Reference no: EM131810515
Given the financial statements for Jones Corporation and Smith Corporation:
JONES CORPORATION
Current Assets Liabilities Cash $ 122,700
Accounts payable $ 106,000
Accounts receivable 80,700
Bonds payable (long term) 89,300
Inventory 52,600
Long-Term Assets Stockholders'
EquityGross fixed assets $ 565,000
Common stock $ 150,000
Less: Accumulated depreciation 154,900
Paid-in capital 70,000 Net fixed assets* 410,100
Retained earnings 250,800
Total assets $ 666,100
Total liabilities and equity $ 666,100
Sales (on credit) $ 1,855,000
Cost of goods sold 718,000
Gross profit $ 1,137,000
Selling and administrative expense 351,000
Depreciation expense 50,500
Operating profit $ 735,500
Interest expense 10,600
Earnings before taxes $ 724,900
Tax expense 94,000
Net income $ 630,900
*Use net fixed assets in computing fixed asset turnover.
Includes $13,200 in lease payments.
SMITH CORPORATION
Current Assets Liabilities Cash $ 38,000
Accounts payable $ 75,300
Marketable securities 16,100
Bonds payable (long term) 234,000
Accounts receivable 79,200
Inventory 76,400
Long-Term Assets Stockholders' Equity Gross fixed assets $ 507,000
Common stock $ 75,000
Less: Accumulated depreciation 250,200
Paid-in capital 30,000
Net fixed assets* 256,800
Retained earnings 52,200
Total assets $ 466,500
Total liabilities and equity $ 466,500
*Use net fixed assets in computing fixed asset turnover.
SMITH CORPORATION
Sales (on credit) $ 1,090,000
Cost of goods sold 674,000
Gross profit $ 416,000
Selling and administrative expense 249,000
Depreciation expense 51,400
Operating profit $ 115,600
Interest expense 23,600
Earnings before taxes $ 92,000
Tax expense 55,300
Net income $ 36,700
Includes $13,200 in lease payments.
a. Compute the following ratios.
(Use a 360-day year. Do not round intermediate calculations. Input your profit margin, return on assets, return on equity, and debt to total assets answers as a percent rounded to 2 decimal places. Round all other answers to 2 decimal places.)