Chapter12: Capital Structure
Section: Chapter Questions
Problem 1PROB
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Question
Consider the following company’s balance sheet and income statement
-
Return on assets . -
Return on equity .
![Balance Sheet
Assets
Liabilities and Equity
Cash
$ 4,000
Accounts payable
$ 30,000
Accounts
Notes
payable
Total current
receivable
52,000
40,000
12,000
Inventory
liabilities
42,000
36,000
Total current
Long-term debt
assets
96,000
Equity
Total liabilities
Fixed assets
44,000
62,000
Total assets
$140,000
and equity
$140,000
Income Statement
Sales (all on credit)
S200,000
Cost of goods sold
Gross margin
Selling and administrative expenses
130,000
70,000
20,000
Depreciation
8,000
EBIT
42,000
Interest expense
4,800
Earnings before tax
37,200
Таxes
11,160
Net income
S 26,040](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F928706c3-2e5f-4731-821d-e3ed63422bfa%2F85ba0920-b5ea-4aed-9c30-3e6f4366cef2%2F586xbbi_processed.png&w=3840&q=75)
Transcribed Image Text:Balance Sheet
Assets
Liabilities and Equity
Cash
$ 4,000
Accounts payable
$ 30,000
Accounts
Notes
payable
Total current
receivable
52,000
40,000
12,000
Inventory
liabilities
42,000
36,000
Total current
Long-term debt
assets
96,000
Equity
Total liabilities
Fixed assets
44,000
62,000
Total assets
$140,000
and equity
$140,000
Income Statement
Sales (all on credit)
S200,000
Cost of goods sold
Gross margin
Selling and administrative expenses
130,000
70,000
20,000
Depreciation
8,000
EBIT
42,000
Interest expense
4,800
Earnings before tax
37,200
Таxes
11,160
Net income
S 26,040
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