,498 117,504 $112,048 742,788 705,000 197,016 177,395 93,518 106,899 49,841 42,696 Loang-term liablities160,726 126,900, 35.250 $10 705,000 705,000 169,200 169,200 par Retained earnings 243,169 206,699 53,715 42,297 2Explanation / Answer
Carla Vista Company:
2017:
Total Assets = Current Assets + Plant Assets (net)
Total Assets = $459,625 + $742,788
Total Assets = $1,202,413
Total Stockholders’ Equity = Common Stock + Retained Earnings
Total Stockholders’ Equity = $705,000 + $243,169
Total Stockholders’ Equity = $948,169
2016:
Total Assets = Current Assets + Plant Assets (net)
Total Assets = $440,498 + $705,000
Total Assets = $1,145,498
Total Stockholders’ Equity = Common Stock + Retained Earnings
Total Stockholders’ Equity = $705,000 + $206,699
Total Stockholders’ Equity = $911,699
Average Assets = ($1,202,413 + $1,145,498) / 2
Average Assets = $1,173,956
Average Stockholders’ Equity = ($948,169 + $911,699) / 2
Average Stockholders’ Equity = $929,934
Return on Assets = Net Income / Total Assets
Return on Assets = $518,400 / $1,173,956
Return on Assets = 44.16%
Return on Common Stockholders’ Equity = Net Income / Average Stockholders’ Equity
Return on Common Stockholders’ Equity = $518,400 / $929,934
Return on Common Stockholders’ Equity = 55.75%
Wildhorse Company:
2017:
Total Assets = Current Assets + Plant Assets (net)
Total Assets = $117,504 + $197,016
Total Assets = $314,520
Total Stockholders’ Equity = Common Stock + Retained Earnings
Total Stockholders’ Equity = $169,200 + $53,715
Total Stockholders’ Equity = $222,915
2016:
Total Assets = Current Assets + Plant Assets (net)
Total Assets = $112,048 + $177,395
Total Assets = $289,443
Total Stockholders’ Equity = Common Stock + Retained Earnings
Total Stockholders’ Equity = $169,200 + $42,297
Total Stockholders’ Equity = $211,497
Average Assets = ($314,520 + $289,443) / 2
Average Assets = $301,981.50
Average Stockholders’ Equity = ($222,915 + $211,497) / 2
Average Stockholders’ Equity = $217,206
Return on Assets = Net Income / Total Assets
Return on Assets = $149,900 / $301,981.50
Return on Assets = 49.63%
Return on Common Stockholders’ Equity = Net Income / Average Stockholders’ Equity
Return on Common Stockholders’ Equity = $149,900 / $217,206
Return on Common Stockholders’ Equity = 69.01%
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