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.)
|
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