Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 2, Problem 2.9P
Basic Elements of Financial Reports
Comparative income statements for Grammar Inc. are as follows:
Required
The president and management believe that the company performed better in 2016 than it did in 2015. Write the president’s letter to be included in the 2016 annual report. Explain why the company is financially sound and why shareholders should not be alarmed by the $20,000 loss in a year when operating revenues increased significantly.
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The financial statements for Tyler Toys, Inc. are shown in the popup window:
LOADING...
.
Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders?
Tyler Toys, Inc.
Income Statement for Years Ending December 31, 2013 and 2014
2014
2013
Revenue
$14,146,094
$13,567,551
Cost of goods sold
$-8,448,688
$-8,131,338
Selling, general, and administrative expenses
$-998,878
$-980,620
Depreciation
$-1,497,580
$-1,472,740
EBIT
$3,200,948
$2,982,853
Interest expense
$-376,634
$-354,060
Taxes
$-1,073,239
$-998,941
Net income
$1,751,075
$1,629,852
Right-click on the table and select Copy to Clipboard and then right-click the
highlighted texts in the popup dialogue box and select Copy in order to paste its…
The financial statements for Tyler Toys, Inc. are shown in the popup window:
LOADING...
.
Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders?
Tyler Toys, Inc.
Income Statement for Years Ending December 31, 2013 and 2014
2014
2013
Revenue
$14,147,690
$13,566,481
Cost of goods sold
$-8,447,054
$-8,131,319
Selling, general, and administrative expenses
$-998,405
$-981,658
Depreciation
$-1,498,619
$-1,472,478
EBIT
$3,203,612
$2,981,026
Interest expense
$-376,184
$-355,975
Taxes
$-1,074,423
$-997,519
Net income
$1,753,005
$1,627,532
Right-click on the table and select Copy to Clipboard and then right-click the
highlighted texts in the popup dialogue box and select Copy in order to paste its…
Chapter 2 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 2 - Read each definition below and write the number of...Ch. 2 - Prob. 2.1ECh. 2 - The Operating Cycle Two Wheeler Cycle Shop buys...Ch. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Current Ratio Baldwin Corp. reported the following...Ch. 2 - Classification of Assets and Liabilities Indicate...Ch. 2 - Selling Expenses and General and Administrative...Ch. 2 - Prob. 2.7ECh. 2 - Income Statement Ratio The income statement of...Ch. 2 - Statement of Retained Earnings Landon Corporation...
Ch. 2 - Components of the Statement of Cash Flows Identify...Ch. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Materiality Joseph Knapp, a newly hired accountant...Ch. 2 - Costs and Expenses The following costs are...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Statement of Cash Flows Colorado Corporation was...Ch. 2 - Basic Elements of Financial Reports Comparative...Ch. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Comparability and Consistency in Income Statements...Ch. 2 - Prob. 2.12AMCPCh. 2 - Prob. 2.1DCCh. 2 - Prob. 2.2DCCh. 2 - Analysis of Cash Flow for a Small Business...Ch. 2 - Prob. 2.4DCCh. 2 - The Expenditure Approval Process Roberto is the...Ch. 2 - Prob. 2.6DC
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