Calculating Average Operating Assets, Margin, Turnover, and Return on InvestmentEast Mullett Manufacturing earned operating income last year as shown in the following income statement:Sales$531,250Cost of goods sold280,000Gross margin$251,250Selling and administrative expense180,000Operating income$71,250Less: Income taxes (@ 40%)28,500Net income$42,750At the beginning of the year, the value of operating assets was $390,000. At the end of the year,the value of operating assets was $460,000.Required:For East Mullett Manufacturing, calculate the following:1. Average operating assets2. Margin (round to two decimal places)%3. Turnover (round to two decimal places)4. Return on investment (round to one decimal place)%

Formulas used in computation Average operating assets = beginning operating asset + Ending…

lanufacturing earned operating income last year as shown in the following income statement: $531,250 = sold 280,000 gin $251,250 dministrative expense 180,000 income $71,250 taxes (@ 40%) 28,500 $42,750 ng of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. tt Manufacturing, calculate the following: perating assets pund to two decimal places) % round to two decimal places) investment (round to one decimal place) %

lanufacturing earned operating income last year as shown in the following income statement: $531,250 = sold 280,000 gin $251,250 dministrative expense 180,000 income $71,250 taxes (@ 40%) 28,500 $42,750 ng of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. tt Manufacturing, calculate the following: perating assets pund to two decimal places) % round to two decimal places) investment (round to one decimal place) %

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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The following data were adapted from a recent income statement of Ansara Company for the year ended December 31: (in millions) Sales $18,840 Cost of goods sold $(16,010) Selling, administrative, and other expenses (1,700) Total expenses $(17,710) Operating income $1,130 Assume that $4,140 million of cost of goods sold and $940 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory $2,260 Ending inventory $2,640 Also, assume that 40% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Ansara Company. Round numbers to nearest million.
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Given the following information for Blue Bell Company for last year: Net sales (all on account) $5,200,000 Cost of goods sold 2,080,000 Interest expense 240,000 Income tax expense 280,000 Net income 420,000 Income tax rate 40% Total assets: January 1 $1,800,000 December 31 2,400,000 Shareholders' equity (all common): January 1 1,500,000 December 31 1,600,000 Current assets, December 31 700,000 Quick assets, December 31 400,000 Current liabilities, December 31 300,000 Net accounts receivable: January 1 200,000 December 31 180,000 Inventory: January 1 210,000 December 31 250,000 Refer to Exhibit 4-1. Blue Bell's return on common equity for the year was 27.1% 36.4% 26.3% 42.8%
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