13–505
207.
Data from Lheureux Corporation’s most recent balance sheet and the company’s income
statement appear below:
Year
2
Year
1
Total assets
$1,440
$1,480
Total liabilities
$400
$450
Total stockholders’
equity
$1,040
$1,030
Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)
$1,280
Cost of goods sold
850
Gross margin
430
Selling and administrative expense
355
Net operating income
75
Interest expense
18
Net income before taxes
57
Income taxes (30%)
17
Net income
$40
The debt-to-equity ratio at the end of Year 2 is closest to:
13–507
208.
Neef Corporation has provided the following financial data from its balance sheet and
income statement:
Year 2
Year 1
Total assets
$1,302,000
$1,330,000
Total
stockholders’
equity
$885,000
$880,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,420,000
Cost of goods sold
890,000
Gross margin
530,000
Operating expenses
493,000
Net operating income
37,000
Interest expense
17,000
Net income before taxes
20,000
Income taxes (35%)
7,000
Net income
$13,000
The company’s net profit margin percentage for Year 2 is closest to:
209.
Neef Corporation has provided the following financial data from its balance sheet and
income statement:
Year 2
Year 1
Total assets
$1,302,000
$1,330,000
Total
stockholders’
equity
$885,000
$880,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,420,000
Cost of goods sold
890,000
Gross margin
530,000
Operating expenses
493,000
Net operating income
37,000
Interest expense
17,000
Net income before taxes
20,000
Income taxes (35%)
7,000
Net income
$13,000
The company’s gross margin percentage for Year 2 is closest to:
13–510
210.
Neef Corporation has provided the following financial data from its balance sheet and
income statement:
Year 2
Year 1
Total assets
$1,302,000
$1,330,000
Total
stockholders’
equity
$885,000
$880,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,420,000
Cost of goods sold
890,000
Gross margin
530,000
Operating expenses
493,000
Net operating income
37,000
Interest expense
17,000
Net income before taxes
20,000
Income taxes (35%)
7,000
Net income
$13,000
The company’s return on total assets for Year 2 is closest to:
13–512
211.
Neef Corporation has provided the following financial data from its balance sheet and
income statement:
Year 2
Year 1
Total assets
$1,302,000
$1,330,000
Total
stockholders’
equity
$885,000
$880,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,420,000
Cost of goods sold
890,000
Gross margin
530,000
Operating expenses
493,000
Net operating income
37,000
Interest expense
17,000
Net income before taxes
20,000
Income taxes (35%)
7,000
Net income
$13,000
The company’s return on equity for Year 2 is closest to:
212.
Garrott Corporation’s total assets were $1,505,000 at the end of Year 2 and $1,520,000 at
the end of Year 1. Its total stockholders’ equity was $1,197,000 at the end of Year 2 and
$1,180,000 at the end of Year 1.
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,340,000
Cost of goods sold
830,000
Gross margin
510,000
Operating expenses
465,143
Net operating income
44,857
Interest expense
9,000
Net income before taxes
35,857
Income taxes (30%)
10,757
Net income
$25,100
The company’s net profit margin percentage for Year 2 is closest to:
213.
Garrott Corporation’s total assets were $1,505,000 at the end of Year 2 and $1,520,000 at
the end of Year 1. Its total stockholders’ equity was $1,197,000 at the end of Year 2 and
$1,180,000 at the end of Year 1.
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,340,000
Cost of goods sold
830,000
Gross margin
510,000
Operating expenses
465,143
Net operating income
44,857
Interest expense
9,000
Net income before taxes
35,857
Income taxes (30%)
10,757
Net income
$25,100
The company’s gross margin percentage for Year 2 is closest to:
214.
Garrott Corporation’s total assets were $1,505,000 at the end of Year 2 and $1,520,000 at
the end of Year 1. Its total stockholders’ equity was $1,197,000 at the end of Year 2 and
$1,180,000 at the end of Year 1.
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,340,000
Cost of goods sold
830,000
Gross margin
510,000
Operating expenses
465,143
Net operating income
44,857
Interest expense
9,000
Net income before taxes
35,857
Income taxes (30%)
10,757
Net income
$25,100
The company’s return on total assets for Year 2 is closest to:
215.
Garrott Corporation’s total assets were $1,505,000 at the end of Year 2 and $1,520,000 at
the end of Year 1. Its total stockholders’ equity was $1,197,000 at the end of Year 2 and
$1,180,000 at the end of Year 1.
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,340,000
Cost of goods sold
830,000
Gross margin
510,000
Operating expenses
465,143
Net operating income
44,857
Interest expense
9,000
Net income before taxes
35,857
Income taxes (30%)
10,757
Net income
$25,100
The company’s return on equity for Year 2 is closest to:
13–518
216.
