Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 77E
To determine
Concept introduction:
Consolidated Accounting Statement: When a company is holding company of another than it is necessary for the holding company to prepare a consolidated financial statement with the subsidiary company.
Requirement 1:
To indicate:
Why income from operation decreased even if sales is increased.
To determine
Concept introduction:
Consolidated Accounting Statement: When a company is holding company of another than it is necessary for the holding company to prepare a consolidated financial statement with the subsidiary company.
Requirement 2:
To calculate:
The proportion of the resources invested in the various asset categories changed from 2017 to 2019.
To determine
Concept introduction:
Consolidated Accounting Statement: When a company is holding company of another than it is necessary for the holding company to prepare a consolidated financial statement with the subsidiary company.
Requirement 3:
To calculate:
Whether the proportion of capital supplied by creditors changed.
To determine
Concept introduction:
Consolidated Accounting Statement: When a company is holding company of another than it is necessary for the holding company to prepare a consolidated financial statement with the subsidiary company.
Requirement 4:
Source of capital to finance its increase in current assets in 2019.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Compare the following for the year 2019, 2020 and 2021 for the Acer Company:
analysis in words incl. total assets, short term assets, long-term assets, non-current assets, return on assets, equity, equity growth or decrease over the years, Price-Earning ratio, liabilities.
What is the Financial Performance and Financial Position for:-a. Liquidityb. Profitabilityc. Leverage
Prepare a financial statement analysis in terms of liquidity, solvency, profitability and efficiency of the following company.
Chapter 12 Solutions
Cornerstones of Financial Accounting
Ch. 12 - Describe how some of the primary groups of users...Ch. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - 12. Why are higher asset turnover ratios...Ch. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - Prob. 16DQCh. 12 - Which of the following use financial statement...Ch. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Which type of analysis compares a single...Ch. 12 - Which of the following types of analysis compares...Ch. 12 - Which of the following types of analysis is...Ch. 12 - Prob. 11MCQCh. 12 - Prob. 12MCQCh. 12 - Prob. 13MCQCh. 12 - Partial information from Fabray Companys balance...Ch. 12 - Hummel Inc. has $30,000 in current assets and...Ch. 12 - Prob. 16MCQCh. 12 - A firms quick ratio is typically computed as: a....Ch. 12 - Prob. 18MCQCh. 12 - Prob. 19MCQCh. 12 - Prob. 20MCQCh. 12 - Prob. 21MCQCh. 12 - Prob. 22MCQCh. 12 - Prob. 23MCQCh. 12 - When analyzing a companys debt to equity ratio,...Ch. 12 - Prob. 25MCQCh. 12 - Prob. 26MCQCh. 12 - Prob. 27MCQCh. 12 - Prob. 28MCQCh. 12 - Prob. 29MCQCh. 12 - Prob. 30MCQCh. 12 - Which of the following ratios is used to measure...Ch. 12 - Prob. 32MCQCh. 12 - Selected information for Berry Company is as...Ch. 12 - Which of the following ratios is used to measure a...Ch. 12 - Prob. 35MCQCh. 12 - Prob. 36MCQCh. 12 - Prob. 37MCQCh. 12 - Prob. 38MCQCh. 12 - Which of the following are not part of common...Ch. 12 - Prob. 40MCQCh. 12 - Prob. 41MCQCh. 12 - Prob. 42MCQCh. 12 - Which of the following is not included in the...Ch. 12 - When a Dupont analysis reveals that a company has...Ch. 12 - Prob. 45MCQCh. 