C Not secure I ezto.mheducation.com/hm.tpx ONES CORPORATION Current Assets Liabi
ID: 2816359 • Letter: C
Question
C Not secure I ezto.mheducation.com/hm.tpx ONES CORPORATION Current Assets Liabilities Cash Accounts receivable nventory 3 127,000 Accounts payable 186 400 55.400 $ 136,000 81,600 Bonds payable (long term) Long-Term Assets Stockholders' Equity S 553.000 150 900 Common stock Pald-in capital $ 150,000 70,000 Gross fxed assets Less Net foced assets 402 100 Retained eanings 170 900T Total iabilities and equity $ 770.900 Total assebs Sales fon credin Cost of goods soid S 1,339.000 788.000 551 334000 Groas prof Selling and administrafive expense Depreciation expense Operating proft Interest expense Eamings befors taxes tax expense 300 Net income 53.300 "Use net fixed assets in computing fixed asset turnover tincudes 515 200 in lease payments SMITH CORPORATION Current Assets 5 40 Cash Mketabie securities Accounts cbe 5 76700 246 000 13 Long-Terrn Assets s Equity Gross d set 3 551 000 Ne fxed e here to searchExplanation / Answer
Answer:
For Jones Corporation:
Profit Margin = Gross Profit / Sales *100
Profit Margin = $551,000 / $1,339,000 * 100
Profit Margin = 41.15%
For Smith Corporation:
Profit Margin = Gross Profit / Sales *100
Profit Margin = $495,000 / $1,190,000 * 100
Profit Margin = 41.60%
Answer of Part A- 2:
For Jones Corporation:
Return on Assets (Investments) = Net Income/ Total Assets *100
Return on Assets (Investments) = $53,300 / $770,900 *100
Return on Assets (Investments) = 6.91%
For Smith Corporation:
Return on Assets (Investments) = Net Income/ Total Assets *100
Return on Assets (Investments) = $92,600 / $502,200 *100
Return on Assets (Investments) = 18.44%
Answer of Part A-3:
For Jones Corporation:
Shareholders Equity= Common stock + Paid in Capital + Retained Earning
Shareholders Equity = $150,000 + $70,000 + $333,300
Shareholders Equity = $553,300
Return on Equity = Net Income / Shareholders Equity
Return on Equity = $53,300 / $553,300
Return on Equity = 9.63%
For Smith Corporation:
Shareholders Equity= Common stock + Paid in Capital + Retained Earning
Shareholders Equity = $75,000 + $30,000 + $74,500
Shareholders Equity = $179,500
Return on Equity = Net Income / Shareholders Equiy
Return on Equity = $92,600 / $179,500
Return on Equity = 51.59%
Answer of Part A-4:
For Jones Corporation:
Receivable Turnover = Sales / Accounts Receivable
Receivable Turnover = $1,339,000 / $186,400
Receivable Turnover = 7.18 times
For Smith Corporation:
Receivable Turnover = Sales / Accounts Receivable
Receivable Turnover = $1,190,000 / $78,800
Receivable Turnover = 15.10 times
Answer of Part A-5:
For Jones Corporation:
Average Collection Period = 360 days / Receivable Turnover
Average Collection Period = 360 / 7.18
Average Collection Period = 50.14 days
For Smith Corporation:
Average Collection Period = 360 days / Receivable Turnover
Average Collection Period = 360 / 15.10
Average Collection Period = 23.84 days
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.