Chapter 13-Homework C ezto.mheducation.com/hm.tpx Selected year end financial st

Question

Chapter 13-Homework C ezto.mheducation.com/hm.tpx Selected year end financial statements of Cabot Corporation Sollow (All sales were on credit, selected balance sheet amounts at December 31, 2014, were inventory, stock, $88,000, and retained eamings, $63,133) $49,900; total assets, $209,400, common Income Statement 5 450,600 Cost of goods sold297.150 Gross profit Operating expenses Interest expense 153,450 99,100 4,000 Income before taxes Income taxes 50,350 20,283 Net income 30,067 CABOT CORPORATION Balance Sheet December 31, 2015 Liabilities and Equity Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net $ 18,500 3,600 22,000 Accounts payable 8,800 Accrued wages payable 33,600 Income taxes payable 6,000 Long-term note payable, secured 42,150 2550 Common stock 54,300 Retained earnings 62.400 88,000 93.200 by mortgage on plant assets Total assets $269,400 Total liabilities and equity $ 269,400 These are short-term notes recelivable arising from customer (trade) sales

Explanation / Answer

1) Total asset turnover = Net Sales / Average total assets Net Sales = $450600 Average total assets = (269400+209400)/2 = $239400 Total asset turnover = $450600/239400 = 1.88 or Total asset turnover = Net Sales / Total assets Net Sales = $450600 Total assets = $269400 Total asset turnover = $450600/269400 = 1.67 2) Return on total asset = Net profit / Average total assets Net profit = $30067 Average total assets = (269400+209400)/2 = $239400 Return on total asset = $30067/$239400 = 12.56% 3) Return on common stock holders equity = Net profit / Common share holders equity Net profit = $30067 Share holders equity = 88000+93200 = $181200 Return on common stock holders equity = $30067/$181200 =16.59%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.