
1.
To identify: The total amount of asset invested in A Company and in G Company..
1.

Explanation of Solution
(a)
For A Company
The total asset invested in A Company is $290,479
As per the
Thus, the total amount of asset is $290,479.
(b)
For G Company
The total asset invested in G Company is $147,461
As per the accounting equation the asset will always equal to the sum of liabilities and equity. This equation represents that the assets are enough to pay the dues and to the shareholders. So the amount of asset invested in a company is $147,461.
Thus, the total amount of asset is $147,461.
2.
To compute: Return on asset of A Company and G Company.
2.

Explanation of Solution
(a)
Given,
Net income is $53,394 million.
Assets in the beginning of the year is $231,839 million
Assets at the end of the year is $290,479 million
The formula to calculate return on asset is,
Substitute $53,394 million for net income, $231,839 million for assets in the beginning, $290,479 million for assets at the end.
Hence, the return on asset of A Company is 20.4%.
(b)
Given,
Net income is $16,348 million.
Assets in the beginning of the year is $129,187 million
Assets at the end of the year is $147,461 million
The formula to calculate return on asset is,
Substitute $16,384 million for net income, $129,187 million for assets in the beginning, $147,461 million for assets at the end.
Hence, the return on asset of G Company is 11.8%.
3.
To compute: The total expenses of A Company and G Company.
3.

Explanation of Solution
(a)
Given,
Net income is $53,394 million.
Revenue is $233,715 million
The formula to calculate expenses is,
Substitute $53,394 million for net income and $233,715 million for revenues.
Hence, the expenses of A Company are $180,321 million.
(b)
Given,
Net income is $16,348 million.
Revenue is $74,989 million.
The formula to calculate expenses is,
Substitute $16,348 million for net income and $74,989 million for revenues.
Hence, the expenses of G Company are $58,641 million.
4.
To compare: The return on asset of A Company and G Company with their competitors.
4.

Explanation of Solution
(a)
The return on assert of A Company is more than to its competitors.
As the A Company return on asset is 20.4%, which is more than 10% the return on asset of competitors.
Thus, the performance of A Company is satisfactory.
(b)
The return on assert of G Company is more than to its competitors.
As the A Company return on asset is 11.8%, which is more than 10% the return on asset of competitors.
Thus, the performance of G Company is satisfactory.
5.
To Analyze: Analyze the performance of A Company and G Company.
5.

Explanation of Solution
The return on assets of A Company is 20.4% which is better than the competitor and the return on asset of G Company.
The return of asset of G Company is 11.8% which is better than the competitor.
Thus, the performance of A Company is better than the G Company.
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Chapter 1 Solutions
Financial and Managerial Accounting
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