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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. Sales Depreciation and depletion costs Property, plant, and equipment (net of accumulated depreciation) Total assets Depreciation method Depletion method Estimated life of assets a. Depreciation expense b. Property, plant, and equipment Tyrell Rubber & Tire $2,888 172 968 2,630 Straight-line Units of production C. Which company appears to be using its assets most efficiently? d-1. Return-on-assets ratio d-2. Which company appears to be using its assets most efficiently? 10 to 40 years 2 to 14 years $98 Tyrell Rubber & Tire Buildings Machinery and equipment Net income Required a. Calculate depreciation costs as a percentage of sales for each company. b. Calculate property, plant, and equipment as a percentage of total assets for each company. c. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficient d. Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most efficiently? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 0.123 should be entered as 12.3).) % % Maxwell Rubber & Tire $15,555 900 % Straight-line Units of production Maxwell Rubber & Tire 6,086 16,952 % % % 3 to 45 years 3 to 40 years $825

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. Sales Depreciation and depletion costs Property, plant, and equipment (net of accumulated depreciation) Total assets Depreciation method Depletion method Estimated life of assets a. Depreciation expense b. Property, plant, and equipment Tyrell Rubber & Tire $2,888 172 968 2,630 Straight-line Units of production C. Which company appears to be using its assets most efficiently? d-1. Return-on-assets ratio d-2. Which company appears to be using its assets most efficiently? 10 to 40 years 2 to 14 years $98 Tyrell Rubber & Tire Buildings Machinery and equipment Net income Required a. Calculate depreciation costs as a percentage of sales for each company. b. Calculate property, plant, and equipment as a percentage of total assets for each company. c. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficient d. Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most efficiently? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 0.123 should be entered as 12.3).) % % Maxwell Rubber & Tire $15,555 900 % Straight-line Units of production Maxwell Rubber & Tire 6,086 16,952 % % % 3 to 45 years 3 to 40 years $825

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Sales Depreciation and depletion costs Property, plant, and equipment (net of accumulated depreciation) Total assets Depreciation method Depletion method Estimated life of assets Tyrell Rubber & Tire $2,888 172 968 2,630 Straight-line Units of production a. Depreciation expense b. Property, plant, and equipment C. Which company appears to be using its assets most efficiently? d-1. Return-on-assets ratio d-2. Which company appears to be using its assets most efficiently? 10 to 40 years 2 to 14 years $98 Buildings Machinery and equipment Net income Required a. Calculate depreciation costs as a percentage of sales for each company. b. Calculate property, plant, and equipment as a percentage of total assets for each company. c. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficiently? d. Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most efficiently? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 0.123 should be entered as 12.3).) Tyrell Rubber & Tire % % Maxwell Rubber & Tire $15,555 900 % Straight-line Units of production Maxwell Rubber & Tire 6,086 16,952 % % % 3 to 45 years 3 to 40 years $825
Transcribed Image Text: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. Sales Depreciation and depletion costs Property, plant, and equipment (net of accumulated depreciation) Total assets Depreciation method Depletion method Estimated life of assets Tyrell Rubber & Tire $2,888 172 968 2,630 Straight-line Units of production a. Depreciation expense b. Property, plant, and equipment C. Which company appears to be using its assets most efficiently? d-1. Return-on-assets ratio d-2. Which company appears to be using its assets most efficiently? 10 to 40 years 2 to 14 years $98 Buildings Machinery and equipment Net income Required a. Calculate depreciation costs as a percentage of sales for each company. b. Calculate property, plant, and equipment as a percentage of total assets for each company. c. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficiently? d. Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most efficiently? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 0.123 should be entered as 12.3).) Tyrell Rubber & Tire % % Maxwell Rubber & Tire $15,555 900 % Straight-line Units of production Maxwell Rubber & Tire 6,086 16,952 % % % 3 to 45 years 3 to 40 years $825
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