Supply the missing dollar amounts for the 2017 statement of earnings of Ultimate

Question

Supply the missing dollar amounts for the 2017 statement of earnings of Ultimate Style Company for each of the following independent cases:

Peter’s Curling Inc. operates several curling centres (for games and equipment sales). The following transactions occurred in the month of October.

(a) Peter’s collected $15,550 from customers for games played in October.

(b) Peter’s sold $10,550 in curling equipment inventory; received $6,700 in cash and the rest on account; cost of sales is $6,500.

(c) Peter’s received $4,700 from customers on account who purchased merchandise in September.

(d) The curling league gave Peter’s a deposit of $5,200 for the upcoming fall season.

(e) Peter’s paid $5,700 for the September electricity bill and received the October bill for $6,270 to be paid in November.

(f) Peter’s paid $7,700 to employees for work in October.

(g) Peter’s purchased $2,310 in insurance for coverage from October 1 to December 31.

(h) Peter’s paid $2,850 to plumbers for repairing a broken pipe in the washrooms.

E3-1 Inferring Statement of Earnings Values LO3-2 Supply the missing dollar amounts for the 2017 statement of earnings of Ultimate Style Company for each of the following independent cases Case A Case B Case C Case D Case E Sales revenue Selling expense Cost of sales Income tax expense Gross profit Earnings before income tax $ 1,100 900 610 180 480 80 430 550 90 280 410 40 540 110 50 550 270 200 210 260 150 150 90 130 Net earnings 60 90 References eBook & Resources Worksheet E3-1 Inferring Statement of Earnings Values LO3-2 Learning Objective: 03-02 Explain how business activities affect the elements of the statement of earnings heck my work

Explanation / Answer

Asset Turnover = Net Sales / Average Total Assets

Return on Assets = Net Earnings / Total Assets

2016 :-

Average Total Assets = (Opening Balance + Closing Balance)/2

= ($48000+$58000)/2

= $53000

Asset Turnover Ratio = 130000 / 53000 = 2.45 times

Return on Assets = $4000 / $58000 = 6.9%

2017 :-

Average Total Assets = (Opening Balance + Closing Balance)/2

= ($58000 + $68000)/2

= $63000

Assets Turnover Ratio = $140000 / $63000 = 2.22 times

Return on Assets = $5800 / $68000 = 8.53%

Particulars 2017 2016 Assets Turnover Ratio 2.22 2.45 Return on Assets 8.53% 6.9%

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