This is the presentation of the income statement of
Builtrite in order to compute the net income:
Sales $700,000
Less: COGS $280,000
Gross Profit $420,000
Less: Operating expenses ($700,000 x 25%) $175,000
Dividends
expense $25,000
Capital loss $70,000 $270,000
Total $150,000
Add: Dividend income $40,000
Capital gain $55,000 $95,000
Net income $245,000
Answer:
Total assets is increased by $18,100
Explanation:
The computation is shown below:
= Cash received from the issue of stock + revenue earned on account - cash paid for operating expenses
= $15,000 + $8,500 - $5,400
= $18,400
This positive amount shows that there is an increase in the total assets for $18,100
The cash collected from the account receivable is not relevant. Hence ignored it
Answer:
16.27%
Explanation:
Given that,
Equity multiplier = 1.27
Total asset turnover = 2.10
Profit margin = 6.1 percent
Here, the return on equity is calculated by multiplying profit margin, asset turnover and equity multiplier.
Return On Equity:
= (Profit margin) × (Asset turnover) × (Equity multiplier)
= (0.061) × (2.10) × (1.27)
= 0.1627
= 16.27%
Answer:
3.5%
Explanation:
The formula to calculate total return is: Profit/Original Cost. 100,000 x .03 = $3,000 interest. $3,000 interest + 100,000 principal = 103,000 cash flow. $103,000 - 99,500 = $3,500 gain. $3,500 gain/$99,500 cost = .03518. .03518 = 3.5%
