Roger Corporation and Sean Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe-tracing devices. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the information shown on page 462.

Problems: Set A 461 Prepare entries to record transactions related to acquisition and amortization of intangibles; prepare the intangible assets section and note.

(SO 7, 8)

(c) Tot. intangibles $275,075 Prepare entries to correct errors in recording and amortizing intangible assets.

(SO 7)

Calculate and comment on return on assets, profit margin, and asset turnover ratio.

(SO 6)

Gate 462 CHAPTER 9 Reporting and Analyzing Long-Lived Assets Compute depreciation under different methods.

{SOi3) 9)

(a) Machine 2 $56,960 Compute depreciation under different methods.

(SOx), 9)

(a) Double-decliningbalance expense 2009

$26,250 Determine acquisition costs of land and building.

(SO 1)

Roger Corp. Sean Corp.

Net income $ 400,000 $ 500,000 Sales 1,300,000 1,200,000 Total assets (average) 3,300,000 2,900,000 Plant assets (average) 2,400,000 1,800,000 Intangible assets (goodwill) 300,000 0 Instructions

(a) For each company, calculate these values:

(1) Return on assets ratio.

(2) Profit margin.

(3) Asset turnover ratio.

(b) Based on your calculations in part (a), comment on the relative effectiveness of the two companies in using their assets to generate sales. What factors complicate your ability to compare the two companies?