978-1133188797 Solution Manual Gibson_Ch08_SM_13e Part 3

subject Type Homework Help
subject Pages 9
subject Words 462
subject Authors Charles H. Gibson

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page-pf1
PROBLEM 8-11
Net
Profit
Retained
Earnings
Total
Stockholders’
Equity
a. A stock dividend is
declared and paid.
b. Merchandise is purchased
on credit.
c. Marketable securities are
sold above cost.
d. Accounts receivable are
collected.
e. A cash dividend is
declared and paid.
f. Treasury stock is
purchased and recorded
at cost.
g. Treasury stock is sold
above cost.
0
0
+
0
0
0
0
-
0
+
0
-
0
0
0
0
+
0
-
-
+
page-pf2
243
PROBLEM 8-12
a.
1.
Net Profit Margin
=
2011:
$72,700
=
7.42%
$980,000
2010:
$64,900
=
6.76%
$960,000
2009:
$57,800
=
6.15%
$940,000
2008:
$51,200
=
5.69%
$900,000
2007:
$44,900
=
5.10%
$880,000
2.
Total Asset Turnover
=
Net Sales
Average Total Assets
2011:
$980,000
=
1.14 times per year
($859,000 + $861,000)/2
2010:
$960,000
=
1.11 times per year
($861,000 + $870,000)/2
2009:
$940,000
=
1.08 times per year
($870,000 + $867,000)/2
2008:
$900,000
=
1.04 times per year
($867,000 + $863,000)/2
2007:
Cannot compute average assets.
page-pf3
Year-End Balance Sheet Figures Total Asset Turnover
2011:
$980,000
=
1.14 times per year
$859,000
2010:
$960,000
=
1.11 times per year
$861,000
2009:
$940,000
=
1.08 times per year
$870,000
page-pf4
Year-End Balance Sheet Figures Return on Assets
2011:
$72,700
=
8.46%
$859,000
2010:
$64,900
=
7.54%
$861,000
2009:
$57,800
=
6.64%
$870,000
page-pf5
246
5.
Operating Income Margin
=
Operating Income
Net Sales
2011:
$355,000 $240,000
=
11.73%
$980,000
2010:
$344,000 $239,000
=
10.94%
$960,000
2009:
$333,000 $238,000
=
10.11%
$940,000
2008:
$320,000 $239,000
=
9.00%
$900,000
2007:
$314,000 $235,000
=
8.98%
$880,000
6.
Operating Asset Turnover
=
Net Sales
Average Operating Assets
2011:
=
1.26 times per year
2010:
=
1.23 times per year
2009:
=
1.21 times per year
($870,000 $90,000 $867,000 $95,000)/2
2008:
$900,000
=
1.17 times per year
($867,000 $95,000 $863,000 $100,000)/2
2007:
Average assets cannot be computed.
page-pf6
Year-End Balance Sheet Figures Operating Asset Turnover
2011:
$980,000
=
1.26 times per year
$859,000 $80,000
2010:
$960,000
=
1.24 times per year
$861,000 $85,000
2009:
$940,000
=
1.21 times per year
$870,000 $90,000
page-pf7
2011:
$355,000 $240,000
=
14.76%
$859,000 $80,000
2010:
$344,000 $239,000
=
13.53%
$861,000 $85,000
2009:
$333,000 $238,000
=
12.81%
$870,000 $90,000
page-pf8
9.
Sales to Fixed Assets
=
Net Sales
Average Net Fixed Assets
2011:
$980,000
=
1.98
($500,000 + $491,000)/2
2010:
$960,000
=
1.97
($491,000 + $485,000)/2
page-pf9
250
10.
Return on Investment
=
Net Income Before Noncontrolling Interest and
Nonrecurring Items + [Interest Expense x (1 Tax Rate)]
Average (Long-Term Liabilities + Equity)
Average Balance Sheet Figures
2011:
$72,700 + $6,500(1 0.33)
=
11.58%
($859,000 $194,000 + $861,000 $195,500)/2
2010:
$64,900 + $6,700(1 0.34)
=
10.35%
($861,000 $195,500 + $870,000 $195,500)/2
2009:
$57,800 + $8,000(1 0.34)
=
9.37%
($870,000 $195,500 + $867,000 $195,000)/2
2008:
$51,200 + $8,100(1 0.30)
=
8.50%
($867,000 $195,000 + $863,000 $196,500)/2
2007:
Average long-term liabilities + equity cannot be computed.
Year-End Balance Sheet Figures Return on Investment
2011:
$72,700 + $6,500(1 0.33)
=
11.59%
$859,000 $194,000
2010:
$64,900 + $6,700(1 0.34)
=
10.42%
$861,000 $195,500
2009:
$57,800 + $8,000(1 0.34)
=
9.35%
$870,000 $195,500
2008:
$51,200 + $8,100(1 0.30)
=
8.46%
$867,000 $195,000
2007:
$44,900 + $11,000(1 0.34)
=
7.83%
$863,000 $196,500
page-pfa
251
11.
Return on Total Equity
=
Net Income Before Nonrecurring Items
Dividends on Redeemable Preferred Stock
Average Total Equity
Average Balance Sheet Figures
2011:
$72,700 $6,400
=
12.77%
($520,000 + $518,000)/2
2010:
$64,900 $6,400
=
11.33%
($518,000 + $515,000)/2
2009:
$57,800 $6,400
=
10.03%
($515,000 + $510,000)/2
2008:
$51,200 $6,400
=
8.38%
($510,000 + $559,000)/2
2007:
2011:
$72,700 $6,400
=
12.75%
$520,000
2010:
$64,900 $6,400
=
11.29%
$518,000
2009:
$57,800 $6,400
=
9.98%
$515,000
2008:
$51,200 $6,400
=
8.78%
$510,000
2007:
$44,900
=
8.03%
$559,000

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