Income statements

1.Problem 2-1 Income statement [LO1]

Frantic Fast Foods had earnings after taxes of $1,200,000 in the year 2009 with 322,000 shares outstanding. On January 1, 2010, the firm issued 30,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 24 percent.

 

(a) Compute earnings per share for the year 2009. (Round your answer to 2 decimal places. Omit the “$” sign in your response.)

 

  Earnings per share  

 

(b) Compute earnings per share for the year 2010. (Round your answer to 2 decimal places. Omit the “$” sign in your response.)

 

  Earnings per share  

 

2.Problem 2-3 Gross profit [LO1]

Hillary Swank Clothiers had sales of $428,000 and cost of goods sold of $260,000.

 

(a) What is the gross profit margin (ratio of gross profit to sales)? (Round your answer to the nearest whole percentage. Omit the “%” sign in your response.)

 

  Gross profit margin

 

(b) If the average firm in the clothing industry had a gross profit of 35 percent, how is the firm doing?

 

  The firm is .

 

3.Problem 2-4 Operating profit [LO1]

A-Rod Fishing Supplies had sales of $2,160,000 and cost of goods sold of $1,550,000. Selling and administrative expenses represented 10 percent of sales. Depreciation was 6 percent of the total assets of $4,450,000.

 

What was the firm’s operating profit? (Omit the “$” sign in your response.)

 

  Operating profit

 

4.Problem 2-6 Income statement [LO1]

Given the following information, prepare an income statement for the Dental Drilling Company. (Input all amounts as positive values. Omit the “$” sign in your response.)

 

     
  Selling and administrative expense $ 72,000
  Depreciation expense   71,000
  Sales   536,000
  Interest expense   45,000
  Cost of goods sold   179,000
  Taxes   53,000

 

5.Problem 2-7 Income statement [LO1]

Given the following information, prepare an income statement for Jonas Brothers Cough Drops. (Input all amounts as positive values. Omit the “$” sign in your response.)

 

   
  Selling and administrative expense $ 326,000
  Depreciation expense   196,000
  Sales   1,600,000
  Interest expense   124,000
  Cost of goods sold   551,000
  Taxes   167,000

 

6.Problem 2-11 Depreciation and earnings [LO1]

Stein Books, Inc., sold 2,300 finance textbooks for $200 each to High Tuition University in 2010. These books cost $170 to produce. Stein Books spent $12,300 (selling expense) to convince the university to buy its books.
     Depreciation expense for the year was $15,500. In addition, Stein Books borrowed $102,000 on January 1, 2010, on which the company paid 17 percent interest. Both the interest and principal of the loan were paid on December 31, 2010. The publishing firm’s tax rate is 30 percent.
 
Prepare an income statement for Stein Books. (Input all amounts as positive values. Omit the “$” sign in your response.)

 

7.Problem 2-15 Development of balance sheet [LO3]

Arrange the following items in proper balance sheet presentation (Be sure to list the assets in order of their liquidity. Input all amounts as positive values. Omit the “$” sign in your response):

 

     
  Accumulated depreciation $ 347,000
  Retained earnings   46,000
  Cash   14,000
  Bonds payable   137,000
  Accounts receivable   51,000
  Plant and equipment—original cost   668,000
  Accounts payable   38,000
  Allowance for bad debts   6,000
  Common stock, $1 par, 100,000 shares outstanding   100,000
  Inventory   71,000
  Preferred stock, $52 par, 1,000 shares outstanding   52,000
  Marketable securities   28,000
  Investments   24,000
  Notes payable   39,000
  Capital paid in excess of par (common stock)   91,000

 

8.Problem 2-16 Earnings per share and retained earnings [LO1, 3]

Okra Snack Delights, Inc., has an operating profit of $241,000. Interest expense for the year was $35,800; preferred dividends paid were $34,100; and common dividends paid were $39,600. The tax was $61,400. The firm has 23,700 shares of common stock outstanding.

 

(a) Calculate the earnings per share and the common dividends per share. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)

 

   
  Earnings per share  
  Common dividends per share  

 

(b) What was the increase in retained earnings for the year? (Omit the “$” sign in your response.)

 

  Increase in retained earnings

 

 

Do you need help with this assignment? Or a different one? We got you covered.

 

 
 
 

Quality Guaranteed

 

Any Deadline

 

No Plagiarism