Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 1, Problem 10BP
Determining expenses, liabilities, equity, and return on assets
Ski-Doo Company manufactures. markets. and sells snowmobiles and snowmobile equipment and accessories The average total assets for Ski-Doo is $3,000,000. In its most recent year. Ski-Doo reported net income of $201,000 on revenues of $1,400,000.
Required
- 1. What is Ski-Doo Company’s return on assets?
- 2. Does return on assets seem satisfactory- for Ski-Doo given that its competitors average a 9.5% return on assets?
- 3. What are the total expenses for Ski-Doo Company in its most recent year?
Check (3) $1,199,000
- 4. What is the average total amount of liabilities plus equity for Ski-Doo Company?
(4) $3,000,000
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Return on assets
The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9. Based upon these statements, answer the following questions.
1. What are Hershey's sales (in millions)?
2. What is Hershey's cost of sales (in millions)?
3. What is Hershey's net income (in millions)?
4. What is Hershey's percent of the cost of the sales to sales? Round to one decimal place.
5. The percent that a company adds to its cost of sales to determine the selling price is called a markup. What is Hershey's markup percent? Round to one decimal place.
6. What is the percentage of net income to sales for Hershey? Round to one decimal place.
7. Hershey had total assets of $5,554 (millions) at the beginning of the year. Compute the return on assets for Hershey for the year shown in Exhibits 6–9. Round to one decimal place.
Crane Ltd. reported the following for the fiscal year 2021:
Sales
Cost of goods sold
Gross profit
Operating expenses
Depreciation expense
Gain on sale of land
Profit before income tax
Income tax expense
Profit
Additional information:
1.
2.
CRANE LTD.
Income Statement
Year Ended September 30, 2021
3.
4.
5.
6.
$ 109,000
34,000
(44,000)
$583,000
338,000
245,000
99,000
146,000
36,500
$109,500
Accounts receivable decreased by $16,300 during the year.
Inventory increased by $7,800 during the year.
Prepaid expenses decreased by $5,800 during the year.
Accounts payable to suppliers increased by $11,300 during the year.
Accrued expenses payable increased by $5,300 during the year.
Income tax payable decreased by $7,100 during the year.
Ski-Doo Company manufactures, markets, and sells snowmobiles and snowmobile equipment and accessories. The average total assets for Ski-Doo is $3,000,000. In its most recent year, Ski-Doo reported net income of $201,000 on revenues of $1,400,000. Required 1. What is Ski-Doo Company’s return on assets? 2. Does return on assets seem satisfactory for Ski-Doo given that its competitors average a 9.5% return on assets? 3. What are the total expenses for Ski-Doo Company in its most recent year? 4. What is the average total amount of liabilities plus equity for Ski-Doo Company?
Chapter 1 Solutions
Principles of Financial Accounting.
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