Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer ASAP, thank you! The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets:

Please answer ASAP, thank you! image text in transcribed
image text in transcribed
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 118 Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 23,000 190,000 340,000 9,000 562,000 830,000 $1,392,000 $ 250,000 350,000 600,000 $ 120,000 672,000 792,000 $1,392,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $2,200,000 Cost of goods sold 1,170,000 Gross margin 1,030,000 Selling and administrative expenses 640,000 Net operating income 390,000 Interest expense 38,500 Net income before taxes 351,500 Income taxes (30%) 105,450 Net income $ 246,050 Account balances at the beginning of the year were: accounts receivable, $150,000; and inventory, $330,000. All sales were on account. Assets at the beginning of the year totaled $1,020,000, and the stockholders' equity totaled $655,000 Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (ie, 01234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets 4. Return on equity 5. Financial Leverage

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions