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Category Prior Year Current Year Accounts payable ??? ??? Accounts receivable 320,715 397,400 Accruals 40,500 33,750 Additional paid in capital 500,000 541,650 Cash 17,500 47,500 Common Stock 94,000 105,000 COGS 328,500 428,652
| Category | Prior Year | Current Year |
| Accounts payable | ??? | ??? |
| Accounts receivable | 320,715 | 397,400 |
| Accruals | 40,500 | 33,750 |
| Additional paid in capital | 500,000 | 541,650 |
| Cash | 17,500 | 47,500 |
| Common Stock | 94,000 | 105,000 |
| COGS | 328,500 | 428,652.00 |
| Current portion long-term debt | 33,750 | 35,000 |
| Depreciation expense | 54,000 | 55,781.00 |
| Interest expense | 40,500 | 42,124.00 |
| Inventories | 279,000 | 288,000 |
| Long-term debt | 336,483.00 | 398,962.00 |
| Net fixed assets | 946,535 | 999,000 |
| Notes payable | 148,500 | 162,000 |
| Operating expenses (excl. depr.) | 126,000 | 162,155.00 |
| Retained earnings | 306,000 | 342,000 |
| Sales | 639,000 | 845,404.00 |
| Taxes | 24,750 | 48,319.00 |
What is the current year's return on equity (ROE)?
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
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#5
| Category | Prior Year | Current Year |
| Accounts payable | ??? | ??? |
| Accounts receivable | 320,715 | 397,400 |
| Accruals | 40,500 | 33,750 |
| Additional paid in capital | 500,000 | 541,650 |
| Cash | 17,500 | 47,500 |
| Common Stock | 94,000 | 105,000 |
| COGS | 328,500 | 428,652.00 |
| Current portion long-term debt | 33,750 | 35,000 |
| Depreciation expense | 54,000 | 55,781.00 |
| Interest expense | 40,500 | 42,124.00 |
| Inventories | 279,000 | 288,000 |
| Long-term debt | 336,483.00 | 398,962.00 |
| Net fixed assets | 946,535 | 999,000 |
| Notes payable | 148,500 | 162,000 |
| Operating expenses (excl. depr.) | 126,000 | 162,155.00 |
| Retained earnings | 306,000 | 342,000 |
| Sales | 639,000 | 845,404.00 |
| Taxes | 24,750 | 48,319.00 |
What is the current year's entry for long-term debt on a common-sized balance sheet?
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
Expert Solution
Answer :
Return on Equity= Net Income / Equity Share Capital
Return on Equity = 108373 / 988650
Return on Equity = 10.96%
where,
Net Income for current Year = Sales - COGS - Operating expenses - Depreciation - Interest - Taxes
= 845404 - 428652 - 162155 - 55781 - 42124 - 48319
= 108373
Total Equity Capital = Common Stock @ par value + Additional paid in capital + Retained earnings
= 105000 + 541650 + 342000
= 988650
(b.)
Total assets = Cash + Accounts receivable + inventories + net fixed assets
= 47500+397400+288000+999000
= $1731900
In common-sized balance sheet, components of balance sheet are taken as a % of Total assets.
Therefore ,
Current year's entry for long-term debt = Long-term debt / total assets
= 398,962 / 1731900
= 23.04%
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