Financial Accounting
5th Edition
ISBN: 9781618531650
Author: Thomas Dyckman
Publisher: Cambridge Business Publishers
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 20ME
a
To determine
Compute Company H’s net income for the year 2015.
b
To determine
Identify whether the net income for the year 2015 will change in the given situation. Explain.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Gibson Corporation’s balance sheet indicates that the company has $580,000 invested in operating assets. During 2018, Gibson earned operating income of $67,280 on $1,160,000 of sales.
Required
Compute Gibson’s profit margin for 2018.
Compute Gibson’s turnover for 2018.
Compute Gibson’s return on investment for 2018.
Use the data from the following financial statements in the popup window,
LOADING...
.
The company paid interest expense of
$17,800
for
2017
and had an overall tax rate of
40%
for
2017.
Find the cash flow from assets for
2017,
and break it into its three parts: operating cash flow, capital spending, and change in net working capital.
Partial Income Statement Year Ending 2017
Sales revenue
$349,900
Cost of goods sold
$141,900
Fixed costs
$43,000
Selling, general, and administrative expenses
$28,200
Depreciation
$45,900
(Click on the following icon
in order to copy its contents into a spreadsheet.)
Partial Balance Sheet 12/31/2016
ASSETS
LIABILITIES
Cash
$15,900
Notes payable
$13,800
Accounts receivable
$28,200
Accounts payable
$19,000
Inventories
$47,900
Long-term debt
$189,800
Fixed assets
$368,000
OWNERS' EQUITY
Accumulated depreciation
$141,900
Retained…
Fanning Corporation's balance sheet indicates that the company has $550,000 invested in operating assets. During 2018, Fanning earned operating income of $60,500 on $1,100,000 of sales. Required a. Compute Fanning's profit margin for 2018. b. Compute Fanning's turnover for 2018. c. Compute Fanning's return on investment for 2018
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MCCh. 2 - Prob. 4MCCh. 2 - Prob. 5MCCh. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - Prob. 3QCh. 2 - Prob. 4QCh. 2 - Prob. 5Q
Ch. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14MECh. 2 - Prob. 15MECh. 2 - Prob. 16MECh. 2 - Prob. 17MECh. 2 - Prob. 18MECh. 2 - Prob. 19MECh. 2 - Prob. 20MECh. 2 - Prob. 21MECh. 2 - Prob. 22MECh. 2 - Prob. 23MECh. 2 - Prob. 24MECh. 2 - Prob. 25MECh. 2 - Prob. 26MECh. 2 - Prob. 27MECh. 2 - Prob. 28MECh. 2 - Prob. 29MECh. 2 - Prob. 30MECh. 2 - Prob. 31MECh. 2 - Prob. 32MECh. 2 - Prob. 33MECh. 2 - Prob. 34ECh. 2 - Prob. 35ECh. 2 - Prob. 36ECh. 2 - Prob. 37ECh. 2 - Prob. 38ECh. 2 - Prob. 39ECh. 2 - Prob. 40ECh. 2 - Prob. 41ECh. 2 - Prob. 42ECh. 2 - Prob. 43ECh. 2 - Prob. 44ECh. 2 - Prob. 45ECh. 2 - Prob. 46ECh. 2 - Prob. 47ECh. 2 - Prob. 48ECh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Prob. 54PCh. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Prob. 61PCh. 2 - Prob. 62PCh. 2 - Prob. 63PCh. 2 - Prob. 64PCh. 2 - Prob. 65PCh. 2 - Prob. 66PCh. 2 - Prob. 67PCh. 2 - Prob. 68PCh. 2 - Prob. 69PCh. 2 - Prob. 70PCh. 2 - Prob. 71CPCh. 2 - Prob. 72CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Use the following tables to answer the question: LOGIC COMPANY Income Statement For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Gross sales 19,800 15,600 Sales returns and allowances 900 100 Net sales 18,900 15,500 COGS 11,800 8,800 Gross profit 7,100 6,700 Depreciation 780 640 Selling and administrative expenses 2,800 2,400 Research 630 540 Miscellaneous 440 340 Total operating expenses 4,650 3,920 Income before interest and taxes 2,450 2,780 Interest expense 640 540 Income before taxes 1,810 2,240 Provision for taxes 724 896 LOGIC COMPANY Balance Sheet For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Current assets 12,300 9,400 Accounts receivable 16,900 12,900 Merchandise inventory 8,900 14,400 Prepaid expenses 24,400 10,400 Total current assets 62,500 47,100 Building (net) 14,900 11,400 Land 13,900 9,400 Total plant and equipment 28,800 20,800 Total assets 91,300 67,900 Accounts payable 13,400 7,400 Salaries payable 7,500 5,400 Total current…arrow_forwardGiven the income statement below, Mega Trade Inc. wants to find the resulting net income for the year 2016 (in million). What is the right amount? Income Statement ($ Million) YEAR END YEAR END YEAR END YEAR END 2015 2016 2017 2018 Sales 1,234.90 1,251.70 1,300.40 1,334.40 Cost Sales -679.1 -659 -681.3 -667 Gross Operating Income Selling & Administration -339.7 -348.6 -351.2 -373.3 Depreciation -47.5 -52 -55.9 -75.2 Other Income/Expenses 11.8 7.6 7 8.2 Earnings Before Interest and Taxes Interest Income 1.3 1.4 1.7 2 Interest Expense -16.2 -15.1 -20.5 -23.7 Pre Tax Income Income Taxes -56.8 -64.2 -67.5 -72.6 Net Income Dividends -38.3 -38.7 -39.8 -40.1arrow_forwardGiven the income statement below, Mega Trade Inc. wants to find the resulting net income for the year 2018 (in million). What is the right amount? Income Statement ($ Million) Year End 2015 2016 2017 2018 Sales 1,234.90 1,251.70 1,300.40 1,334.40 Cost of Sales -679.1 -659 -681.3 -667 Selling & Administration -339.7 -348.6 -351.2 -373.3 Depreciation -47.5 -52 -55.9 -75.2 Other Income/Expenses 11.8 7.6 7 8.2 Interest Income 1.3 1.4 1.7 2 Interest Expense -16.2 -15.1 -20.5 -23.7 Income Taxes -56.8 -64.2 -67.5 -72.6 Dividends -38.3 -38.7 -39.8 -40.1 CHOICES: A. 108.7B. 132.7C. No choice givenD. 132.8E. 121.8arrow_forward