Kearin Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$33,000
$100,000
Accounts receivable
281,000
250,000
Inventory
122,000
130,000
Prepaid expenses
68,000
80,000
Total current assets
504,000
560,000
Plant and equipment, net
1,016,000
980,000
Total assets
$1,520,000
$1,540,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$80,000
$100,000
Accrued liabilities
31,000
30,000
Notes payable, short term
56,000
70,000
Total current liabilities
167,000
200,000
Bonds payable
260,000
260,000
Total liabilities
427,000
460,000
Stockholders’ equity:
Common stock, $5 par value
500,000
500,000
Additional paid-in capital-common stock
70,000
70,000
Retained earnings
523,000
510,000
Total stockholders’ equity
1,093,000
1,080,000
Total liabilities & stockholders’ equity
$1,520,000
$1,540,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,300,000
Cost of goods sold
800,000
Gross margin
500,000
Operating expenses
448,692
Net operating income
51,308
Interest expense
19,000
Net income before taxes
32,308
Income taxes (35%)
11,308
Net income
$21,000
Dividends on common stock during Year 2 totaled $8,000. The market price of common
stock at the end of Year 2 was $2.02 per share.
The company’s net profit margin percentage for Year 2 is closest to:
13–520
217.
Kearin Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$33,000
$100,000
Accounts receivable
281,000
250,000
Inventory
122,000
130,000
Prepaid expenses
68,000
80,000
Total current assets
504,000
560,000
Plant and equipment, net
1,016,000
980,000
Total assets
$1,520,000
$1,540,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$80,000
$100,000
Accrued liabilities
31,000
30,000
Notes payable, short term
56,000
70,000
Total current liabilities
167,000
200,000
Bonds payable
260,000
260,000
Total liabilities
427,000
460,000
Stockholders’ equity:
Common stock, $5 par value
500,000
500,000
Additional paid-in capital-common stock
70,000
70,000
Retained earnings
523,000
510,000
Total stockholders’ equity
1,093,000
1,080,000
Total liabilities & stockholders’ equity
$1,520,000
$1,540,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,300,000
Cost of goods sold
800,000
Gross margin
500,000
Operating expenses
448,692
Net operating income
51,308
Interest expense
19,000
Net income before taxes
32,308
Income taxes (35%)
11,308
Net income
$21,000
Dividends on common stock during Year 2 totaled $8,000. The market price of common
stock at the end of Year 2 was $2.02 per share.
The company’s gross margin percentage for Year 2 is closest to:
13–522
218.
Kearin Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$33,000
$100,000
Accounts receivable
281,000
250,000
Inventory
122,000
130,000
Prepaid expenses
68,000
80,000
Total current assets
504,000
560,000
Plant and equipment, net
1,016,000
980,000
Total assets
$1,520,000
$1,540,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$80,000
$100,000
Accrued liabilities
31,000
30,000
Notes payable, short term
56,000
70,000
Total current liabilities
167,000
200,000
Bonds payable
260,000
260,000
Total liabilities
427,000
460,000
Stockholders’ equity:
Common stock, $5 par value
500,000
500,000
Additional paid-in capital-common stock
70,000
70,000
Retained earnings
523,000
510,000
Total stockholders’ equity
1,093,000
1,080,000
Total liabilities & stockholders’ equity
$1,520,000
$1,540,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,300,000
Cost of goods sold
800,000
Gross margin
500,000
Operating expenses
448,692
Net operating income
51,308
Interest expense
19,000
Net income before taxes
32,308
Income taxes (35%)
11,308
Net income
$21,000
Dividends on common stock during Year 2 totaled $8,000. The market price of common
stock at the end of Year 2 was $2.02 per share.
The company’s return on total assets for Year 2 is closest to:
13–524
219.
Kearin Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$33,000
$100,000
Accounts receivable
281,000
250,000
Inventory
122,000
130,000
Prepaid expenses
68,000
80,000
Total current assets
504,000
560,000
Plant and equipment, net
1,016,000
980,000
Total assets
$1,520,000
$1,540,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$80,000
$100,000
Accrued liabilities
31,000
30,000
Notes payable, short term
56,000
70,000
Total current liabilities
167,000
200,000
Bonds payable
260,000
260,000
Total liabilities
427,000
460,000
Stockholders’ equity:
Common stock, $5 par value
500,000
500,000
Additional paid-in capital-common stock
70,000
70,000
Retained earnings
523,000
510,000
Total stockholders’ equity
1,093,000
1,080,000
Total liabilities & stockholders’ equity
$1,520,000
$1,540,000
Income Statement—Year 2
For the Year Ended December 31, Year 2
Sales (all on account)
$1,300,000
Cost of goods sold
800,000
Gross margin
500,000
Operating expenses
448,692