A fire has destroyed many of the financial records of R. Son & Co. You are assigned to put together a financial report. You have found the return on equity to be 12% and the debt ratio was 0.40. What was the return on assets?

A fire has destroyed many of the financial records of R. Son & Co. You are assigned to put together a financial report. You have found the return on equity to be 12% and the debt ratio was 0.40. What was the return on assets?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 16EB: Birmingham Company has been in business for five years. Last year, it experienced rapid growth and...

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Raees Corporation experienced a fire on December 31, 2018, in which its financial record were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. December 31, 2018- December 31, 2017 Cash Rs. 30,000 - Rs. 10,000 Receivables (net) 73,000 -126,000 Inventory 200,000 - 180,000 Account Payable 50,000 - 90,000 Note Payable 30,000 - 60,000 Common Stock Rs. 100 Par 400,000- 400,000 Retained Earning 134,000 - 122,000 Additional Information: (1)The inventory turnover is 3.4 times (2)The return on common stockholder equity is 25%. (3)The receivables turnover is 8.8 times (4)The return on assets is 20% (5)Total assets at December 31, 2017 were Rs. 650,000 Required:Computer the following for Raaess Corporation (a) Cost of Goods Sold for 2018 (b)Net Sales (Credit) for 2018 (c) Net Income for 2018 (d) Total Assets at December 31, 2018
Birmingham Company has been in business for five years. Last year, it experienced rapid growth and hired a new accountant to oversee the physical assets and record acquisitions and depreciation. This year, the controller discovered that the accounting records were not in order when the new accountant took over, and a $3,000 depreciation entry was omitted resulting in depreciation expense being understated last year. How does the company make this type of correction and where is it reported?
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The Lux Company experiences the following unrelated events and transactions during Year 1. The company’s existing current ratio is 2:1 and its quick ratio is 1.2:1. Lux wrote off $5,000 of accounts receivable as uncollectible. A bank notifies Lux that a customer’s check for $411 is returned marked insufficient funds. The customer is bankrupt. The owners of Lux Company make an additional cash investment of $7,500. Inventory costing $600 is judged obsolete when a physical inventory is taken. Lux declares a $5,000 cash dividend to be paid during the first week of the next reporting period. Lux purchases long-term investments for $10,000. Accounts payable of $9,000 are paid. Lux borrows $1,200 from a bank and gives a 90-day, 6% promissory note in exchange. Lux sells a vacant lot for $20,000 that had been used in its operations. A three-year insurance policy is purchased for $1,500. Separately evaluate the immediate effect of each transaction on the company’s:…
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