Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2.9P
To determine
Concept Introduction:
Income Statement is a statement which records all the incomes of the company and also recorded all the expenses of the company. In income statement company calculates profit or loss by matching the income and expenses.
To Explain: Loss is not permanent which occurs this year.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
This problem is based on the 2017 annual report of Campbell Soup Company. Answer the following questions. Refer to the Selected Financial Data for parts (a) to (d).Required:
Find the net sales in 2014. (Enter your answer in millions.)
Calculate the operating income (earnings before interest and taxes) in 2013. (Enter your answer in millions.)
Calculate the difference between operating income (earnings before interest and taxes) and net income (net earnings) in 2015. (Enter your answer in millions.)
Find the year(s) in which net income (net earnings) decreased compared to the previous year.
attatched are the charts needed for the following questions, I have tried to figure these out but I come up with incorrect answers. Thank You
Oriole Corporation recently filed the following financial statements with the SEC. Look at the image for the balance sheet and more!
Oriole CorporationIncome Statement for the FiscalYear Ended July 31, 2017
Net sales
$77,630
Cost of products sold
55,218
Gross profit
$22,412
Selling, general, and administrative expenses
9,893
Depreciation
1,124
Operating income (loss)
$11,395
Interest expense
688
Earnings (loss) before income taxes
$10,707
Income taxes
3,748
Net earnings (loss)
$6,959
Use the DuPont identity to calculate the return on equity (ROE). In the process, calculate the following ratios: net profit margin, total asset turnover, equity multiplier, EBIT return on assets (EROA), and return on assets. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 52.75 or 52.75%.)
Net profit margin
%
Total asset turnover
Equity multiplier
EBIT return on assets
%
Return on assets
%…
(Disclosure of Estimates) Nancy Tercek, the financial vice president, and Margaret Lilly, the controller, of Romine Manufacturing Company are reviewing the financial ratios of the company for the years 2017 and 2018. The financial vice president notes that the profit margin on sales ratio has increased from 6% to 12%, a hefty gain for the 2-year period. Tercek is in the process of issuing a media release that emphasizes the efficiency of Romine Manufacturing in controlling cost. Margaret Lilly knows that the difference in ratios is due primarily to an earlier company decision to reduce the estimates of warranty and bad debt expense for 2018. The controller, not sure of her supervisor’s motives, hesitates to suggest to Tercek that the company’s improvement is unrelated to efficiency in controlling cost. To complicate matters, the media release is scheduledin a few days.Instructions(a) What, if any, is the ethical dilemma in this situation?(b) Should Lilly, the controller, remain silent?…
Chapter 2 Solutions
Using Financial Accounting Information
Ch. 2 - Prob. 2.1ECh. 2 - Prob. 2.2.1ECh. 2 - Prob. 2.2.2ECh. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Prob. 2.4.1ECh. 2 - Prob. 2.4.2ECh. 2 - Prob. 2.4.3ECh. 2 - Prob. 2.5ECh. 2 - Prob. 2.6ECh. 2 - Prob. 2.7E
Ch. 2 - Prob. 2.8ECh. 2 - Statement of Retained Earnings Landon Corporation...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Prob. 2.1.1PCh. 2 - Prob. 2.1.2PCh. 2 - Prob. 2.2PCh. 2 - Prob. 2.3.1PCh. 2 - Prob. 2.3.2PCh. 2 - Prob. 2.3.3PCh. 2 - Prob. 2.4.1PCh. 2 - Prob. 2.4.2PCh. 2 - Prob. 2.5.1PCh. 2 - Prob. 2.5.2PCh. 2 - Prob. 2.5.3PCh. 2 - Prob. 2.6.1PCh. 2 - Prob. 2.6.2PCh. 2 - Prob. 2.7.1PCh. 2 - Prob. 2.7.2PCh. 2 - Prob. 2.7.3PCh. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Prob. 2.8PCh. 2 - Prob. 2.9PCh. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1.1AAPCh. 2 - Prob. 2.1.2AAPCh. 2 - Prob. 2.2AAPCh. 2 - Prob. 2.3.1AAPCh. 2 - Prob. 2.3.2AAPCh. 2 - Prob. 2.3.3AAPCh. 2 - Prob. 2.4.1AAPCh. 2 - Prob. 2.4.2AAPCh. 2 - Prob. 2.5.1AAPCh. 2 - Prob. 2.5.2AAPCh. 2 - Prob. 2.5.3AAPCh. 2 - Prob. 2.6.1AAPCh. 2 - Prob. 2.6.2AAPCh. 2 - Prob. 2.7.1AAPCh. 2 - Prob. 2.7.2AAPCh. 2 - Prob. 2.7.3AAPCh. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Prob. 2.8.1AAPCh. 2 - Prob. 2.8.2AAPCh. 2 - Prob. 2.9AAPCh. 2 - Prob. 2.10AAMCPCh. 2 - Prob. 2.11.1AAMCPCh. 2 - Prob. 2.11.2AAMCPCh. 2 - Prob. 2.12AAMCP
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
- Financial statement data for years ending December 31 for Latchkey Company follows: a. Determine the ratio of sales to assets for 2016 and 2015. b. Does the change in the ratio of sales to assets from 2015 to 2016 indicate a favorable or an unfavorable trend?arrow_forwardYou are the management accountant of AISHA Company Ltd. MARIAM Limited is a major competitor in the same industry and it has been operating for 20 years. Summary of MARIAM Limited's statements of profit or loss and financial position for the previous three years are given below. SUMMARISED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DEC. 2016 2017 2018 GHSm GHSm GHSm Revenue 840 981 913 Cost of sales 554 645 590 286 336 323 Gross profit Selling, distribution and admin. expenses 186 214 219 Profit before interest 100 122 104 Interest 6 15 19 Profit before taxation 94 107 85 Taxation 45 52 45 Profit after taxation 49 55 40 Dividends 24 24 24 SUMMARISED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 2007 2008 GHSm GHSm GHSm ASSETSASSETS Non-current assets: 36 40 48 Intangible assets Tangible assets at net book value 176 206 216 212 246 264 Current assets: Inventories 237 303 294 Receivables 105 141 160 4 Bank 52 58 52 606 748 770 EQUITY AND LIABILITIES 2016 2017 2018 100…arrow_forwardThe financial statements for Tyler Toys, Inc. are shown in the popup window: LOADING... . Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $14,147,690 $13,566,481 Cost of goods sold $-8,447,054 $-8,131,319 Selling, general, and administrative expenses $-998,405 $-981,658 Depreciation $-1,498,619 $-1,472,478 EBIT $3,203,612 $2,981,026 Interest expense $-376,184 $-355,975 Taxes $-1,074,423 $-997,519 Net income $1,753,005 $1,627,532 Right-click on the table and select Copy to Clipboard and then right-click the highlighted texts in the popup dialogue box and select Copy in order to paste its…arrow_forward
- The financial statements for Tyler Toys, Inc. are shown in the popup window: LOADING... . Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $14,146,094 $13,567,551 Cost of goods sold $-8,448,688 $-8,131,338 Selling, general, and administrative expenses $-998,878 $-980,620 Depreciation $-1,497,580 $-1,472,740 EBIT $3,200,948 $2,982,853 Interest expense $-376,634 $-354,060 Taxes $-1,073,239 $-998,941 Net income $1,751,075 $1,629,852 Right-click on the table and select Copy to Clipboard and then right-click the highlighted texts in the popup dialogue box and select Copy in order to paste its…arrow_forwardWrite report on liquidity, profitability, growth, solvency, Leverage and operational performance of National Company. Comment on overall financial position and financial health of the business. Identify problems and recommend possible solutions, if historical ratios of company are Ratios 2017 2018 2019 Current Ratio 1.4 1.5 1.6 Acid Test Ratio 0.85 0.74 0.63 Asset Turnover Ratio 4 times 3.2 2.5 Inventory Turnover Ratio 6 times 5.5 5 Collection Period 6 times 5.5 5 Account payable turnover 8 times 10 times 12 times Total Debt to equity Ratio 1.38 1.61 1.91 Interest cover 5 4 3.5 Gross Profit Ratio 20% 22% 23% Net Profit Margin 8.5% 6.7% 3.8% Return on Equity 20% 21% 24% Sales Growth Rate 8% 5% 2% P/E Ratio 10 9 8 Fixed Asset Utilization Ratio 2 1.7 1.4arrow_forwardKingbird Inc. reported income from continuing operations before taxes during 2017 of $2,250,000. Additional transactions occurring in 2017 but not considered in the $2,250,000 are as follows. 1. A gain of $125,000 (pretax) as a result of selling securities from its investment portfolio. 2. A $27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. 3. A loss of $78,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. 4. An uninsured $122,000 loss due to a fire. 5. At the beginning of 2015, the corporation purchased a machine for $260,000 (salvage value of $20,000) that had a useful life of 10 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. 6. The corporation decided to change its method of inventory pricing from average-cost…arrow_forward
