financials:

question:

2019 2018 Assets Current Assets: Cash Accounts Receivable Inventory Supplies Prepaid Rent Total Current Assets Property, Plant and Equipment: Equipment Less: Accumulated Depreciation Property, Plant and Equipment, net Total Assets $475,326 28,355 436,200 85,321 20,322 1,045,524 $384,569 72,355 284,513 60,240 15,638 817,315 400,500 45,210 355,290 $1,400,814 332,680 35,291 297,389 $1,114,704 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Uneamed Revenue Income Taxes Payable Total Current Liabilities Long-term Debt Total Liabilities Stockholders' Equity Contributed Capital Retained Earings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 50,546 48,956 3,521 103,023 369,875 472,898 43,521 35,899 4,561 83.981 352,681 436,662 406,570 521,346 927 916 $1,400,814 320,000 358,042 678,042 $1,114,704 Sales Cost of Sales Gross Profit 2019 $1,000,825 528,690 472,135 2018 $886,972 452,388 434,584 Salaries and Wages Expense Rent Expense Depreciation Expense Other Operating Expenses Operating costs and Expenses Operating Income 90,320 40,500 38,652 35,217 204,689 267 446 89,520 32,040 29,569 28,980 180,109 254,475 523 623 Interest Income Interest Expense Income before Taxes Income Tax Expense Net Income 852 531 267,767 22,314 $245,453 254,375 12,513 $241.862 PART B: At the beginning of 2019, the Ohio Corporation added a new product line to its production and sales. Ohio's Balance Sheet and Income Statement are provided in the "Homework 4 Student Workbook" in the worksheet titled "Part B Financials." Required: Calculate the following ratios for both 2019 and 2018. Do not retype the amounts used in the ratios (instead refer to the appropriate cells from the provided balance sheet and income statement). Round your answers to 3 decimal places. In 2-3 sentences each, discuss your interpretation of the change in each ratio across the two years, considering the addition of a new product line. Put your answers in the worksheet titled Part B Answer." Use a textbox for your discussion of the ratios. a. Total Asset Turnover (Net Sales/Average Total Assets) b. Gross Profit Margin (Gross Profit/Net Sales) c. Net Profit Margin (Net Income/Net Sales) d. Return on Assets (ROA) (Net Income/Average Total Assets) Total assets were $700,000 on December 31, 2017. B. Below are 4 adjusting journal entries (AJES) that another firm, Wolverine, failed to make at year end. For each entry NOT MADE indicate the effect that each omitted AJE would have on the Wolverine's financial statements for the year ended 12/31/2019. Use O for overstated, U for understated, and NE for no effect. Organize your answer in tabular form, using the column headings shown below and provided in the worksheet titled "Part A, Question B." Example 0: At year end, Wolverine failed to make the below AJE to record that fact that employees earned $4,000 in wages which will be paid on the next payroll date in January 2019. Compensation Expense (+E-NI,-R/E-SE) 4,000 Salaries Payable (4L) 4,000 If that adjustment was not made expenses and liabilities would be understated by $4,000. If expenses are understated, then Net Income and Stockholders' Equity will be overstated. Adjusting entry Example 0 Income Statement Revenue Expense - Net Income NE 0 Balance Sheet Assets = Liabilities + Stockholders' Equity NEU o AJE #1: At year end, Wolverine failed to make the below AJE to record depreciation of $2,000. Depreciation Expense 2,000 Accumulated Depreciation 2,000 AJE 12: At year end, Wolverine failed to make the below AJE to record that Wolverine performed $3,000 in services in December that had been prepaid by the customer in November. Note that when the services were paid for in November, Wolverine increased (debited) cash and increased (credited) Unearned Service Revenue, a liability account. Unearned Revenue 3,000 Service Revenue 3,000 AJE #3: At year end, Wolverine failed to make the below AJE to record that Wolverine had some debt that had accrued interest of $400. Interest Expense 400 Interest Payable AJE #4: At year end, Wolverine failed to make the below AJE to recognize that a tenant owed Wolverine $1.000 rent for the month of December. The rent is due to Wolverine in January of 2019. 400 Rent Receivable 1,000 Rent Revenue 1,000