12 - Cross Sectional Analysis Cross sectional analysis...Ch. 12 - Prob. 47CECh. 12 - Prob. 48CECh. 12 - Short-Term Liquidity Ratios Three ratios...Ch. 12 - Debt Management Ratios Selected data from the...Ch. 12 - Debt Management and Short-Term Liquidity Ratios...Ch. 12 - Asset Efficiency Ratios Selected financial...Ch. 12 - Profitability Ratios The following data came from...Ch. 12 - Prob. 54CECh. 12 - Prob. 55CECh. 12 - Prob. 56CECh. 12 - Prob. 57BECh. 12 - Prob. 58BECh. 12 - Prob. 59BECh. 12 - Short-Term Liquidity Ratios Larry, Curly, and Moe...Ch. 12 - Debt Management Ratios Glow Corporation provides...Ch. 12 - Debt Management and Short-Term Liquidity Ratios...Ch. 12 - Asset Efficiency Ratios Rumsford Inc.s financial...Ch. 12 - Prob. 64BECh. 12 - Profitability Ratios Tinker Corporation operates...Ch. 12 - Profitability Ratios Katrina Corp. is a publicly...Ch. 12 - Prob. 67BECh. 12 - Prob. 68ECh. 12 - Prob. 69ECh. 12 - Prob. 70ECh. 12 - Prob. 71ECh. 12 - Horizontal Analysis of Income Statements...Ch. 12 - Prob. 73ECh. 12 - Prob. 74ECh. 12 - Prob. 75ECh. 12 - Prob. 76ECh. 12 - Prob. 77ECh. 12 - Prob. 78ECh. 12 - Prob. 79ECh. 12 - Asset Efficiency Ratios Refer to financial...Ch. 12 - Prob. 81ECh. 12 - Prob. 82ECh. 12 - Prob. 83ECh. 12 - Prob. 84PSACh. 12 - Prob. 85PSACh. 12 - Prob. 86PSACh. 12 - A Using Common Size Statements The following...Ch. 12 - Prob. 88PSACh. 12 - Prob. 89PSACh. 12 - Prob. 90PSACh. 12 - A Comparing Financial Ratios Presented below are...Ch. 12 - A Preparation of Ratios Refer to the financial...Ch. 12 - Accounting Alternatives and Financial Analysis...Ch. 12 - Prob. 84PSBCh. 12 - Prob. 85PSBCh. 12 - Prob. 86PSBCh. 12 - Prob. 87PSBCh. 12 - Prob. 88PSBCh. 12 - Prob. 89PSBCh. 12 - Prob. 90PSBCh. 12 - Comparing Financial Ratios Presented below are...Ch. 12 - Prob. 92PSBCh. 12 - Problem 1 2-93B Accounting Alternatives and...Ch. 12 - Prob. 94CCh. 12 - Prob. 95.1CCh. 12 - Prob. 95.2CCh. 12 - Prob. 96.1CCh. 12 - Prob. 96.2CCh. 12 - Prob. 97.1CCh. 12 - Prob. 97.2CCh. 12 - Prob. 97.3CCh. 12 - Prob. 97.4CCh. 12 - Analyzing Growth Consolidated financial statements...Ch. 12 - Analyzing Growth Consolidated financial statements...Ch. 12 - Prob. 98.1CCh. 12 - Prob. 98.2CCh. 12 - Prob. 98.3CCh. 12 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT The...Ch. 12 - Prob. 99.2CCh. 12 - Prob. 99.3CCh. 12 - Prob. 99.4CCh. 12 - Prob. 99.5C
Knowledge Booster
Similar questions
- VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…arrow_forwardVII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Securities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 245,000 220,000 Operating Expenses: Fixed Assets 200,000 160,000 Selling Expenses 22,000 25,000 Total Assets P445,000…arrow_forward(A)Prepare ratio analyses (for 2019, 2018, and 2017) for both companies.You should include the following ratios in your computations: 1. Profitability ratios Gross Profit margin Profit margin Return on assets Return on equity 2. Productivity Inventory Turnover Accounts Receivable Turnover PPE Turnover Asset Turnover 3. Solvency Debt-to-equity Times interest earned Return on Financial leverage 4. Liquidity Current Ratio Quick Ratio Operating cash flow to current liabilities Working capitalarrow_forward
- Can you do 2022 income statement of this table? Statement of Profit or Loss and Other Comprehensive Income Presentation Currency Nature of Financial Statements Revenue Revenue from Finance Sector Operations Total Revenue Cost of Sales Cost of Finance Sector Operations Total Costs Gross Profit (Loss) from Commercial Operations Gross Profit (Loss) from Finance Sector Operations Gross Profit (Loss) Profit (Loss) From Operating Activities Profit (Loss) Before Financing Income (Expense) Profit (Loss) from Continuing Operations, Before Tax Profit (Loss) from Continuing Operations Profit (Loss) from Discontinued Operations Net Profit (Loss) Profit (Loss) Attributable To, Non- controlling Interests Profit (Loss) Attributable To, Owners of Parent Other Comprehensive Income (Loss) Total Comprehensive Income (Loss) Total Comprehensive Income Attributable To, Non-controlling Interests Total Comprehensive Income Attributable To, Owners of Parent 2020/12 1000TL Consolidated 21.529.210 37.824.578…arrow_forwardSome recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes SMOLIRA GOLF, INCORPORATED 2022 Income Statement Net income Dividends Retained earnings 2021 Short-term solvency ratios a. Current ratio b. Quick ratio c. Cash ratio Asset utilization ratios d. Total asset turnover e. Inventory turnover f. Receivables turnover Long-term solvency ratios g. Total debt ratio h. Debl-equity ratio. 