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3 years ago

Formulating Financial Statements from Raw Data

Business

1 answer:

Tpy6a [65]3 years ago

4 0

Solution:

General Mills, Inc., Income statement for year ended May 25, 2003

Particulars Millions $

Revenue $10,506

Less Cost of goods sold - 6,109

----------------

Gross profit 4,397

----------------

Less operating expenses - 3,480

-----------------

917

-----------------

Balance sheet May 25, 2003

Assets Million $ Liabilities Million $

Cash 703 Total Liabilities 13,752

Non cash 17,524 Stockholders' equity 4,475

Total assets 18,227 Total Liabilities & equity 18,227

Statement for cash flows for year ended May 25, 2003

Particulars Million $

Cash from operating activities 1,631

Cash from financing activities - 885

Cash from investing activities - 1,018

--------------

Net change in cash -272

----------------

Cash, beginning year 975

-----------------

703

A negative amount for cash from financing activities reflects the reduction of long term debt

Profit margin = ( Net income / Revenue ) * 100

= ( 917 / 10,506 ) * 100

= 8.72%

Asset turnover = Revenue / total assets

= 10,506 / 18, 227

= 0.57

Return on assets =( Net income / Total assets ) * 100

= ( 917 / 18, 227 ) *100

= 5.03%

Return of equity = ( Net income / Total shareholder equity )*100

= ( 917 / 4,475 ) *100

= 20.49%

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3 years ago

An unstable government is one that __________.

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Answer:

Explanation:

An unstable government is one that changes hand frequently.

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3 years ago

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On June 20 of the prior year, a company determined that a customer's account receivable was uncollectible and that the account s

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Answer:

B. No effect on net income; no effect on total assets

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3 years ago

Assume a purely competitive firm is selling 200 units of output at $3 each. At this output, its total fixed cost is $100 and its

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The correct option is: maximizing its profit, but not necessarily the maximum profit.

<h3>What is Profit Maximization in a Perfectly Competitive Market ?</h3>

The perfectly competitive firm can choose to sell any quantity of output at exactly the same price. This implies that the firm faces a perfectly elastic demand curve for its product: buyers are willing to buy any number of units of output from the firm at the market price.

When the perfectly competitive firm chooses what quantity to produce, then this quantity—along with the prices prevailing in the market for output and inputs—will determine the firm’s total revenue, total costs, and ultimately, level of profits.

A perfectly competitive firm has only one major decision to make—namely, what quantity to produce. To understand why this is so, consider the basic definition of profit:

Profit=Total revenue−Total cost

(Price) (Quantity produced)−(Average cost) (Quantity produced)

According the question scenario,

Given:

Firm is selling = 200 units

output = $3 each

fixed cost = $100

variable cost = $350

solution:

Total average cost = variable cost + fixed cost .........(1)

Total average cost = 350 + 100

Total average cost = $450

Cost per unit = average cost ÷ no of unit ...................(2)

Cost per unit = 450 ÷ 200

Cost per unit = $2.25

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The correct answer is option a.

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