Companies in the tire manufacturing business use a lot of property, plant, and equipment. Tyrell Rubber and Tire Corporation and Maxwell Rubber and Tire Manufacturing are two of the leading manufacturers. In additiion, Maxwell also operates over 1,000 tire service center outlets. Tyrell Rubber & Tire Maxwell Rubber & Tire Sales $2,918 $15,585 Depreciation and depletion costs 185 950 Property, plant, and equipment (net of accumulated depreciation) 976 6,146 Total assets 2,633 16,982 Depreciation method Straight-line Straight-line Depletion method Units of production Units of production Estimated life of assets Buildings 10 to 40 years 3 to 45 years Machinery and equipment 2 to 14 years 3 to 40 years Net income $105 $875 Required Calculate depreciation costs as a percentage of sales for each company. Calculate property, plant, and equipment as a percentage of total assets for each company. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficiently? Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most
Companies in the tire manufacturing business use a lot of property, plant, and equipment. Tyrell Rubber and Tire Corporation and Maxwell Rubber and Tire Manufacturing are two of the leading manufacturers. In additiion, Maxwell also operates over 1,000 tire service center outlets. Tyrell Rubber & Tire Maxwell Rubber & Tire Sales $2,918 $15,585 Depreciation and depletion costs 185 950 Property, plant, and equipment (net of accumulated depreciation) 976 6,146 Total assets 2,633 16,982 Depreciation method Straight-line Straight-line Depletion method Units of production Units of production Estimated life of assets Buildings 10 to 40 years 3 to 45 years Machinery and equipment 2 to 14 years 3 to 40 years Net income $105 $875 Required Calculate depreciation costs as a percentage of sales for each company. Calculate property, plant, and equipment as a percentage of total assets for each company. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficiently? Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Companies in the tire manufacturing business use a lot of property, plant, and equipment. Tyrell Rubber and Tire Corporation and Maxwell Rubber and Tire Manufacturing are two of the leading manufacturers. In additiion, Maxwell also operates over 1,000 tire service center outlets.
| Tyrell Rubber & Tire | Maxwell Rubber & Tire | |
|---|---|---|
| Sales | $2,918 | $15,585 |
| 185 | 950 | |
| Property, plant, and equipment (net of |
976 | 6,146 |
| Total assets | 2,633 | 16,982 |
| Depreciation |
Straight-line | Straight-line |
| Depletion method | Units of production | Units of production |
| Estimated life of assets | ||
| Buildings | 10 to 40 years | 3 to 45 years |
| Machinery and equipment | 2 to 14 years | 3 to 40 years |
| Net income | $105 | $875 |
Required
- Calculate depreciation costs as a percentage of sales for each company.
- Calculate property, plant, and equipment as a percentage of total assets for each company.
- Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficiently?
- Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education