The following information of La Vie Limited and its competitor Mikie Limited isgiven below:Income Statements for the year ended 31 December 2023La Vie LimitedMikie Limited$00080,000(40,000)SalesCost of goods soldGross profitLess: Operating expensesNet Profit$000100,000(55,000)45,000(18,000)27,000Closing InventoryTrade receivablesCashExtract of the assets of both the companies are provided as at 31December 202340,000(12,000)28,000La Vie Limited Mikie Limited$000$00019,0006,0008,9203,280i. Gross Profit Margin.ii. Net Profit Margin.iii. Inventory Turnover Period.iv. Trade Receivables Collection Period.Required:a. Calculate the following ratios for both the companies:4,3001,015b. From the results of the ratios calculated in part (a) comment on the overallefficiency of the La Vie Limited and its competitor Mikie Limited.

Gross profit margin = ( Gross profit / Sales) × 100 Net profit margin = ( Net profit / Sales) × 100…

Answered: The following information of La Vie…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

In its income statement for the year ended December 31, 2022, Pharoah Company reported the following condensed data. Operating expenses Cost of goods sold Interest expense (a) (b) Prepare a single-step income statement. Revenues $776,000 1,236,000 72,000 Net Sales Interest revenue Loss on disposal of plant assets Net sales Pharoah Company Income Statement For the Year Ended December 31, 2022 69 $ 29,000 17,000 2,218,000 KNUT
The income statement of Sheridan Company is shown below. Sheridan Company Income Statement For the Year Ended December 31, 2025 Sales revenue $7,030,000 Cost of goods sold Beginning inventory $1,950,000 Purchases 4,600,000 Goods available for sale 6,550,000 Ending inventory 1,680,000 Cost of goods sold 4,870,000 Gross profit 2,160,000 Operating expenses Selling expenses 500,000 Administrative expenses 640,000 1,140,000 Net income $1,020,000 Additional information: 1. Accounts receivable decreased $330,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $270,000 during the year. 4. Accrued expenses payable decreased $120,000 during the year. 5. Administrative expenses include depreciation expense of $60,000. Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2025, for Sheridan Company, using the indirect method. (Show amounts that decrease cash flow…
The following information pertains to Peak Heights Company: Income Statement for Current Year Sales $ 85,300 Expenses Cost of goods $ sold 51,675 Depreciation 8,100 expense Salaries 12,000 71,775 expense Net income $ 13,525 Partial Balance Prior Sheet Current year year Accounts $ $ 9,900 receivable 14,400 Inventory 13,700 8,300 Salaries payable 1,550 850 Required: Present the operating activities section of the statement of cash flows for Peak Heights Company using the indirect method. Note: List cash outflows as negative amounts. PEAK HEIGHTS COMPANY Statement of Cash Flows (Partial) Cash flows from operating activities: Accounts receivable increase
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 Sales $ 562,795 2019 $ 299,200 338,803 Cost of goods sold Gross profit 191,488 223,992 107,712 Selling expenses 79,917 39,494 Administrative expenses 50,652 24,834 Total expenses 130,569 64,328 Income before taxes 93,423 43,384 Income tax expense 17,377 8,807 Net income $ 76,046 $ 34,577 KORBIN COMPANY Comparative Balance Sheets December 31 2021 2020 Assets Current assets $ 38,127 $ 56,965 0 Long-term investments 700 97,740 Plant assets, net Total assets 107,436 $164,401 $ 136,567 Liabilities and Equity Current liabilities $ 20,348 Common stock 68,000 $ 24,003 68,000 8,500 63,898 Other paid-in capital 8,500 Retained earnings 39,719 Total liabilities and equity $164,401 $ 136,567 2020 $431,147 273,778 157,369 59,498 37,941 97,439 59,930 12,286 $ 47,644 2019 $ 50,967 4,550 57,629 $ 113,146 $ 19,801 50,000 5,556 37,789 $113,146 4
Financial statements for Asklew Industries for 2021 are shown below (in thousands) 2021 Income Statement Net sales $ 8,900 Cost of goods sold (6,225) Gross profit 2,675 Operating expenses (2,025) Interest expense (170) Income tax expense (192) Net Income $ 288 Comparative Balance Sheets Dec. 31…
The following selected account balances were taken from Buckeye Company's general ledger at January 1, 2019 and December 31, 2022: Accounts receivable Inventory Sales revenue Cost of goods sold January 1 $126,000 $163,000 The following information was taken from Buckeye Company's 2022 income statement: Salaries expense Income tax expense Net income December 31 $139,000 131,000 $967,250 $429, 240 $211,390 $ 97,986 $228,634 Calculate the average number of days that elapse between Buckeye Company buying their inventory from suppliers and then selling the inventory to customers.
