Question

In: Accounting

Elements of the Income Statement for Hofstadter Experiments Ltd. follow: 2020 2019 Net Sales (all credit)...

Elements of the Income Statement for Hofstadter Experiments Ltd. follow:

2020

2019

Net Sales (all credit)

$1,498,000

$1,200,000

Cost of goods sold

1,043,000

820,000

Net Income

91,000

76,500

Highlights of the Balance Sheet:

2020

2019

Cash

$90,500

$64,700

Temporary Investments

75,000

60,000

Accounts receivable (net)

115,000

120,000

Inventories

264,000

283,000

Prepaid expenses

5,500

5,300

Total current liabilities

210,000

243,000

Total liabilities

310,000

443,000

Total common shareholders’ equity

829,500

787,500

Required:   (Round all answers to 2 decimal places).

  1. Calculate the gross profit rate for both 2019 and 2020.
  2. Did the gross profit rate improve or worsen from 2019 to 2020?
  3. What was the Accounts Receivable Turnover ratio for 2020?
  4. Explain what Accounts Receivable Turnover is in your own words.
  5. What was the Return on Common Shareholders’ Equity for 2020?
  6. What was the Current Ratio for 2020?
  7. Is the current ratio calculated in f) adequate?

Solutions

Expert Solution


Related Solutions

Elements of the Income Statement for Hofstadter Experiments Ltd. follow: 2020 2019 Net Sales (all credit)...
Elements of the Income Statement for Hofstadter Experiments Ltd. follow: 2020 2019 Net Sales (all credit) $1,498,000 $1,200,000 Cost of goods sold 1,043,000 820,000 Net Income 91,000 76,500 Highlights of the Balance Sheet: 2020 2019 Cash $90,500 $64,700 Temporary Investments 75,000 60,000 Accounts receivable (net) 115,000 120,000 Inventories 264,000 283,000 Prepaid expenses 5,500 5,300 Total current liabilities 210,000 243,000 Total liabilities 310,000 443,000 Total common shareholders’ equity 829,500 787,500 Required: (Round all answers to 2 decimal places). Calculate the gross...
THE CULLUMBER COMPANY LTD. Income Statement Year Ended December 31 2021 2020 Net sales $1,779,530 $1,819,610...
THE CULLUMBER COMPANY LTD. Income Statement Year Ended December 31 2021 2020 Net sales $1,779,530 $1,819,610 Cost of goods sold 1,091,290 1,028,920 Gross profit 688,240 790,690 Operating expenses 521,960 422,530 Profit from operations 166,280 368,160 Interest expense 25,650 18,630 Profit before income tax 140,630 349,530 Income tax expense 42,189 104,859 Profit $98,441 $244,671 THE CULLUMBER COMPANY LTD. Balance Sheet December 31 Assets 2021 2020 Current assets    Cash $112,631 $67,485    Accounts receivable 102,723 112,506    Inventory 141,460 123,690      Total current assets 356,814...
1. The four major elements of the income statement are: 2. The income statement reveals net...
1. The four major elements of the income statement are: 2. The income statement reveals net earnings (net income) of a firm for a period of time. Explain how “net earnings (net income) of a firm for a period of time” is different from each of the following descriptions: resources and equities of a firm at a point in time resources and equities of a firm for a period of time net earnings (net income) of a firm at a...
Income Statement 2019 Common Size Income Statement Details 2019 2018 Sales 30,000,000 Sales/Sales 100.00% 100.00% Less:...
Income Statement 2019 Common Size Income Statement Details 2019 2018 Sales 30,000,000 Sales/Sales 100.00% 100.00% Less: Cost of Goods Sold 21,000,000 Cost of Goods Sold/Sales 70.00% 65.90% Gross Profits 9,000,000 Gross Profits/Sales 30.00% 34.10% Less: Operating Expenses Less: Operating Expenses Selling Expense 3,000,000 Selling Expense/Sales 10.00% 12.70% General and Administrative Expenses 1,800,000 General and Administrative Expenses/Sales 6.00% 6.30% Lease Expense 200,000 Lease Expenses/Sales 0.67% 0.60% Depreciation Expense 1,000,000 Depreciation Expense/Sales 3.33% 3.60% Total Operating Expense 6,000,000 Total Operating Expense/Sales 20.00%...
