GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 5, Problem 5.7P
Determining and Interpreting the Effects of Transactions on Income Statement Categories and Return on Assets (AP5-A)
Creative Technology, a computer hardware company based in Singapore, developed the mortem standard for computer sound cards in the early 1990s. Recently. Creative has released a line of portable audio products to directly compete with Apple's popular iPod. Presented here is a recent income statement (dollars in millions).
| Net sales | $ 231 |
| Costs and expenses | |
| Cost of sales | 182 |
| Research and development | 66 |
| Selling, general, and administrative | 62 |
| Operating income (loss) | (79) |
| Interest and other income (expenses), net | 27 |
| Income (loss) before provision (benefit) for income taxes | (52) |
| Provision (benefit) for income taxes | (5) |
| Net income (loss) | S (47) |
The company’s beginning and ending assets were $403 and $342, respectively.
Required:
Listed here are hypothetical additional transactions. Assuming that they also occurred during the fiscal year, complete the following tabulation, indicating the sign of the effect of each additional transaction (+ tor increase, − for decrease, and NE tor no effect). Consider each item independently and ignore taxes. (Hint: Construct the
- a. Recorded sales on account of $400 and related cost of goods sold of $300.
- b. Incurred additional research and development expense of $100, which was paid in cash.
- c. Issued additional shares of common stock for $260 cash.
- d. Declared and paid dividends of $90.
| Transaction | Gross Profit | Operating Income |
Return on Assets |
| a. | |||
| b. | |||
| c. | |||
| d. |
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Comparative figures for Apple and Google follow.
Apple
One Year
Current Year Prior
$338,516 $ 365,725
260,174
265,595
$ millions
Total assets
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Complete this question by entering your answers in the tabs below.
Apple
Google
Required:
1. Compute total asset turnover for the most recent two years for Apple and Google using the data shown.
2. In the current year, which company is more efficient in generating net sales given total assets?
3. Does asset turnover underperform or outperform the 0.5 industry asset turnover for (a) Apple and (b) Google?
Total Asset Turnover
Two Years
Prior
$375,319
229, 234
Current Year
Required 1 Required 2 Required 3
Compute total asset turnover for the most recent two years for Apple and Google using the data shown.
Note: Round your answers to 2 decimal places.
0.61 times
times
Current Year
$ 275,909
161,857
One Year Prior
times
times
Required 1
Google
One Year
Prior
$ 232,792
136,819
Two Years
Prior
$ 197,295
110,855
Required 2 >
What is the net income from the following income
statement?
Income Statement
Sales
$12,000
Returns
($370)
Net Sales
COGS
($8,150)
Gross Profit
Overhead
($2,300)
Net Income
net income = $[?]
Enter
Copyright 2003 - 2021 Acellus Corporation. All Rights Reserved.
Calculate the total asset turnover (sales / total assets) for the firm below. Make sure you do NOT convert your answer and keep 2 decimals for your final answer.....for examples, if you calculate 6,000/400 = 15, you should enter 15 into BB to be marked correct.
Sales 4000
COGS $1,200
Depreciation $800
Interest $500
Net Income $200
Total Assets 1700
Chapter 5 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Explain what a material amount is.Ch. 5 - What basis of accounting (cash or accrual) does...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - For property, plant, and equipment, as reported on...
Ch. 5 - Briefly explain the major classifications of...Ch. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - If average total assets increase, but net income,...Ch. 5 - Prob. 2MCQCh. 5 - Prob. 3MCQCh. 5 - Prob. 4MCQCh. 5 - Prob. 5MCQCh. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - Prob. 8MCQCh. 5 - Prob. 9MCQCh. 5 - Prob. 10MCQCh. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Prob. 5.3MECh. 5 - Prob. 5.4MECh. 5 - Determining Financial Statement Effects of Sales...Ch. 5 - Prob. 5.6MECh. 5 - Prob. 5.7MECh. 5 - Matching Players in the Accounting Communication...Ch. 5 - Prob. 5.2ECh. 5 - Finding Financial Information: Matching...Ch. 5 - Prob. 5.4ECh. 5 - Preparing a Classified Balance Sheet Campbell Soup...Ch. 5 - Prob. 5.6ECh. 5 - Preparing a Classified (Multiple-Step) Income...Ch. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Stock Issuances and the Statement of Stockholders...Ch. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17ECh. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Matching Transactions with Concepts Following are...Ch. 5 - Matching Definitions with Balance Sheet-Related...Ch. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Preparing a Classified (Multiple-Step) Income...Ch. 5 - Prob. 5.6PCh. 5 - Determining and Interpreting the Effects of...Ch. 5 - Determining the Effects of Transactions on Ratios...Ch. 5 - Prob. 5.9PCh. 5 - Prob. 5.1APCh. 5 - Preparing a Statement of Stockholders' Equity...Ch. 5 - Prob. 5.3APCh. 5 - Prob. 5.4APCh. 5 - Evaluating the Impact of Transactions on Statement...Ch. 5 - Prob. 5.2CONCh. 5 - Finding Financial Information Refer to the...Ch. 5 - Finding Financial Information Refer to the...Ch. 5 - Prob. 5.3CPCh. 5 - Prob. 5.4CPCh. 5 - Prob. 5.5CPCh. 5 - Prob. 5.6CPCh. 5 - Prob. 5.7CP
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