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klio [65]
3 years ago
10

Torrid Romance Publishers has total receivables of $3,000, which represents 20 days’ sales. Total assets are $75,000. The firm’s

operating profit margin is 5%. Find the firm's ROA and asset turnover ratio.
Business
1 answer:
AveGali [126]3 years ago
4 0

Answer:

Assets turnover ratio= 0.73

ROA= 3.65%

Explanation:

Torrid romance publishers have a total receivables of $3,000, it represents a 20 days sales

The total assets is $75,000

The operating profit margin is 5%

= 5/100

= 0.05

The first step is to calculate the total sales

= $3,000×365/20

= $3,000×18.25

= $54,750

The asset turnover ratio can be calculated as follows

= Total sales/Total assets

= $54,750/$75,000

= 0.73

The ROA can be calculated as follows

= Assets turnover ratio×operating profit margin

= 0.73×0.05

= 0.0365×100

= 3.65%

Hence the assets turnover ratio and ROA is 0.73 and 3.65% respectively.

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6 0
1 year ago
At the equilibrium level of income in the Keynesian model, which of the following statements is nottrue?
ZanzabumX [31]

Answer:

c. There are more unemployed resources.

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At equilibrium income level, aggregate expenditure is equal to aggregate output. The equilibrium equation can be written as Y = C+I+G+X-M where

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7 0
3 years ago
Kwik taxi service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven
zimovet [89]

Answer:

Explanation:

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           Cost - salvage value       X    usage

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24,300-700

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2017:  <u>expected useful life</u>

           Cost - salvage value       X    usage

= <u>140,000</u>

24,300-700

=5.93*33,000 = $195,762.71

Depreciation Expense:

2016:<u> (cost-salvage value)*actual activity performed</u>

             total estimated useful life

= <u>(24,300-700)*28,000</u>

          140,000

=$4,720

2017: <u>(cost-salvage value)*actual activity performed</u>

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6 0
3 years ago
The following trial balance was taken from the books of Sheridan Corporation on December 31, 2020.
Leokris [45]

Answer:

Sheridan Corporation

a. Adjusting Journal Entries on December 31, 2020:

a. Debit Insurance Expense $2,000

Credit Prepaid Insurance $2,000

To record the insurance expense for the year.

b. Debit Bad Debts Expense $2,680

Credit Accounts Receivable $2,680

To record bad debts written off.

c. Debit Depreciation Expense - Equipment $12,260

Credit Accumulated Depreciation - Equipment $12,260

To record the depreciation expense for the year.

d. Debit Interest Receivable $672

Credit Interest Revenue $672

To record interest revenue receivable on the note.

e. Debit Rent Prepaid $5,400

Credit Rent Expense $5,400

To record rent prepaid, previously recorded as an expense.

f. Debit Salaries and Wages Expense $5,800

Credit Salaries Payable $5,800

To record accrued salaries.

b. Closing Journal Entries on December 31, 2020:

Debit Sales Revenue $268,000

Interest Revenue $672

Credit Income Summary $268,672

To close the revenue accounts to the income summary.

Debit Income Summary $202,040

Credit:

Cost of Goods Sold                 123,900

Salaries and Wages Expense  54,400

Rent Expense                             6,800

Bad debts Expense                   2,680

Insurance Expense                   2,000

Depreciation Expense             12,260

To close the expense accounts to the income summary.

Explanation:

a) Data and Calculations:

Sheridan Corporation

Unadjusted Trial Balance as of December 31, 2020:

Account Titles                               Debit     Credit

Cash                                             $8,500

Accounts Receivable                   40,700

Notes Receivable                          11,200

Allowance for Doubtful Accounts               $1,870

Inventory                                     35,300

Prepaid Insurance                         4,720

Equipment                                 122,600

Accumulated Depreciation--Equip.             14,100

Accounts Payable                                        10,100

Common Stock                                           49,100

Retained Earnings                                     64,550

Sales Revenue                                        268,000

Cost of Goods Sold                 123,900

Salaries and Wages Expense  48,600

Rent Expense                           12,200

Totals                                   $407,720 $407,720

Adjustments:

a. Insurance Expense $2,000 Prepaid Insurance $2,000

b. Bad Debts Expense $2,680 Accounts Receivable $2,680 (1% of $268,000)

c. Depreciation Expense - Equipment $12,260 Accumulated Depreciation - Equipment $12,260 (10% of $122,600)

d. Interest Receivable $672 Interest Revenue $672 (6% of $11,200)

e. Rent Prepaid $5,400 Rent Expense $5,400

f. Salaries and Wages Expense $5,800 Salaries Payable $5,800

Sheridan Corporation

Adjusted Trial Balance as of December 31, 2020:

Account Titles                               Debit     Credit

Cash                                             $8,500

Accounts Receivable                   38,020

Notes Receivable                          11,200

Interest Receivable                           672

Allowance for Doubtful Accounts               $1,870

Inventory                                     35,300

Prepaid Insurance                         2,720

Prepaid Rent                                 5,400

Equipment                                 122,600

Accumulated Depreciation--Equip.           26,360

Accounts Payable                                        10,100

Salaries Payable                                           5,800

Common Stock                                           49,100

Retained Earnings                                     64,550

Sales Revenue                                        268,000

Interest Revenue                                            672

Cost of Goods Sold                 123,900

Salaries and Wages Expense  54,400

Rent Expense                             6,800

Bad debts Expense                   2,680

Insurance Expense                   2,000

Depreciation Expense            12,260

Totals                                   $426,452 $426,452

8 0
3 years ago
An individual wants to have $95,000 per year to live on when she retires in 30 years. The individual is planning on living for 2
son4ous [18]

Answer:

The amount she would be saving during her working life is  $1,089,64 and the deposit required for each year is $6,624.21

Explanation:

Solution

Given that:

The amount of income needed for retirement income = P×[1-(1÷(1+r)^n)]÷r

Now,

The Interest rate per annum  =6.00%

The Number of years = 2

The Number of compoundings per annum  = 1

The Interest rate per period ( r)=6.00%      

The period per payment (P)=$ 95,000

The Amount required for retirement income = 95000*[1-(1/(1+6%)^95000]/6% =$1,089,643        

Now,

Required deposit for every year (P)=FVA÷([(1+r)^n-1]÷r)

The Interest rate per annum = 10.00%

The Number of years= 30                                          

The number payments per per annum =1                                       The Interest rate per period ( r)=10.00%

The Number of periods (n)=30

Thus,

The Future value of annuity (FVA) = $1,089,643  

Hence the deposit required for each year is = 1089643/(((1+10%)^30-1)/10%)

= $6,624.21

                           

                                                 

6 0
3 years ago
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