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 %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:  

  1. Net income is $184,000.
  2. Sales on account are $1,890,000. (All sales are credit sales.)
  3. 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 %
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