Compute the following for year 2:2-a. Percentage markup on sales. (Round percentage answer to 1 decimal place (i.e., 0.124 should be entered as 12.4)2-b. Income tax rate. (Round percentage answer to 1 decimal place (i.e., 0.124 should be entered as 12.4).)2-c. Net profit margin ratio. Was it a good or poor indicator of performance? (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)2-d. Percentage of total resources invested in property, plant, and equipment. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)2-e. Debt-to-equity ratio. Interpret the result. (Round the final answer to 2 decimal places.)2-f. Return on assets. Assume that long-term debt increased to $36,810 in month 1 of year 2. (Round intermediate calculations to 3 decimal places and percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)2-g. Return on equity. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)2-h. Financial leverage percentage. Did borrowing from creditors benefit shareholders? (Round intermediate calculations and final answer to 2 decimal places.) Required:1. Present component percentages for Year 2 only. (Input all amounts as positive values. Round the final answers to the nearestwhole percent. Percentages may not add exactly due to rounding.)Statement of earnings:Sales revenueCost of salesGross marginAnswer is complete and correct.Operating expenses and interest expenseEarnings before income taxesIncome tax expenseNet earningsStatement of financial position:CashAccounts receivable (net)InventoryProperty, plant, and equipment (net)Total assetsCurrent liabilitiesLong-term liabilitiesCommon sharesRetained earningsTotal liabilities and shareholders' equityComponentPercentagesYear 2100851510523517492910016392619100%%%%%%%%%%%%%%%%% The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data:Statement of EarningsSales revenueCost of salesGross marginOperating expenses and interest expenseEarnings before income taxesIncome tax expenseNet earningsStatement of Financial PositionCashAccounts receivable (net)InventoryProperty, plant, and equipment (net)Current liabilities (no interest)Non-current liabilities (10% interest)Common shares (6,000 shares)Retained earningstYear 2$379,790*321,70058,09039, 22018,8706,690$ 12,180$ 4,17015,99046,05027,430$ 93,640Year 1$320,000270,00050,00035,00015,0005,100$ 9,900$ 8,20019,00040,00023,000$ 90,200$ 15,350$ 18,50036,81035,90024,00024,00017,48011,800$ 93,640 $ 90,200*One-third was credit sales.+During Year 2, cash dividends amounting to $6,500 were declared and paid.

Name: Compute the following for year 2:2-a. Percentage markup on sales. (Rou
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Description: Compute the following for year 2:2-a. Percentage markup on sales. (Round percentage answer to 1 decimal place (i.e., 0.124 should be entered as 12.4)2-b. Income tax rate. (Round percentage answer to 1 decimal place (i.e., 0.124 should be entered as 1

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute the following for year 2:

2-a. Percentage markup on sales. (Round percentage answer to 1 decimal place (i.e., 0.124 should be entered as 12.4)

2-b. Income tax rate. (Round percentage answer to 1 decimal place (i.e., 0.124 should be entered as 12.4).)

2-c. Net profit margin ratio. Was it a good or poor indicator of performance? (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)

2-d. Percentage of total resources invested in property, plant, and equipment. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)

2-e. Debt-to-equity ratio. Interpret the result. (Round the final answer to 2 decimal places.)

2-f. Return on assets. Assume that long-term debt increased to $36,810 in month 1 of year 2. (Round intermediate calculations to 3 decimal places and percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)

2-g. Return on equity. (Round percentage answer to 2 decimal places (i.e., 0.1243 should be entered as 12.43).)

2-h. Financial leverage percentage. Did borrowing from creditors benefit shareholders? (Round intermediate calculations and final answer to 2 decimal places.)

Required:
1. Present component percentages for Year 2 only. (Input all amounts as positive values. Round the final answers to the nearest
whole percent. Percentages may not add exactly due to rounding.)
Statement of earnings:
Sales revenue
Cost of sales
Gross margin
Answer is complete and correct.
Operating expenses and interest expense
Earnings before income taxes
Income tax expense
Net earnings
Statement of financial position:
Cash
Accounts receivable (net)
Inventory
Property, plant, and equipment (net)
Total assets
Current liabilities
Long-term liabilities
Common shares
Retained earnings
Total liabilities and shareholders' equity
Component
Percentages
Year 2
100
85
15
10
5
2
3
5
17
49
29
100
16
39
26
19
100
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

The comparative financial statements prepared at December 31, year 2, for Goldfish Company showed the following summarized data:
Statement of Earnings
Sales revenue
Cost of sales
Gross margin
Operating expenses and interest expense
Earnings before income taxes
Income tax expense
Net earnings
Statement of Financial Position
Cash
Accounts receivable (net)
Inventory
Property, plant, and equipment (net)
Current liabilities (no interest)
Non-current liabilities (10% interest)
Common shares (6,000 shares)
Retained earningst
Year 2
$379,790*
321,700
58,090
39, 220
18,870
6,690
$ 12,180
$ 4,170
15,990
46,050
27,430
$ 93,640
Year 1
$320,000
270,000
50,000
35,000
15,000
5,100
$ 9,900
$ 8,200
19,000
40,000
23,000
$ 90,200
$ 15,350
$ 18,500
36,810
35,900
24,000
24,000
17,480
11,800
$ 93,640 $ 90,200
*One-third was credit sales.
+During Year 2, cash dividends amounting to $6,500 were declared and paid.

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