1. Given:        2019 Sales = $213,346       2020 Sales = $292,969       2019 Operating Income...
1. Given:        2019 Sales = $213,346       2020 Sales = $292,969       2019 Operating Income = $106,282       2020 Operating Income = $179,533       2019 Net Income = $59,413       2020 Net Income = $81,936 Calculate DOL (Enter your answer with 2 decimal places.) 2. Total variable costs are $13,137, sales $57,179, and fixed costs $15,517. Calculate DOL. (Enter your answer with 2 decimal places) 3. Calculate the effective annual interest rate of foregoing the discount and paying on...
Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of...
Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of goods sold 605 Less: Depreciation 180 Earnings before interest and taxes 599 Less: Interest paid 80 Taxable income 519 Less: Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec. 350 425 Notes payable 390 370...
Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of...
Flamingo, Inc. 2019 statement of comprehensive income ($ in millions) Net sales $1,384 Less: Cost of goods sold 605 Less: Depreciation 180 Earnings before interest and taxes 599 Less: Interest paid 80 Taxable income 519 Less: Taxes 156 Net income $363 Addition to retained earnings $254 Dividends paid 109 Unit 2 Exercise Questions Flamingo, Inc. 2018 and 2019 Statement of financial positions ($ in millions) 2018 2019 2018 2019 Cash $100 $121 Accounts payable $400 $350 Accounts rec. 350 425...
SportsNet Corporation’s recent comparative balance sheet and income statement follow: Balance Sheets, December 31 2019 2020...
SportsNet Corporation’s recent comparative balance sheet and income statement follow: Balance Sheets, December 31 2019 2020 Assets Cash $ 51,200 $102,400 Accounts receivable   179,200 166,400 Allowance for doubtful accounts (19,200) (16,000) Other receivables (nontrade) 9,600 6,400 Inventory 96,000 102,400 Equipment 256,000 246,400 Accumulated depreciation (19,200) (16,000) Intangibles, net 176,000 169,600 Total assets $729,600 $761,600 Liabilities and Stockholders' Equity Accounts payable $160,000 $192,000 Income taxes payable 224,000 160,000 Interest payable 6,400 3,200 Bonds payable 102,400 — Discount on bonds payable (6,400)...
SAXTON COMPANY Income Statement For the Year Ended December 31, 2009 Sales (all on credit) ……………………………………………………………...
SAXTON COMPANY Income Statement For the Year Ended December 31, 2009 Sales (all on credit) …………………………………………………………… $ 4,000,000 Cost of Goods Sold…………………………………………………………………3,000,000 Gross Profit………………………………………………………………………….$ 1,000,000 Selling and Administrative Expenses……………………………………. 450,000 Operating Profit ……………………………………………………………………$ 550,000 Interest Expense…………………………………………………………………… 50,000 Extraordinary Loss…………………………………………………………………. 200,000 Earnings Before Taxes……………………………………………………………$ 300,000 Income Taxes (33%)………………………………………………………………. 100,000 Net Income…………………………………………………………………………….$ 200,000 SAXTON COMPANY Balance Sheet As of December 31, 2009 Assets Cash…………………………………………………………………………… $ 30,000 Accounts Receivable………………………………………………….. 350,000 Marketable Securities ……………………………………………….. 50,000 Inventory……………………………………………………………………. 370,000 Total Current Assets……………………………………………………. $ 800,000 Net Plant...
Adelphi Company has budgeted activity for March to reflect net income $165,000. All sales are credit...
Adelphi Company has budgeted activity for March to reflect net income $165,000. All sales are credit sales. Receivables are planned to increase (decrease -) by $27,000 payables to increase (decrease -) by $-17,000 and Depreciation Expense is $56,000. Use this information to determine how much cash will increase (decrease) during the month of March. (Decreases in accounts receivable or accounts payable will have a negative sign in front of number. Round & enter final answer to the nearest whole dollar.)
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT