ice Assignment Gradebook ORION Downloadable eTextbook ment Problem 14-1A (Part L
ID: 2607864 • Letter: I
Question
ice Assignment Gradebook ORION Downloadable eTextbook ment Problem 14-1A (Part Level Submission) Comparative statement data for Farris Company and Ratzlaff Company, two competitors, 2016. Farris Company Ratzlaff Company 2017 2016 2017 2016 $339,700 240,500 79,500 2,500 6,600 Net sales $1,570,000 1,060,000 Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $10 301,600 8,800 53,300 321,000 $312,400 83,200 $79,500 521,100 497,600 139,200 123,300 65,800 74,400 35,800 31,800 108,600 91,200 30,000 24,400 503,500503,500 123,000 123,000 164,200 140,900 33,600 23,600 par Retained earnings Your answer is correct e to searchExplanation / Answer
Calculatuon of net income
Farris company
Net sales. $1570000
Cost of goods sold. ($1060000)
Operating expenses. ($301600)
Interest expense. ($8800)
Income tax expense. ($53300)
Net income. $146300
Total assets of the company
Current assets. $321000
Plant assets. $521100
Total assets. $842100
Total common stock of company. $503500
Return on total assets = net income / total assets ×100
Return on assets = $146300/842100*100. = 17.37%
Return on common stock = net income/ no.share holder
= $146300/$503500*100. =29.06%
Calculatuon of net income of. Ratzlaff company
Net sales. $339700
Cost of goods sold. ($240500)
Operating expenses. ($79500)
Interest income. ($2500)
Income tax expense. ($6600)
Net income. $10600
Total assets of company
Current assets. $83200
Plant assets. $139200
Total assets. $222400
Common stock of company. $123000
Return on total assets = net income / total assets ×100
$10600/222400×100. =4.75%
Return on common stock = net income / total common stock
$10600/$123000*100. =8.62%
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