1. Equity multiplier j. Times interest earned ratio $ 3,031 4,737 12,598 $20,366 $ 54,277 $ 74,643 SMOLIRA GOLF, INCORPORATED Balance Sheets as of December 31, 2021 and 2022 2022 Liabilities and Owners' Equity Current liabilities Accounts payable 2021 $ 188,570 126,803 5,273 $ 56,494 1,370 $ 55,124 19,293 $ 35,831 $ 11,965 23,866 times times times $ 3,007 5,721 13,722 $ 22,450 times times times $ 79,709…arrow_forwardSome recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes SMOLIRA GOLF, INCORPORATED 2022 Income Statement Net income Dividends Retained earnings 2021 Short-term solvency ratios a. Current ratio b. Quick ratio c. Cash ratio Asset utilization ratios d. Total asset turnover e. Inventory turnover f. Receivables turnover Long-term solvency ratios g. Total debt ratio h. Debt-equity ratio i. Equity multiplier j. Times interest earned ratio k. Cash coverage ratio Profitability ratios I. Profit margin m. Return on assets n. Return on equity $3,061 4,742 12,578 $ 20,381 SMOLIRA GOLF, INCORPORATED Balance Sheets as of December 31, 2021 and 2022 2022 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Other $ 52,746 $ 73,127 2021 $ 188,370 126, 703 5,283 $ 56,384…arrow_forward
- The DuPont equation shows the relationships among asset management, debt management, and -Select- ROE = Profit margin x Total assets turnover x Equity multiplier Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. -Select- Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%) Net income Income Statements: Dividends paid Addition to retained earnings Shares outstanding Price WACC 2019 $100 Ś 85 275 300 375 350 750 $ 735 2,000 1,490 $2,750…arrow_forwardCurrent Attempt in Progress Suppose selected comparative statement data for the giant bookseller Barnes & Noble are as follows. All balance sheet data are as of the end of the fiscal year (in millions). Net sales Cost of goods sold Net income Accounts receivable Inventory Total assets Total common stockholders' equity 2022 $5,050.3 3,700.7 65.1 65.0 1,250.1 2,950.1 940.6 2021 $5,800.9 3,200.1 190.9 106.6 1,350.1 3,250.1 1,100.5arrow_forwardUse the information provided from Sapphire Ltd calculate and comment on the following ratios:1. Profit margin2. Return on equityarrow_forward
- Prepare a financial statement analysis in terms of liquidity, solvency, profitability and efficiency of the following company. Financial Ratios Fiscal Year Ended Previous Fiscal Year Formula Dec 31, 2019 Dec 31, 2018 Liquidity Analysis Ratios: Current Assets / Current Liabilities Current Ratio or 1.46 1.36 Working Capital Ratio (Current Assets - Inventory - Prepayments) / Current Liabilities Quick Ratio 0.96 0.86 Solvency Ratio Total Assets / Total Liabilities 1.46 1.44 Financial Leverage Ratios Debt Ratio Total Debt/Total Assets 0.47 0.48 Total Debt/Total Stockholders Equity Debt-to-Equity Ratio 1.48 1.57 Earnings Before Interest and Taxes (EBIT) / Interest Charges Total Assets / Total Stockholders' Equity Interest Coverage 2.38 2.61 Asset to Equity Ratio 3.16 3.28 Profitability Ratios Gross Profit Margin Sales - Cost of Goods Sold or Cost of Service / Sales 19.76 19.43 Net Profit Margin Net Profit / Sales 11.34 11.42 Net Income / Total Assets 2.67 2.9 Return on Assets Net Income /…arrow_forwardIncome statement and balance sheet data for The Athletic Attic are provided below.Required: 1. Calculate the following risk ratios for 2021 and 2022: a. Receivables turnover ratio. c. Current ratio. b. Inventory turnover ratio. d. Debt to equity ratio. 2. Calculate the following profitability ratios for 2021 and 2022: a. Gross profit ratio. c. Profit margin. b. Return on assets. d. Asset turnover. 3. Based on the ratios calculated, determine whether overall risk and profitability improved from 2021 to 2022.arrow_forwardThe following selected information is for H55 Corporation: Total assets Total shareholders' equity Sales Cost of goods sold Net income. H55 had no preferred shares. ype here to search 2021 $357,000 $285,000 136.000 503.000 378.759 2020 32.695 97,500 394,000 276.982 29.944 2019 $267,000 48,500 297.000 181,000 20,400arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781305635937Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning