td WileyPLUS httpsedugenwileypluscomedugenstudentmainfruni U

td WileyPLUS https//edugen.wileyplus.com/edugen/student/mainfr.uni US weygandt, Managerial Accounting, 7e Assignment Gradebook ORION Downloadable eTextbook Practice signment ES Problem 14-1A (Part Level Submission) Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. 2016 Farris Company Ratzlaff Company 2017 2016 2017 2016 $1,570,000 1,060,000 d Net sales $339,700 240,500 79,500 2,500 6,600 Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $10 par Retained earnings 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 24,400 503,500 503,500 123,000 123,000 164,200 140,900 33,600 23,600 (a) Your answer is correct. e to search

Solution

Return on assests is = (Net Income / Average Total Assets)*100

Net Income is = Net sales - Cost of goods sold - Operating expenses - Interest expenses - Income tax expenses

Total Assets is = Current Assets + Plant Asses net

Average Total Assets = ( Beggining Total assets + Ending Total Assets)/2

For Farris Company -

Average Total Assets is =((312400+497600)+(321000+521100))/2 = 826050

Return on Assets = (146300/826050)*100 = 17.71%.

For Ratzlaff company -

Return on assests = (10600/212600)*100 = 4.99%

Return on common Stockholders equity is = ( Net income/ Average Total common Stockholders equity)*100

Total common shareholders equity is = Common stock and retained earnings

For Farris Company = (146300/656050)*100 = 22.30%

For Ratzlaff company = (10600/151600)*100 = 6.99%.