The Income statement for the year ended December 31, 20X6, for Total Inc. contains the following Information: Total Inc. Income Statement Year Ended December 31, 20X6 sale Cost of goods sold Gross Profit Operating Expenses Profit from Operations Income Tax Expense Profit $50,000 $30,000 $20,000 $15,000 $ 5,000 $ 3,000 $ 2,000 Total Inc. comparative balance sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation - equipment Total Assets Account Payable Long-term Notes Payable Common shares Retained Earnings Total Liabilities & Shareholders' Equity 20x6 $ 1,200 $ 300 $ 5,000 $12,000 $(4,000) $14,500 20x5 $ 1,000 $ 1,500 $ 3,000 $ 8,000 $(2,000) $11,500 $ 1,000 $ 2,000 $10,000 $ 1,500 $ $14,500 $ 3,500 $ $ 8,000 $11,500 Additional Information: 1. Operating expenses include depreciation expense of $2,500 2 Accounts Payable related to the purchase of Inventory 3. Equipment that cost $2,000 was sold for $1,500 cash 4. New equipment was purchased during the…
The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $70,910 $86,990 Accounts receivable (net) 108,960 117,270 Merchandise inventory 155,660 145,360 Prepaid expenses 6,340 4,400 Equipment 317,080 260,420 Accumulated depreciation-equipment (82,440) (63,870) Total assets $576,510 $550,570 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $121,070 $115,070 Mortgage note payable 0 165,170 Common stock, $1 par 19,000 12,000 Paid-in capital: Excess of issue price over par-common stock 260,000 155,000 Retained earnings 176,440 103,330 Total liabilities and stockholders’ equity $576,510 $550,570 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: Net income, $187,160. Depreciation…
The following financial information (in US$ millions) is for two major corporations for the three years ended December 31: PepsiCo., Inc. Net sales Cost of sales Profit for the year Inventory Coca-Cola Company Net sales Cost of sales Profit for the year Inventory (a) PepsiCo., Inc Inventory turnover Days sales in inventory Gross profit margin Coca-Cola Company Inventory turnover Days sales in inventory 2019 Gross profit margin $67,161 30,132 7,314 3,338 $37,266 14,619 8,920 3,379 2018 $64,661 29,381 12,515 3,128 $34,300 13,067 6,434 3,071 Calculate the inventory turnover, days sales in inventory, and gross profit margin for each company for 2019 and 2018. (Round days sales in inventory to 0 decimal places, e.g. 52 and all other answers to 2 decimal places, e.g. 52.75. Use 365 days for calculation.) 2019 2019 $63,525 % days times 2017 28,796 4,857 $36,212 % days times 2,947 13,721 1,248 2,655 2018 2018 times days % times days %
Based on the financial statement information of Monster Inc. in the following table, answer the following questions: Unit in Million US$ accounts receivable annual sales Cost of goods depreciation fixed assets inventory 2019 150 71 31 Start of 2019 52 222 91 End of 2019 59 275 106 1) Calculate the Fixed-asset turnover, Inventory turnover ratio and Days receivable of Monster Inc 0.87 0.63 72 2) Compare the above results with the following industry average information, comment on their implications in terms of efficiency of asset utilisation. Industry average (Unit 2019 in Million US$) Fixed-asset turnover Inventory turnover ratio Days receivable
Sunland Company reports the following: End of Year Beginning of Year Inventory $28000 $44800 Accounts Payable 33600 11200 If cost of goods sold for the year is $268800, the amount of cash paid to suppliers using the direct method is
ICE Drilling Inc.'s balance sheet information and income statement are as follows: ICE Drilling Inc. Income Statement For Year Ended December 31, 2020 Sales Cost of goods sold Gross profit Operating expenses: Depreciation expense Other expenses $1,111,800 561,000 550,800 $ 43,000 305,960 Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit 348,960 $ 201,840 11,680 $ 190,160 27,360 $ 162,800 ICE Drilling Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash $121,680 $172,640 Accounts receivable 146,600 112,160 Merchandise inventory 614,200 566,600 Prepaid expenses 12,050 15,000 Equipment 357,480 247,400 Accumulated depreciation 78,560 99,560 Accounts payable 196,610 259,440 Current notes payable 23,400 15,000 Notes payable 210,000 120,600 Common shares 451,800 351,000 Retained earnings 291,640 268,200 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is…

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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

SEE MORE TEXTBOOKS