Please Show your work Use the following information for Questions 2-9 2015 46,00
ID: 2529991 • Letter: P
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Please Show your work
Use the following information for Questions 2-9 2015 46,000 50,000 128,000 136,000 18,00015,000 250,000 272.000 8,000 22,400 14,00015,400 146,000 192,000 24,00026,000 18,00018,400 124,000 150,000157,000 420,000447,000 66,00074,000 56,00071,000 136,000152,000 284,000 376.000 11,00021,000 Catego 2016 Accounts pavable Accounts receivable Accruals Additional paid in capital Cash Common Stock ( par value COGS Depreciation ezpense Interest expense Inventories Long-term debt Net fized assets Notes pavable ?7? erating ezpenses (excl. depr Retained earnings Sales laxes 2. Inventories in 2016 were $ a. 128,000 b. 130,000 c. 132,000 d. 134,000 e. 136,000 3. The entry for Current Liabilities on the 2016 common-sized balance sheet is % a. 18.56 b. 18.73 c. 18.90 d. 19.07 e. 19.34 4. The return on equity (ROE) in 2016 was % a. 10.50 b. 10.61 c. 10.72 d. 10.83 e. 11.06Explanation / Answer
By forming Common size balance sheet total liabilities accounted for 735400 . Total assets except inventory are 605400.Thus inventory will be 735400-605400= 130000
3. Current liability in 2016 are 139000. Total liabilities are 737400
So current liability/Total liability*100= 139000/735400*100=18.90%
4. Return on equity= net profit after tax/ equity*100
Sales: 376000
Less: Cogs 192000
Less: depreciation. 26000
Less: Interest. 18400
Less: operating exp. 71000
Less: tax. 21000
Net profit after tax. 47600
So return on equity= 47600/ 439400*100= 10.83%
Bal sheet as on 2016
Common stock. 15400
Add paid up cap. 272000
Retained earnings. 152000
Total equity. 439400
Long term debt. 157000
Current liability
Account payable 50000
Accruals. 15000
Notes payable. 74000
Total outside. 296000
liabilities(long+ cur)
Total liabilities. 735400
Cash. 22400
Account receivable. 136000
Inventory. (Bf) 130000
Total current assets. 288400
Fixed assets. 447000
Total assets. 735400
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