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Given the financial statements for Jones Corporation and Smith Corporation: JONES CORPORATION Current Assets Liabilities Cash $ 21,400 Accounts payable $ 121,000 Accounts receivable 86,100
Given the financial statements for Jones Corporation and Smith Corporation:
JONES CORPORATION | |||||||
Current Assets | Liabilities | ||||||
Cash | $ | 21,400 | Accounts payable | $ | 121,000 | ||
Accounts receivable | 86,100 | Bonds payable (long term) | 89,700 | ||||
Inventory | 55,100 | ||||||
Long-Term Assets | Stockholders' Equity | ||||||
Gross fixed assets | $ | 526,000 | Common stock | $ | 150,000 | ||
Less: Accumulated depreciation | 151,300 | Paid-in capital | 70,000 | ||||
Net fixed assets* | 374,700 | Retained earnings | 106,600 | ||||
Total assets | $ | 537,300 | Total liabilities and equity | $ | 537,300 | ||
Sales (on credit) | $ | 1,803,000 |
Cost of goods sold | 760,000 | |
Gross profit | $ | 1,043,000 |
Selling and administrative expense | 333,000 | |
Depreciation expense | 53,300 | |
Operating profit | $ | 656,700 |
Interest expense | 8,300 | |
Earnings before taxes | $ | 648,400 |
Tax expense | 98,700 | |
Net income | $ | 549,700 |
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*Use net fixed assets in computing fixed asset turnover. Includes $16,200 in lease payments.
SMITH CORPORATION | |||||||
Current Assets | Liabilities | ||||||
Cash | $ | 37,000 | Accounts payable | $ | 83,800 | ||
Marketable securities | 10,200 | Bonds payable (long term) | 278,000 | ||||
Accounts receivable | 75,900 | ||||||
Inventory | 79,800 | ||||||
Long-Term Assets | Stockholders' Equity | ||||||
Gross fixed assets | $ | 566,000 | Common stock | $ | 75,000 | ||
Less: Accumulated depreciation | 259,500 | Paid-in capital | 30,000 | ||||
Net fixed assets* | 306,500 | Retained earnings | 42,600 | ||||
Total assets | $ | 509,400 | Total liabilities and equity | $ | 509,400 | ||
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*Use net fixed assets in computing fixed asset turnover.
SMITH CORPORATION | ||
Sales (on credit) | $ | 1,170,000 |
Cost of goods sold | 659,000 | |
Gross profit | $ | 511,000 |
Selling and administrative expense | 292,000 | |
Depreciation expense | 50,300 | |
Operating profit | $ | 168,700 |
Interest expense | 26,300 | |
Earnings before taxes | $ | 142,400 |
Tax expense | 54,900 | |
Net income | $ | 87,500 |
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Includes $16,200 in lease payments. a. Compute the following ratios. (Use a 360-day year. Do not round intermediate calculations. Input your profit margin, return on assets, return on equity, and debt to total assets answers as a percent rounded to 2 decimal places. Round all other answers to 2 decimal places.)
Answer is complete but not entirely correct Jones Corp Smith Corp Profit margin 30.49 % 7,48 Return on assets 102.31 % 17.18 % |(investments) Return on equity 168.31 59.28 % Receivable turnover 20.94 15.42 times times Average collection period days days 17.19 23.35 13.79 x Inventory turnover 8.26 x times times Fixed asset turnover 4.81 3.82 times times Total asset turnover 3.36 2,30 times times Current ratio 1.34 times 2.42 times Quick ratio Debt to total assets Times interest earned 0.89 times 1.47 times 54.57 % 16.70 % 5.42 times 78.12 x times 3,73 times Fixed charge coverage 27.13 times
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