The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2024 and 2023 2024 2023 Assets Current assets: Cash $242,000 $130,000 Accounts receivable 98,000 102,000 Inventory 105,000 90,000 Investments 5,000 3,000 Long-term assets: Land 580,000 580,000 Equipment 890,000 770,000 Less: Accumulated depreciation (528,000) (368,000) Total assets $1,392,000 $1,307,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $109,000 $95,000 Interest payable 7,000 13,000 Income tax payable 9,000 6,000 Long-term liabilities: Notes payable 110,000 220,000 Stockholders' equity: Common stock 800,000 800,000 Retained earnings 357,000 173,000 Total liabilities and stockholders' equity $1,392,000 $1,307,000 Additional information for 2024: Net income is $184,000. Sales on account are $1,890,000. (All sales are credit sales.) Cost of goods sold is $1,394,250. Required: 1. Calculate the following profitability ratios for 2024: 2. When we compare two companies, can one have a higher return on assets while the other has a higher return on equity? 3. Calculate the following profitability ratios for 2024: (Round your answers to 1 decimal place.) Profitability Ratios a. Gross profit ratio 26.3selected answer correct % b. Return on assets 106.5selected answer incorrect % c. Profit margin 9.7selected answer correct % d. Asset turnover 1.4selected answer correct times e. Return on equity 106.5selected answer incorrect %
The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2024 and 2023 2024 2023 Assets Current assets: Cash $242,000 $130,000 Accounts receivable 98,000 102,000 Inventory 105,000 90,000 Investments 5,000 3,000 Long-term assets: Land 580,000 580,000 Equipment 890,000 770,000 Less: Accumulated depreciation (528,000) (368,000) Total assets $1,392,000 $1,307,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $109,000 $95,000 Interest payable 7,000 13,000 Income tax payable 9,000 6,000 Long-term liabilities: Notes payable 110,000 220,000 Stockholders' equity: Common stock 800,000 800,000 Retained earnings 357,000 173,000 Total liabilities and stockholders' equity $1,392,000 $1,307,000 Additional information for 2024: Net income is $184,000. Sales on account are $1,890,000. (All sales are credit sales.) Cost of goods sold is $1,394,250. Required: 1. Calculate the following profitability ratios for 2024: 2. When we compare two companies, can one have a higher return on assets while the other has a higher return on equity? 3. Calculate the following profitability ratios for 2024: (Round your answers to 1 decimal place.) Profitability Ratios a. Gross profit ratio 26.3selected answer correct % b. Return on assets 106.5selected answer incorrect % c. Profit margin 9.7selected answer correct % d. Asset turnover 1.4selected answer correct times e. Return on equity 106.5selected answer incorrect %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The
| PLASMA SCREENS CORPORATION | ||
| Balance Sheets | ||
| December 31, 2024 and 2023 | ||
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash | $242,000 | $130,000 |
| 98,000 | 102,000 | |
| Inventory | 105,000 | 90,000 |
| Investments | 5,000 | 3,000 |
| Long-term assets: | ||
| Land | 580,000 | 580,000 |
| Equipment | 890,000 | 770,000 |
| Less: |
(528,000) | (368,000) |
| Total assets | $1,392,000 | $1,307,000 |
| Liabilities and |
||
| Current liabilities: | ||
| Accounts payable | $109,000 | $95,000 |
| Interest payable | 7,000 | 13,000 |
| Income tax payable | 9,000 | 6,000 |
| Long-term liabilities: | ||
| Notes payable | 110,000 | 220,000 |
| Stockholders' equity: | ||
| Common stock | 800,000 | 800,000 |
| 357,000 | 173,000 | |
| Total liabilities and stockholders' equity | $1,392,000 | $1,307,000 |
Additional information for 2024:
- Net income is $184,000.
- Sales on account are $1,890,000. (All sales are credit sales.)
- Cost of goods sold is $1,394,250.
Required:
1. Calculate the following profitability ratios for 2024:
2. When we compare two companies, can one have a higher return on assets while the other has a higher return on equity?
3. Calculate the following profitability ratios for 2024: (Round your answers to 1 decimal place.)
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education