Question

In: Accounting

1 - On a common-sized income statement, 100% is the a.net income b.net cost of goods...

1 - On a common-sized income statement, 100% is the

a.net income

b.net cost of goods sold

c.sales

d.gross profit

2- The numerator of the return on total assets is

a.net income plus tax expense

b.net income plus interest expense

c.net income

d.net income minus preferred dividends

The purpose of an audit is to

a.determine whether or not a company is a good investment

b.determine whether or not a company complies with corporate social responsibility

c.determine whether or not a company is a good credit risk

d.render an opinion on the fairness of the statements

The price-earnings ratio on common stock is calculated as

a.earnings per share of common stock, divided by market price per share of common stock

b.dividends per share of common stock, divided by earnings per share on common stock

c.market price per share of common stock, divided by earnings per share on common stock

d.market price per share of common stock, divided by dividends per share of common stock

Solutions

Expert Solution

1. c Sales

This is because every other item except sales is shown as a percentage of sales, and sales is treated to be equal to 100%.

2. c Net Income

When we calculate return on total assets, then that return is on total assets, and not on any part of assets thus entire investment is considered in denominator, and therefore the return is also 100% that is net income, net of expenses and taxes but no appropriation on preference capital or equity capital is considered.

3. d.render an opinion on the fairness of the statements

The primary objective of audit is to assess whether the financial statements present true and fair view, of financial statements.

4. c.market price per share of common stock, divided by earnings per share on common stock

P/E Ratio is used to evaluate the price of a share in proportion to earnings in each period, or as to how much earnings are equivalent to the current market price or current value of share.

In computing price earning ratio, in numerator we put the market value of common stock per share,

In denominator we put the value of earnings per share. in this manner, price earning ratio is calculated.

ekkarill92 answered 10 months ago

Next > < Previous

Related Solutions

how do you prepare a common sized income statement?

What is the entry for the current year's taxes on a common-sized income statement?

Category Prior Year Current YearAccounts payable ??? ???Accounts receivable 320,715 397,400Accruals 40,500 33,750Additional paid in capital 500,000 541,650Cash 17,500 47,500Common Stock 94,000 105,000COGS 328,500 430,741.00Current portion long-term debt 33,750 35,000Depreciation expense 54,000 54,943.00Interest expense 40,500 41,875.00Inventories 279,000 288,000Long-term debt 339,876.00 398,606.00Net fixed assets 946,535 999,000Notes payable 148,500 162,000Operating expenses (excl. depr.) 126,000 162,524.00Retained earnings 306,000 342,000Sales 639,000 845,964.00Taxes 24,750 47,204.00What is the entry for the current year's taxes on a common-sized income statement?

What would cause changes in income taxes and interest expoense on a common sized income statement?

If a cost is a common cost of the segments on a segmented income statement, the...

If a cost is a common cost of the segments on a segmented income statement, the cost should: not be allocated to the segments. be excluded from the income statement. be treated as a product cost rather than as a period cost. be allocated to the segments on the basis of segment sales. . Anderson Corporation has two major business segments-North and South. In July, the North business segment had sales revenues of $220,000, variable expenses of $125,000, and traceable...

Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement The following data...

Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement The following data from the just completed year are taken from the accounting records of Mason Company: Sales .......................................... $524,000 Direct labor cost.................................. $70,000 Raw material purchases............................ $118,000 Selling expenses ................................. $140,000 Administrative expenses ........................... $63,000 Manufacturing overhead applied to work in process ...... $90,000 Actual manufacturing overhead costs ................. $80,000 Inventories Beginning of End of Year Year Raw materials.............. $7,000 $15,000 Work in process............ $10,000 $5,000...

1. Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several items are omitted from the...

1. Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December. On Company Off Company Materials inventory, December 1 $61,580 $80,670 Materials inventory, December 31 (a) 91,160 Materials purchased 156,410 (a) Cost of direct materials used in production 165,030 (b) Direct labor 232,160 181,510 Factory overhead 72,050 90,350 Total manufacturing costs incurred in December (b) 521,930 Total...

the computation of cost of goods manufactured on the income statement IS . (ASSUME THERE ARE...

the computation of cost of goods manufactured on the income statement IS . (ASSUME THERE ARE NO WORK-IN- PROCESS INVENTORY)

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and...

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. Tannenhill Company Electronics Industry Average Sales $1,060,000 100 % Cost of goods sold 699,600 69 Gross profit $360,400 31 % Selling expenses $212,000 18 % Administrative expenses 84,800 7 Total operating expenses $296,800 25 % Operating income $63,600 6 % Other income 21,200...

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and...

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. Tannenhill Company Electronics Industry Average Sales $2,240,000 100 % Cost of goods sold 1,478,400 71 Gross profit $761,600 29 % Selling expenses $448,000 16 % Administrative expenses 179,200 7 Total operating expenses $627,200 23 % Operating income $134,400 6 % Other revenue 44,800...

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and...

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages. Tannenhill Company Electronics Industry Average Sales $4,000,000 100.0 % Cost of goods sold (2,120,000) (60.0) Gross profit $1,880,000 40.0 % Selling expenses $(1,080,000) (24.0) % Administrative expenses (640,000) (14.0) Total operating expenses $(1,720,000) (38.0) % Operating income $160,000 2.0 % Other revenue and...

Subjects