ice Assignment Gradebook ORION Downloadable eTextbook ment P

ice Assignment Gradebook ORION Downloadable eTextbook ment Problem 14-1A (Part Level Submission) Comparative statement data for Farris Company and Ratzlaff Company, two competitors, 2016. Farris Company Ratzlaff Company 2017 2016 2017 2016 $339,700 240,500 79,500 2,500 6,600 Net sales $1,570,000 1,060,000 Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $10 301,600 8,800 53,300 321,000 $312,400 83,200 $79,500 521,100 497,600 139,200 123,300 65,800 74,400 35,800 31,800 108,600 91,200 30,000 24,400 503,500503,500 123,000 123,000 164,200 140,900 33,600 23,600 par Retained earnings Your answer is correct e to search

Solution

Calculatuon of net income

Farris company

Net sales. $1570000

Cost of goods sold. ($1060000)

Operating expenses. ($301600)

Interest expense. ($8800)

Income tax expense. ($53300)

Net income. $146300

Total assets of the company

Current assets. $321000

Plant assets. $521100

Total assets. $842100

Total common stock of company. $503500

Return on total assets = net income / total assets ×100

Return on assets = $146300/842100*100. = 17.37%

Return on common stock = net income/ no.share holder

= $146300/$503500*100. =29.06%

Calculatuon of net income of. Ratzlaff company

Net sales. $339700

Cost of goods sold. ($240500)

Operating expenses. ($79500)

Interest income. ($2500)

Income tax expense. ($6600)

Net income. $10600

Total assets of company

Current assets. $83200

Plant assets. $139200

Total assets. $222400

Common stock of company. $123000

Return on total assets = net income / total assets ×100

$10600/222400×100. =4.75%

Return on common stock = net income / total common stock

$10600/$123000*100. =8.62%