PLEASE HELP WITH 9 THRU 11 Income Statement For Year Ended December 31, 2013 Sal

Question

PLEASE HELP WITH 9 THRU 11

Income Statement For Year Ended December 31, 2013 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes Net income $ 448,600 297.250 151,350 98,600 4,100 48,650 19,598 $ 29,052 CABOT CORPORATION Balance Sheet December 31, 2013 Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 10,000 8,400 29,200 4,500 32,150 2,650 153,300 $ 240,200 Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured $ 17,500 3,200 3,300 by mortgage on plant assets Common stock Retained earnings Total liabilities and equity 63,400 90,000 62,800 $ 240,200 Balances on December 31, 2012 Inventory Total assets Common stock Retained earnings $48,900 $ 189,400 $ 90,000 $ 22,748 Check figures Acid-test ratio Inventory turnover 2.2 7.3

Explanation / Answer

a. Average total assets = Opening balance + Closing balance / 2

b. Average stockholders'' equity is calculated as the total of common stock plus retained earnings for both the years divided by 2.

RATIOS FORMULA ANSWER (9) Total Assets turnover Sales / Average Total Assets 448,600 / 214,800 = 2.08 times (10) Return on total assets (Net Income before interest expense / Average total assets) * 100 (52,750 / 214,800) * 100 = 24.55% (11) Return on common stockholders'' equity (Net Income / Average stockholders'equity ) * 100 (29,052 / 132,774) * 100 = 21.88%

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