The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company. Atlanta* $ 34,800 |(15,500) 19,300 Boston* $ 86,100 (62,830) 23,270 Net sales Cost of goods sold Gross margin Less: Operating expenses Selling and administrative (12,120) (14,496) expenses Net income $ 7,180 $ 8,774 *All figures are reported in thousands of dollars. Required a-1. Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. a-2. Ascertain which of the companies is a high-end retailer based on ratios computed. b. If Atlanta and Boston have equity of $15,600 and $21,400, respectively, which company is in the more profitable business? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. (Round your answers to the nearest whole number.) Atlanta Boston Gross margin percentages % % Return-on-sales ratios % < Req A1 Req A2 >

The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company. Atlanta* $ 34,800 |(15,500) 19,300 Boston* $ 86,100 (62,830) 23,270 Net sales Cost of goods sold Gross margin Less: Operating expenses Selling and administrative (12,120) (14,496) expenses Net income $ 7,180 $ 8,774 *All figures are reported in thousands of dollars. Required a-1. Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. a-2. Ascertain which of the companies is a high-end retailer based on ratios computed. b. If Atlanta and Boston have equity of $15,600 and $21,400, respectively, which company is in the more profitable business? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. (Round your answers to the nearest whole number.) Atlanta Boston Gross margin percentages % % Return-on-sales ratios % < Req A1 Req A2 >

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
The following is select account information for August Sundries. Sales: $850,360; Sales Returns and Allowances: $148,550; COGS: $300,840; Operating Expenses: $45,770; Sales Discounts: $231,820. If August Sundries uses a multi-step income statement format, what is their gross margin?
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: During the year, Arnn had net sales of 2.45 million. The cost of goods sold was 1.3 million. Required: Note: Round all answers to two decimal places. 1. Compute the current ratio. 2. Compute the quick or acid-test ratio. 3. Compute the accounts receivable turnover ratio. 4. Compute the accounts receivable turnover in days. 5. Compute the inventory turnover ratio. 6. Compute the inventory turnover in days.
Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.
The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company. Atlanta* $ 32,400 (15,500) 16,900 Boston* $ 87,500 (64,030) 23,470 Net sales Cost of goods sold Gross margin Less: Operating expenses Selling and administrative expenses Net income *All figures are reported in thousands of dollars. Required a-1. Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. a-2. Ascertain which of the companies is a high-end retailer based on ratios computed. b. If Atlanta and Boston have equity of $17,800 and $20,200, respectively, which company is in the more profitable business? Complete this question by entering your answers in the tabs below. Req A1 Req A2 (12,740) (19,026) $ 4,160 $ 4,444 Req B Gross margin percentages Return-on-sales ratios Compute the gross margin percentages and return-on-sales ratios of Atlanta and Boston. (Round your answers to the nearest whole number.) Atlanta % % Boston
Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages. SorensonElectronicsCompany ElectronicsIndustryAverage Sales $2,690,000 100 % Cost of goods sold (1,829,200) (74) Gross profit $860,800 26 % Selling expenses $(484,200) (10) % Administrative expenses (188,300) (10) Total operating expenses $(672,500) (20) % Operating income $188,300 6 % Other revenue and expense: Other revenue 53,800 4 Other expense (26,900) (3) Income before income tax $215,200 7 % Income tax expense (80,700) (5) Net income $134,500 2 %
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. TannenhillCompany ElectronicsIndustryAverage Sales $2,540,000 100 % Cost of merchandise sold 1,473,200 63 Gross profit $1,066,800 37 % Selling expenses $660,400 22 % Administrative expenses 254,000 9 Total operating expenses $914,400 31 % Income from operations $152,400 6 % Other revenue and expense: Other revenue 50,800 2 Other expense (25,400) 1 Income before income tax expense $177,800 7 % Income tax expense 76,200 4 Net income $101,600 3 % Question Content Area a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter…
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. TannenhillCompany ElectronicsIndustryAverage Sales $2,180,000 100 % Cost of goods sold 1,417,000 69 Gross profit $763,000 31 % Selling expenses $457,800 18 % Administrative expenses 174,400 7 Total operating expenses $632,200 25 % Operating income $130,800 6 % Other income 43,600 2 $174,400 8 % Other expense 21,800 1 Income before income tax $152,600 7 % Income tax expense 65,400 5 Net income $87,200 2 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers. Tannenhill Company…
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. The Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. 1 Tannenhill Company Electronics Industry Average 2 Sales $4,060,000.00 100.0% 3 Cost of goods sold 2,111,200.00 58.0 4 Gross profit $1,948,800.00 42.0% 5 Selling expenses $1,055,600.00 23.0% 6 Administrative expenses 649,600.00 14.0 7 Total operating expenses $1,705,200.00 37.0% 8 Operating income $243,600.00 5.0% 9 Other income 118,000.00 2.9 10 $361,600.00 7.9% 11 Other expense 72,000.00 1.8 12 Income before income tax $289,600.00 6.1% 13 Income tax expense 78,000.00 1.9 14 Net income $211,600.00 4.2% A. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Round percentages to one decimal place. Enter all amounts as positive numbers. B. As far as the data permit, comment…
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. 1 Tannenhill Company Electronics Industry Average 2 Sales $4,720,000.00 100.0% 3 Cost of goods sold 2,454,400.00 57.0 4 Gross profit $2,265,600.00 43.0% 5 Selling expenses $1,250,800.00 23.5% 6 Administrative expenses 708,000.00 13.0 7 Total operating expenses $1,958,800.00 36.5% 8 Operating income $306,800.00 6.5% 9 Other revenue 102,000.00 2.2 10 $408,800.00 8.7% 11 Other expense 62,000.00 1.3 12 Income before income tax $346,800.00 7.4% 13 Income tax expense 72,000.00 1.5 14 Net income $274,800.00 5.9% A. Prepare a common-sized income statement comparing the results of operations for…