P12-2 Analyzing Comparative Financial Statements by Using Percentages and Selected Ratios LO12-5, 12-6, 12-9 The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data: Statement of Earnings. Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst Year 2 $356,820* 294,100 62,720 42,850 19,870 8,190 Year 1 $300,000 246,000 54,000 38,200 15,800 6,300 $ 11,680 $ 9,500 $ 4,060 $ 8,000 14,290 17,000 41,410 50,050 $109,810 $ 14,320 $ 16,700 41,710 38,700 30,000 30,000 23,780 17,600 $109,810 $103,000 36,000 42,000 $103,000 One-third was credit sales. During Year 2, cash dividends amounting to $5,500 were declared and paid.
P12-2 Analyzing Comparative Financial Statements by Using Percentages and Selected Ratios LO12-5, 12-6, 12-9 The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data: Statement of Earnings. Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst Year 2 $356,820* 294,100 62,720 42,850 19,870 8,190 Year 1 $300,000 246,000 54,000 38,200 15,800 6,300 $ 11,680 $ 9,500 $ 4,060 $ 8,000 14,290 17,000 41,410 50,050 $109,810 $ 14,320 $ 16,700 41,710 38,700 30,000 30,000 23,780 17,600 $109,810 $103,000 36,000 42,000 $103,000 One-third was credit sales. During Year 2, cash dividends amounting to $5,500 were declared and paid.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:P12-2 Analyzing Comparative Financial Statements by Using Percentages and Selected Ratios LO12-5,
12-6, 12-9
The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data:
Statement of Earnings
Sales revenue
Cost of sales.
Gross margin
Operating expenses and interest expense
Earnings before income taxes.
Income tax expense
Net earnings
Statement of Financial Position
Cash
Accounts receivable (net)
Inventory
Property, plant, and equipment (net)
Current liabilities (no interest)
Non-current liabilities (10% interest)
Common shares (6,000 shares)
Retained earningst
Year 2
$356,820* $300,000
294,100
246,000
62,720
42,850
19,870
8,190
$ 11,680 $
$
4,060 $
14,290
41,410
50,050
$109,810
$ 14,320
41,710
Year 1
30,000
23,780
$109,810
54,000
38,200
15,800
6,300
9,500
8,000
17,000
36,000
42,000
$103,000
$ 16,700
38,700
30,000
17,600
$103,000
*One-third was credit sales.
+During Year 2, cash dividends amounting to $5,500 were declared and paid.
Transcribed Image Text:2-f. Return on assets. Assume that long-term debt increased to $41,710 in month 1 of year 2. (Round
intermediate calculations to 3 decimal places and percentage answer to 2 decimal places (i.e., 0.1243
should be entered as 12.43).)
Return on assets
2-g. Return on equity. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as
12.43).)
Return on equity
%
Financial leverage percentage
%
2-h. Financial leverage percentage. Did borrowing from creditors benefit shareholders? (Round
intermediate calculations and final answer to 2 decimal places.)
% Yes
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