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Income Statement. In an accounting conference, discussion turned to the possibility of preparing financial statements from a few key accounts together with financial or cost ratios. The assistant controller of a participating firm provided the following data:
Before-tax income for the year, $1,200,000;
Before-tax income rate on sales, 10%;
Gross profit rate on sales, 40%;
Rate of marketing expenses to sales, 15%;
5% bonds payable represent 37.5% of the total liabilities of $2,000,000.
5% bonds payable represent 37.5% of the total liabilities of $2,000,000.
Required: An income statement for the year based on the above information.
Rate of Return on Capital Employed. During the past year a company had a net income after taxes of $40,000. Sales were $200,000, and total capital employed was $400,000.
Required: Rate of return on capital employed.
Operating Data Analysis. The 200B annual report of the Columbia Gas Company contains the following statistics regarding operating revenues:
Increase/{Decrease)
200A 200B
Average number of customers 27,000 26,000 (1,000)
Sales in 1,000 cubic feet (MCF) 486,000 520,000 34,000
Revenue $1,215,000 $1,274,000 $59,000
Increase/{Decrease)
200A 200B
Average number of customers 27,000 26,000 (1,000)
Sales in 1,000 cubic feet (MCF) 486,000 520,000 34,000
Revenue $1,215,000 $1,274,000 $59,000
Required: An analysis accounting for the effect of changes in (a) average number of customers, (b) average gas consumption per customer, and (c) average rate per thousand cubic feet (MCF) sold.
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