The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 138,880 $ 118,000 Accounts receivable 74,000 90,000 Inventory 93,000 78,000 Investments 3,800 1,800 Long-term assets: Land 460,000 460,000 Equipment 770,000 650,000 Less: Accumulated depreciation (408,000 ) (248,000 ) Total assets $ 1,131,680 $ 1,149,800 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 97,600 $ 83,000 Interest payable 5,500 11,800 Income tax payable 7,500 4,800 Long-term liabilities: Notes payable 100,000 200,000 Stockholders' equity: Common stock 680,000 680,000 Retained earnings 241,080 170,200 Total liabilities and stockholders' equity $ 1,131,680 $ 1,149,800 Additional information for 2021: Net income is $70,880. Sales on account are $1,451,400. Cost of goods sold is $1,120,050. Required: 1. Calculate the following profitability ratios for 2021: (Round your answers to 1 decimal place.) 2. When we compare two companies, can one have a higher return on assets while the other has a higher return on equity? multiple choice Yes No

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The balance sheets for Plasma Screens Corporation and additional information are provided below.

PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020
	2021		2020
Assets
Current assets:
Cash	$	138,880		$	118,000
Accounts receivable		74,000			90,000
Inventory		93,000			78,000
Investments		3,800			1,800
Long-term assets:
Land		460,000			460,000
Equipment		770,000			650,000
Less: Accumulated depreciation		(408,000	)		(248,000	)
Total assets	$	1,131,680		$	1,149,800
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	97,600		$	83,000
Interest payable		5,500			11,800
Income tax payable		7,500			4,800
Long-term liabilities:
Notes payable		100,000			200,000
Stockholders' equity:
Common stock		680,000			680,000
Retained earnings		241,080			170,200
Total liabilities and stockholders' equity	$	1,131,680		$	1,149,800

Additional information for 2021:

Net income is $70,880.
Sales on account are $1,451,400.
Cost of goods sold is $1,120,050.

Required:
1. Calculate the following profitability ratios for 2021: (Round your answers to 1 decimal place.)

2. When we compare two companies, can one have a higher return on assets while the other has a higher return on equity?

multiple choice

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions