M Chapter 3 EOC problems X G Home Chegg x C ezto.mheducation.com/hm.tpx Bethesda
ID: 2709016 • Letter: M
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M Chapter 3 EOC problems X G Home Chegg x C ezto.mheducation.com/hm.tpx Bethesda Mining Company reports the following balance sheet information for 2013 and 2014. BETHESDA MINING COMPANY Balance Sheets as of December 31, 2013 and 2014 2013 2014 2013 2014 Assets Liabilities and Owners' Equity Current assets Current liabilities $193,422 $20 31,982 41,399 Accounts payable Cash Accounts receivable 58,781 79, 139 Notes payable 88,520 40.088 Inventory 131,971 98,632 $281,942 99 Total Total $222,734 $319,170 Long-term debt $244,000 180,750 Owners' equity $211,000 $211,000 Common stock and paid-in surplus Accumulated retained earnings 143,239 75,549 Fixed assets $657,447 $589,328 $354,239 $386,549 Net plant and equipment Total Total assets $880,181 $908,498 Total liabilities and owners' equity $880,181 $908,498 Suppose that the Bethesda Mining Company had sales of $2.186,873 and net income of $106,381 for the year ending December 31, 2014 Required Do not round intermediate calculations. Round you Calculate ROE using the Du Pont identity. answers to 2 decimal places (e.g., 32.16). Enter the profit margin and return on equity as percents.) Pro margin Total asset turnover Equity multiplier Return on equity References eBook & Resources 1:07 PM 11/2/2015Explanation / Answer
ROE = Profit Margin (Profit/Sales)*Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity)
= ($106,381÷$2,186,873)×($2,186,873÷$908,498)×($908,498÷$386,549)
= 4.86%×2.61 times×2.35 times
= 29.81%
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