Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement. Common-size Balance Sheet : It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet. Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business. Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue. Current Ratio : A part of liquidity ratios , current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company. Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets. 1. To Prepare: The common size income statement and balance sheet of R Company

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Earnings management is Select one: a. the process of profit maximization. b. the process of managing a business. c. manipulating income to meet a targeted earnings level. d. always fraudulent.

9 In order to measure fair value under IFRS13, an entity must determine Select one: a.the item being measured, and how the item could or would be used. b.the market the item would be (or is) bought and sold in. c.which fair value model is being used to value the item. d.all of the above

On January 1, 2020, Soft Kitty Ltd. sold land that cost $ 180,000 for $ 240,000, receiving a note bearing interest at 10 percent. The note will be paid in three annual instalments of $ 96,510 starting December 31, 2020. Assuming that collection of the note is very uncertain, how much revenue from this sale should Soft Kitty recognize in 2020? Select one: a. $24,000 b. $0 c. $18,000 d. $96,510

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Answer 6

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

Answer 7

Chapter 17, Problem P17.36BPGB

To determine

Common-size Income Statement: Income statement is a part of financial statements that reports the income and expenses of the business in an accounting period. When those income and expenses are not listed with actual amount but only as the percentage of total revenue than it is called common size income statement.

Common-size Balance Sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. When the assets, liabilities and shareholders’ fund are not listed with actual amount but only as the percentage of total assets than it is called common size balance sheet.

Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.

Profit Margin Ratio: Profit margin ratio reflects the portion of net income in the net sales. It is a profitability measure tool that is used to evaluate the net income a business earns on every dollar of net sales. It is computed as net income divided by net revenue.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis of financials of a company.

Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.

1.

To Prepare: The common size income statement and balance sheet of R Company

Answer 8

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

Answer 9

To determine

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

Answer 10

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

Answer 11

To determine

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

Answer 12

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

Answer 13

To determine

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

Answer 14

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Answer 15

To determine

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 17 - Prob. 1QC Ch. 17 - Prob. 2QC Ch. 17 - Prob. 3QC Ch. 17 - Prob. 4QC Ch. 17 - Prob. 5QC Ch. 17 - Prob. 6QC Ch. 17 - Prob. 7QC Ch. 17 - Prob. 8QC Ch. 17 - Prob. 9QC Ch. 17 - Prob. 10QC

Videos

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Want to see the full answer?

Chapter 17 Solutions

Videos

2. (a). To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

(b). To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

3. (a). To Compute: The current ratio of R Company for the year ended December 31, 2018.

(b). To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.

Want to see the full answer?

Chapter 17 Solutions

2.

(a).

To Compute: The gross profit percentage of R Company for the year ended December 31, 2018.

(b).

To Compute: The profit margin ratio of R Company for the year ended December 31, 2018.

3.

(a).

To Compute: The current ratio of R Company for the year ended December 31, 2018.

(b).

To Compute: The debt to equity ratio of R Company for the year ended December 31, 2018.