- In the income statement below, ABC Trade Inc. wants to find the resulting net income for the year 2018 (in million). What is the right amount? Income Statement ($ Million) Year End 2015 2016 2017 2018 Sales 1,234.90 1,251.70 1,300.40 1,334.40 Cost of Sales (679.10) (659.00) (681.30) (667.00) Gross Operating Income Selling & Administration (339.70) (348.60) (351.20) (373.30) Depreciation (47.50) (52.00) (55.90) (75.20) Other Income/Expenses 11.80 7.60 7.00 8.20 Earnings Before Interest and Taxes Interest Income 1.30 1.40 1.70 2.00 Interest Expense (16.20) (15.10) (20.50) (23.70) Pre Tax Income Income Taxes (56.80) (64.20) (67.50) (72.60) Net Income Dividends (38.30) (38.70) (39.80) (40.10) Addition to Retained Earnings Group of answer choices 121.8 108.7 132.7 132.8 No choice givenarrow_forwardSuppose the 2017 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.40 billion at the beginning of the year and $3.54 billion at the end of the year. Compute 3M Company's receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.) times Accounts receivable turnover ratio SHOW LIST OF ACCOUNTS LINK TO TEXT INTERACTIVE TUTORIAL Compute 3M Company's average collection period for accounts receivable in days. (Round answer to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Average collection period daysarrow_forwardThe following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015: Income Statement Sales (net) $ 245,675 Cost of Goods Sold (67,500) Gross Profit $ 178,175 Operating expenses (125,000) Operating Income $ 53,175 Interest revenue 5,600 Interest expense (8,750) Income before taxes $ 50,025 Income tax expense (15,008) Net Income $ 35,017 Refer to Exhibit 5-2. Compute net profit margin for Peace, Love, and Joy Company. A20.36% B29.84% C14.25% D23.92%arrow_forward
- Using the information provided, what is the length of the production cycle for the firm? Allied Industries, Inc. Selected Income Statement Items, 2017 Cash Sales $1,500,000 Credit Sales $7,500,000 Total Sales $9,000,000 COGS $6,000,000 Allied Industries, Inc. Selected Balance Sheet Accounts 12/31/201712/31/2016Change Accounts Receivable $270,000 $240,000 $30,000 Inventory $125,000 $100,000 $25,000 Accounts Payable $110,000 $90,000 $20,000arrow_forwardThe following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015: Income Statement Sales (net) $ 245,675 Cost of Goods Sold (67,500) Gross Profit $ 178,175 Operating expenses (125,000) Operating Income $ 53,175 Interest revenue 5,600 Interest expense (8,750) Income before taxes $ 50,025 Income tax expense (15,008) Net Income $ 35,017 Refer to Exhibit 5-2. Compute earnings-based interest coverage for Peace, Love, and Joy Company. 6.72 times 5.72 times 16.88 times 6.08 timesarrow_forwardThe following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015: Income Statement Sales (net) $ 245,675 Cost of Goods Sold (67,500) Gross Profit $ 178,175 Operating expenses (125,000) Operating Income $ 53,175 Interest revenue 5,600 Interest expense (8,750) Income before taxes $ 50,025 Income tax expense (15,008) Net Income $ 35,017 Refer to Exhibit 5-2. Compute operating margin for Peace, Love, and Joy Company. 20.36% 21.64% 19.65% 14.25%arrow_forward
- During 2021, Blossom Inc. has the following account balances in Income Statement: Sales 1,630,245 Cost of Sales 646,788 Selling Expense 235,500 Administrative Expense 114,766 Other Expense 57,146 Income Tax Expense 200,400 Other Revenue 65,800 What will be the Net income?arrow_forwardThe 2017 annual report of Tootsie Roll Industries contains the following information. (in millions) December 31, 2017 0000 December 31, 2016 Total assets $930.9 $920.1 Total liabilities 197.1 208.6 Net sales 515.7 517.4 Net income 80.7 67.2 Instructions Compute the following ratios for Tootsie Roll for 2017. a. Asset turnover. b. Return on assets. c. Profit margin on sales. d. How can the asset turnover be used to compute the return on assets?arrow_forwardRefer to the following mentioned data. Net sales Cost of products sold Gross margin 2017 2016 2015 Required: a. Calculate the gross profit ratio for each of the past three years. (Round your answers to 2 decimal places.) (In millions) 2016 2017 2015 $34,894 $30,411 $26,113 14,318 13,376 13,767 $20,576 $17,035 $12,346 Cost of goods sold Gross profit 58.94 % % % b. Assume that Campbell's net sales for the first four months of 2018 totaled $12.79 billion. Calculate an estimated cost of goods sold and gross profit for the four months, using the gross profit ratio for 2017. (Round Intermediate calculations to 2 decimal places. Enter your answers in millions rounded to nearest whole number (1.e., 5,000,000 should be entered as 5).) million millionarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License