problem 4-10

Do all calculations using 9 decimal places, retain the 9 decimal places throughout the calculations, then when you report answers round to 2 decimal places. Examples: If the answer is in years: i.e., 9.5576 report 9.56 years. If the answer is in dollars, i.e., $56.987.555 report to the nearest cent $56,987.56. If the answer is in percentage terms i.e., 10.4478% report 10.45% If the answer is in times i.e., 4.783 report 4.78 times. You need to be very precise with rounding and reporting. For instance, if the answer is 9 times you must report 9.00, the homework grading program will count 9 as incorrect, it would count 9.0 as incorrect, everything must be carried or rounded to two decimal places. Another example, if the answer is $48,000, you must report 48,000.00 Problems 1-4 use the following balance sheet and income statement data: Got It Right Corporation Balance Sheets as of December 31, PY and CY PY CY $ Assets Current assets Cash Accounts receivable Inventory Total Fixed Assets Net plant and equipment Total Assets 11,686 $ 69,178 61,815 142,679 12,676 78,100 76,423 167,199 547,499 690,178 $ 650,998 818,197 $ Fixed Assets Net plant and equipment Total Assets 547,499 690,178 $ 650,998 818,197 $ $ Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in capital Retained Earnings Total Total liabilities and owners' equity 48,600 $ 139,494 188,094 130,000 57,289 144,701 201,990 125,000 110,000 262,084 372,084 690,178 $ 110,000 381,207 491,207 818,197 $ Got It Right Corporation Income Statement for CY Sales Cost of Good Sold Depreciation Earnings Before Interest & Taxes Interest Paid Taxable Income Tax Rate Taxes Net Income $ 864,500 432,900 81,000 350,600 24,065 326,535 40% 130,614 $ 195,921 Dividends Addition to Retained Earnings 76,798 119,123 Problem 4: Calculate the following Profitability ratios for Got It Right. (Use year-end figures rather than average values when appropriate) 4a. The Profit margin for the year CY is 4a. Points: 3.34 % 4b. The Return on assets for the year CY is 4b. Points: 3.33 % 4c. The Return on equity for the year CY is 4c. Points: 3.33 % Problem 5: Golden Egg Corporation has ending inventory for the year CY of $ Cost of goods sold for the year CY are $ 3,100,000. 290,000. The 5a. The Inventory Turnover for Golden Egg Corporation is 5a. Points: 5 times. 5b. The days' sales in inventory is 5b. Points: 5 days. Problem 6: Paul's Power Tools, Inc. had a Debt ratio of 44.00%. times. 6a. The debt-to-equity ratio for Paul's Power Tools is 6a. Points: 5 times. 6b. The equity multiplier for Paul's Power Tools is 6b. Points: 5 Problem 7: Timeless Tycoons, Inc. had an equity multiplier that was 1.8 times. Their total asset turnover was 0.76 times and their profit margin was 12.00% for CY. % Their ROE for CY was 7. Points: 10 Problem 8: Wally's Walkers and Whatnot Products has a profit margin of 12.00%, sales of $ 2,000,000, debt of $ 700,000, total assets of $ 3,150,000. The ROA for Wally's is % 8. Points: 10 Problem 9: Complete the following income statement for Pa Bell Corporation: Problem 9: Pa Bell Corporation Sales Cost of Goods Sold Depreciation Interest Tax Rate Taxes Net Income (9a) Dividends Addition to Retained Earnings (96) $ 652,500 $ 350,640 $ 100,000 $ 120,000 40% $ 25,000 9a. The net income for Pa Bell is $ 9a. Points: 5 9b. The Addition to Retained Earnings for Pa Bell is $ 9b. Points: 5 Problem 10: 4EM, Inc., has Sales of $1,900,000, total assets of $1,460,000, and a Debt-to-Equity ratio of 1. If its ROE is 18.00% then its net income is $ 10. Points: 10