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Consider the following financial data for Larry’s Computer Stores: Statement of Financial Position as of December 31, 2012 Cash & equivalents $ 94,500   Accounts payable $ 122,500 Receivables   202,500   Short-term bank note   162,500 Inventories   364,000   Accrued wages and taxes   110,500   Total current assets $ 661,000     Total short-term liab. $ 395,500         Long-term debt   418,000 Net fixed assets   468,500   Common equity   316,000 Total assets $ 1,129,500   Total liabilities & equity $ 1,129,500               Statement of Earnings for the Year Ended December 31, 2012 Sales revenue $ 450,000 Cost of merchandise sold   250,000 Gross profit $ 200,000 Operating expenses   97,500   Earnings before interest and taxes (EBIT) $ 102,500 Interest expense   46,500   Earnings before taxes (EBT) $ 56,000 Federal and state income taxes (45 percent)   25,200 Net earnings $ 30,800       Calculate Larry’s net profit margin.   a. 15.40%   b. 4.66%   c. 2.73%   d. 6.84%   e. 9.75%

Consider the following financial data for Larry’s Computer Stores: Statement of Financial Position as of December 31, 2012 Cash & equivalents $ 94,500   Accounts payable $ 122,500 Receivables   202,500   Short-term bank note   162,500 Inventories   364,000   Accrued wages and taxes   110,500   Total current assets $ 661,000     Total short-term liab. $ 395,500         Long-term debt   418,000 Net fixed assets   468,500   Common equity   316,000 Total assets $ 1,129,500   Total liabilities & equity $ 1,129,500               Statement of Earnings for the Year Ended December 31, 2012 Sales revenue $ 450,000 Cost of merchandise sold   250,000 Gross profit $ 200,000 Operating expenses   97,500   Earnings before interest and taxes (EBIT) $ 102,500 Interest expense   46,500   Earnings before taxes (EBT) $ 56,000 Federal and state income taxes (45 percent)   25,200 Net earnings $ 30,800       Calculate Larry’s net profit margin.   a. 15.40%   b. 4.66%   c. 2.73%   d. 6.84%   e. 9.75%

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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  1. Consider the following financial data for Larry’s Computer Stores:

    Statement of Financial Position as of December 31, 2012
    Cash & equivalents
    $
    94,500
    		   Accounts payable $
    122,500
    Receivables  
    202,500
    		   Short-term bank note  
    162,500
    Inventories  
    364,000
    		   Accrued wages and taxes  
    110,500
      Total current assets
    $
    661,000
    		     Total short-term liab. $
    395,500
            Long-term debt  
    418,000
    Net fixed assets  
    468,500
    		   Common equity  
    316,000
    Total assets
    $
    1,129,500
    		   Total liabilities & equity $
    1,129,500
                 
    Statement of Earnings for the Year Ended December 31, 2012
    Sales revenue
    $
    450,000
    Cost of merchandise sold  
    250,000
    Gross profit
    $
    200,000
    Operating expenses  
    97,500
      Earnings before interest and taxes (EBIT)
    $
    102,500
    Interest expense  
    46,500
      Earnings before taxes (EBT)
    $
    56,000
    Federal and state income taxes (45 percent)  
    25,200
    Net earnings
    $
    30,800
         

    Calculate Larry’s net profit margin.
      a.
    15.40%
      b.
    4.66%
      c.
    2.73%
      d.
    6.84%
      e.
    9.75%
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