Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31 . 2019, financial statements: At December 31, 2018, total assets were $254,600 and total stockholders' equity was $105,800. There were no changes in notes payable or paid-in capital during 2019. Required: a. The cost of services provided amount includes all operating expenses (selling. general, and administrative expenses) except depreciation expense. What do you suppose the primary reason was for management to separate depreciation from other operating expenses? From a conceptual point of view, should depreciation be considered a "cost" of providing services? b. Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construction Co.? To which specific balance sheet accounts should a financial analyst relate these expenses? c. Calculate the company's average income tax rate. (Hint: You must first determine the earnings before taxes:) e. Calculate the amount of total current assets. At December 31,2018 , total assets were $254,600 and total stockholders' equity was $105,800. There were no changes in notes payable or paid-in capital during 2019 Required: a. The cost of services provided amount includes all operating expenses (selling. general, and administrative expenses) except depreciation expense. What do you suppose the primary reason was for management to separate depreciation from other operating expenses? From a conceptual point of view, should depreciation be considered a "cost" of providing services? b. Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construetion Co.? To which specific balance sheet accounts should a financial analyst relate these expenses? c. Calculate the company's average income tax fate. (Hint You must first determine the carnings before taxes.) e. Calculate the amount of total current assets. f. Why doesn't the company have a Merchandise Inventory account? 9. Calculate the amount of working capital and the current ratio at December 31,2019 . Assess the company's overall liquidity. h. Calculate ROI (including margin and turnover) and ROE for the year ended December 31, 2019. i. Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (Hint: Do a T-account analysis of retained earnings.) Compute this question by entering your answers in the tabs below. The cost of services provided amount indudes all operating expenses (selling, general, and administrative expenses) except depreciation expen What do you suppose the primary reason was for management to separate depreciation from other operating expenses? The oaners of the fim would be intorested in knowing what the approximase "economict cost of fixed asset unilzascon is, because a substantial portion of the Firmis profts will need to be invelted in replacement machirey and equipment. The depreciation expendture does net aftoct the Enancial postion of Gerrard Construction Co Required: a. The cost of services provided amount includes all operating expenses (selling, general, and administrative expenses) except depreciation expense. What do you suppose the primary reason was for management to separate depreciation from other operating expenses? From a conceptual point of view, should depreciation be considered a "cost" of providing services? b. Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construction Co.? To which specific balance sheet accounts should a financial analyst relate these expenses? c. Calculate the company's average income tax rate. (Hint: You must first determine the earnings before taxes.) e. Calculate the amount of total current assets. f. Why doesn't the company have a Merchandise Inventory account? g. Calculate the amount of working capital and the current ratio at December 31,2019. Assess the company's overall liquidity. h. Calculate ROI (including margin and turnover) and ROE for the year ended December 31, 2019. i. Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (Hint: Do a T-account analysis of retained earnings.) Compute this question by entering your answers in the tabs below. From a conceptual point of view, should depreciation be considered a "cost" of providing services? i. Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (Hint: Do a T-account ar retained earnings.) Compute this question by entering your answers in the tabs below. Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construction Co.? (Select all that apply.) (Select all that apply.)
