Problems in Operating Data Analysis

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.

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:
                                                                    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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