- (Analysis of Given Ratios) Picasso Company is a wholesale distributor of packaging equipment and supplies. The company’s sales have averaged about $900,000 annually for the 3-year period 2015–2017. The firm’s total assets at the end of 2017 amounted to $850,000.The president of Picasso Company has asked the controller to prepare a report that summarizes the financial aspects of the company’s operations for the past 3 years. This report will be presented to the board of directors at their next meeting.In addition to comparative financial statements, the controller has decided to present a number of relevant financial ratios which can assist in the identification and interpretation of trends. At the request of the controller, the accounting staff has calculated the following ratios for the 3-year period 2015–2017. Check the below image for following ratios. In preparation of the report, the controller has decided first to examine the financial ratios independent of any other data to…arrow_forwardPlease find below Financial Statement extracts of Nestle from year 2017 and 2018. Based on this information please answer following question from a perspective of Financial Analyst (justify your answers with data as well the reason for choosing your ratios for your analysis) .The company’s total assets at year-end 2016 were CHF 131,900 million. What reasonable conclusions an analyst might make about the companies efficiency, Companies solvency, Liquidity and Profitability? In millions of CHF Notes 2018 2017 * Sales 3 91,439 89,590 Cost of goods sold (46,070) (45,571) Trading operating profit 3 13,789 13,277 Operating profit 13,752 10,156 Profit before taxes, associates and joint ventures 12,991 9,460 Taxes 13 (3,439) (2,773) Profit for the year 10,468 7,511 Notes 2018 2017 * Assets Current assets Cash and cash equivalents 12/16…arrow_forwardDetermine Profit Margin,Asset Turnover,Earnings Per Share,Price-Earning Ratios, Pay out ratio and Debt to asset ratio for 2016 and 2017 and explain briefly whether or not the company experiences improvement in the financial positon and operating for the period from 2016 to 2017.arrow_forward
- During its first four years of operation, Vaughn Co. reported the following net income. 2015 $82,800 2016 139,700 2017 166,600 2018 239,400 Vaughn is undergoing its first financial statement audit. The external auditors noted the following:1. In early 2018, Vaughn Co. changed its estimate of bad debt expense from 2.5% of sales to 2.0% of sales. The company therefore adjusted its net income upward for 2015 through 2017 by the following amounts. 2015 $1,800 2016 4,300 2017 5,700 2. The auditor discovered that ending inventory was misstated as indicated below for the years ending 2015 and 2017: Year Amount ofmisstatement Direction ofmisstatement 2015 $20,400 Overstatement 2017 $17,700 Understatement Calculate net income to be reported in Vaughn’s comparative income statements for the years 2015 to 2018.arrow_forwardCece Company has provided the following data (ignore income taxes): 2016 revenues were $77,500.2016 net income was $33,900.Dividends declared and paid during 2016 totaled $5,700.Total assets at December 31, 2016 were $217,000.Total stockholders' equity at December 31, 2016 was $123,000. Retained earnings at December 31, 2016 were $83,000. Which of the following is correct? 2016 expenses were $37,900 Total liabilities at December 31, 2016 were $11,000. Retained earnings increased $28,200 during 2016. Common stock at December 31, 2016 was $206,000.arrow_forwardThe directors of Transport Ltd produced the following Statement of profit or loss account for 2017 and statement of financial Position as 31st December 2017 with the 2016 comparatives. Transport Ltd Statement of Profit or Loss Account for the year ended 31st December 2017 Revenue 320,000 Cost of Sales (143,000) Gross Profit 177,000 Interest received 5,000 Gain on disposal of equipment 7,000 Depreciation (39,000) Administrative and selling expenses (13,000) Operating Profit before Interest and taxes 137,000 Interest expenses (20,000) Profit before tax 117,000 Taxation (35,000) Profit after tax 82,000 Statement of financial position as at 31st December 2017 Non-current assets 2017 GHC 2016 GHC Vehicles at cost 195,000 130,000 Less: Accumulated depreciation (79,000) (52,000) 116,000 78,000 Investment 100,000 80,000 Current Assets Inventory…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Consolidated financial statements; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DTFD912ZJQg;License: Standard Youtube License