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alekssr [168]
3 years ago
11

The accounting department of your company has just delivered a draft of the current year's financial statements to you. The summ

ary is as follows:
Beginning of the Year End of the Year
Total Assets $550,000 $573,000
Total Liabilities 210,000 217,000
Total Equity 340,000 356,000
Net Income for the Year 101,900
Common Shares Outstanding 22,000 22,000

You discovered that they have not adjusted for estimated bad debt expenses of $8,500. For each of the following ratios, calculate:

a. The ratio that would have resulted had the error not been discovered (i.e. the incorrect ratio).
b. The correct ratio.

1. ROE
2. ROA
3. Debit ratio
4. EPS
Business
1 answer:
marishachu [46]3 years ago
5 0

Answer and Explanation:

The computation is shown below:-

Incorrect

ROA = Net Income ÷ Average assets

= $101,900 ÷ (($550,000 + $573,000) ÷ 2)

= $101,900 ÷ $561,500

= 0.18

ROE = Net Income ÷ Average equity

= $101,900 ÷ (($340,000 + 356,000) ÷ 2)

= $101,900 ÷ $348,000

= 0.29

Debt Ratio = Total debt ÷ Average Assets

= $217,000 ÷ (($550,000 + $573,000) ÷ 2)

= $217,000 ÷ $561,500

= 0.39

EPS = Net Income ÷ Number of Common Shares

= $101,900 ÷ 22,000

= $4.63

Correct

ROA = Net Income ÷ Average assets

= ($101,900 - $8,500) ÷ (($550,000 + $573,000 - $8,500) ÷ 2)

= $93,400 ÷ $557,250

= 0.17

ROE = Net Income ÷ Average equity

= ($101,900 - $8,500) ÷ (($340,000 + 356,000 - $8,500) ÷ 2)

= $93,400 ÷ $343,750

= 0.27

Debt Ratio = Total debt ÷ Average Assets

= $217,000 ÷ (($550,000 + $573,000 - $8,500) ÷ 2)

= $217,000 ÷ $276,500

= 0.78

EPS = Net Income ÷ Number of Common Shares

= ($101,900 - $8,500) ÷ 22,000

= $4.25

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Answer:

The answer is "choice a"

Explanation:

In the given question the missing choices is added in attached file please find it.

The additional output produced through hiring an extra item of such an input reflects the marginal product (MP). For the very first time. for example, its marginal labor productivity was increased output generated by recruiting additional work.  

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In other words, any additional work input would generate less than a previous employee because recruiting additional workers decreases expected revenue on jobs, the laid-off of employees, which means the Labor would grow expected revenue.  

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Answer:

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Explanation:

Solution

(a) When the equilibrium price is at $8, the the quantity of equilibrium is  stated as:

From the data given, when the price at equilibrium is $8, then the six consumers namely, bob, barb, bill, brat, Brent, Betty were all willingly to pay much more than the equilibrium price and the 6 producers namely, Carlos, Courtney, chuck, Cindy, Craig, chad accepted, because the price at equilibrium  is greater than the minimum accepted price.

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