(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2012 and 2013 and comment on the same.

Question

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Answer 1

Question

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

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Consolidation after Several Years On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022. Required Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2022. Enter numerical answers using all zeros (do not abbreviate in thousands or in…

Answer 2

Question

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

Expert Solution & Answer

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Answer 3

Question

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

Expert Solution & Answer

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Answer 4

Question

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

Answer 6

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

Answer 7

Chapter 13, Problem 2E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

Answer 8

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

Answer 9

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

Answer 10

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

Answer 11

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

Answer 12

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

Answer 13

To determine

(d)

Introduction:

Return on equity measures the effectiveness with which a company create profits using its assets. It is a part of the profitability ratio that measures the amount of profit that company earn with each dollar of shareholder’s equity.

To calculate:

The return on equity for 2013 and 2012 and comment on the same.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 13 - Prob. 1Q Ch. 13 - Prob. 2Q Ch. 13 - What is ratio analysis? Why is it useful? Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5Q Ch. 13 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2012 and 2013 and comment on the same.

Solution Summary: The author explains that gross profit percentage helps the company to compare gross margin to the net sales.

Videos

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

Want to see the full answer?

Chapter 13 Solutions

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2012 and 2013 and comment on the same.

Solution Summary: The author explains that gross profit percentage helps the company to compare gross margin to the net sales.

Videos

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2012 and 2013 and comment on the same.

(b) Introduction: Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue. To calculate: The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

(c) Introduction: Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets. To calculate: The fixed asset turnover ratio for 2013 and 2012 and comment on the same.

Want to see the full answer?

Chapter 13 Solutions

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2012 and 2013 and comment on the same.

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To calculate:

The net profit margin for 2012 and 2013 and compare company could control its operating expenses from 2012 to 2013.

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2013 and 2012 and comment on the same.