Profitability Ratios East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Fiscal Year 3 Fiscal Year 2 Net income Interest expense Fiscal Year 3 $144,900 Fiscal Year 2 3,000 Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total assets (at end of fiscal year) $1,994,704 $1,897,402 $1,677,598 Total stockholders' equity (at end of fiscal year) 1,037,937 1,017,383 737,911 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. 7.4 X % % $74,600 11,200 b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % %

Profitability Ratios East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Fiscal Year 3 Fiscal Year 2 Net income Interest expense Fiscal Year 3 $144,900 Fiscal Year 2 3,000 Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total assets (at end of fiscal year) $1,994,704 $1,897,402 $1,677,598 Total stockholders' equity (at end of fiscal year) 1,037,937 1,017,383 737,911 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. 7.4 X % % $74,600 11,200 b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % %

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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Through November, Cameron has received gross income of $130,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,730 of revenue at a cost to Cameron of $4,050, which is deductible for AGI. In contrast, engagement 2 will generate $7,100 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and he did not contribute to charity during the year. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Russell Department Stores, Inc. Income Statement Compared with Industry Average Year Ended December 31, 2018 Russell Industry Average Net sales revenue $780,000 100.0 % Cost of goods sold 524,940 65.8 Gross Profit 255,060 34.2 Operating Expenses 162,240 19.7 Operating Income 92,820 14.5 Other Expenses 7,800 0.4 Net Income 85,020 14.1 % MORE INFO: Russell/industry average Total Assets $480,000 100.0 % total Liabilities 327,360 64.7 total Liabilities and Stockholders' Equity $480,000 100.0 % SOLVE for % of total (round total to one decimal place x.x%) Amount Percent of total Net Sales Revenue 780,000 Cost of goods sold 524,940 gross profit 255,060 operating expenses 162240 operating income 92820 other expenses 7800
Long-Term Solvency Ratios Summary data from year-end financial statements of Palm Springs Company for the current year follow. Summary Income Statement Data Sales $10, 500, 600 Cost of goods sold 6, 050,000 Selling expenses 685,000 Administrative expenses 945,000 Interest expense 783, 500 Income tax expense 427,791 8,891,291 Net income $1,609,309 Summary Balance Sheet Data Cash $84, 700 Total liabilities $749,700 Noncash assets 885,500 Stockholders' equity 220, 500 Total assets $970, 200 Total liabilities and equity $970, 200 Round answers to one decimal place. a. Compute the ratio of times - interest - earned. Answer times b. Compute the debt-to-equity ratio. Answer
Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $541,800 $430,000 Cost of goods sold 458,800 370,000 Gross profit $83,000 $60,000 Selling expenses $24,360 $21,000 Administrative expenses 21,080 17,000 Total operating expenses $45,440 $38,000 Income before income tax $37,560 $22,000 Income tax expenses 15,000 8,800 Net income $22,560 $13,200 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales $541,800 $430,000 % Cost of goods sold 458,800 370,000 Gross profit $83,000 $60,000 % Selling expenses $24,360 $21,000 % Administrative expenses 21,080 17,000 % Total operating expenses…
Financial Ratios The financial statements for Jackson Enterprises (income statement, statement of owner’s equity, and balance sheet) are shown. Jackson EnterprisesIncome StatementFor Year Ended December 31, 20-- Revenue from sales: Sales $170,000 Less: Sales returns and allowances 10,000 Net sales $160,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $7,700 Estimated returns inventory, January 1, 20-- 1,300 $9,000 Purchases $92,900 Less: Purchases returns and allowances $1,862 Purchases discounts 1,828 3,690 Net purchases $89,210 Add: Freight-in 961 Cost of goods purchased 90,171 Goods available for sale $99,171 Less: Merchandise inventory, Dec. 31, 20-- $8,300 Estimated returns inventory, Dec. 31, 20-- 1,200 9,500 Cost of goods sold 89,671 Gross profit…
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Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $536,800 $440,000 Cost of merchandise sold 444,000 370,000 Gross profit $92,800 $70,000 Selling expenses $25,760 $23,000 Administrative expenses 22,800 19,000 Total operating expenses $48,560 $42,000 Income before income tax expense $44,240 $28,000 Income tax expenses 17,700 11,200 Net income $26,540 S16,800 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Increase Increase (Decrease) Previous year year (Decrease)
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Following is an incomplete current-year income statement. Determine Net Sales, Cost of goods sold and Net Income. Additional information follows: Return on total assets is 16% (average total assets is $80,000). Inventory turnover is 4 (average inventory is $5,000). Accounts receivable turnover is 7 (average accounts receivable is $6,000). Income Statement Net Sales Cost of goods sold Selling, general, and administrative expenses 7,100 Income tax expense 2,100 Net Income
Profitability Ratios East Point Retal, Inc. seils apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands): Fiscal Year 3 Fiscal Year 2 $145,000 $(74,600) 3,000 11,200 Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Net income (los) Interest expense Total assets (at and of fiscal year) Total stockholders equity (at end of fiscal year) Assume the apparel industry average return on total assets is 5.0% and the average return on stockholders' equity is 8.0% for the year ended February 2, Year 3. $1,307,759 1,010,000 Fiscal Year 3 Fiscal Year 2 $1,243,965 990,000 $1,106,719 724,942 a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on total assets. % b. Determine the retum on stockholders' equity for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus sign to…