Accounts payable= 45,000

Question

Accounts receivable= 122,400

Accruals= 13,500

Additional paid in capital= 216,660

Cash= ???

Common Stock @ par value= 42,000

COGS= 179,106.00

Depreciation expense= 22,119.00

Interest expense= 16,749.00

Inventories= 115,200

Long-term debt= 139,498.00

Net fixed assets= 399,600

Notes payable= 64,800

Operating expenses (excl. depr.)= 62,080.00

Retained earnings= 136,800

Sales= 338,431.00

Taxes= 18,725.00
Net profit margin= 11.72%
What is the firm's net income for the current year?

Answer 1

To determine the firm's net income for the current year, we will first calculate the net income based on the provided sales and the net profit margin.

Net Profit Margin is defined as:

\[ \text{Net Profit Margin} = \frac{\text{Net Income}}{\text{Sales}} \]

Given:

• Net Profit Margin = 11.72% (or 0.1172 in decimal form)
• Sales = 338,431.00

We can rearrange the formula to find the Net Income:

\[ \text{Net Income} = \text{Net Profit Margin} \times \text{Sales} \]

Substituting in the values:

\[ \text{Net Income} = 0.1172 \times 338,431.00 \]

Calculating this gives:

\[ \text{Net Income} = 39,706.65 \]

Thus, the firm's net income for the current year is approximately:

\[ \text{$39,706.65} \]

Answer 2

What is the firm's gross profit margin for the current year?

Answer 3

To calculate the firm's gross profit margin, we first need to determine the gross profit. Gross profit is calculated as follows:

\[ \text{Gross Profit} = \text{Sales} - \text{Cost of Goods Sold (COGS)} \]

We have the following values:

• Sales = $338,431.00
• COGS = $179,106.00

Now, substituting in the values:

\[ \text{Gross Profit} = 338,431.00 - 179,106.00 = 159,325.00 \]

Next, we calculate the gross profit margin using the formula:

\[ \text{Gross Profit Margin} = \frac{\text{Gross Profit}}{\text{Sales}} \]

Substituting in the gross profit and sales:

\[ \text{Gross Profit Margin} = \frac{159,325.00}{338,431.00} \]

Calculating this:

\[ \text{Gross Profit Margin} \approx 0.4705 \quad \text{or} \quad 47.05% \]

Therefore, the firm's gross profit margin for the current year is approximately 47.05%.

Answer 4

What is the firm's current year operating profit margin?

Answer 5

To calculate the firm's operating profit margin, we first need to determine the operating profit (also known as operating income). The operating profit can be calculated using the following formula:

\[ \text{Operating Profit} = \text{Gross Profit} - \text{Operating Expenses} \]

We already calculated the gross profit, which is \(159,325.00\). We now need to calculate total operating expenses. The operating expenses consist of:

• Operating expenses (excluding depreciation) = \(62,080.00\)
• Depreciation expense = \(22,119.00\)

Now, we can calculate total operating expenses:

\[ \text{Total Operating Expenses} = \text{Operating Expenses} + \text{Depreciation Expense} \]

Substituting in the values:

\[ \text{Total Operating Expenses} = 62,080.00 + 22,119.00 = 84,199.00 \]

Now, we can calculate the operating profit:

\[ \text{Operating Profit} = \text{Gross Profit} - \text{Total Operating Expenses} \]

Substituting in the values:

\[ \text{Operating Profit} = 159,325.00 - 84,199.00 = 75,126.00 \]

Next, we calculate the operating profit margin using the formula:

\[ \text{Operating Profit Margin} = \frac{\text{Operating Profit}}{\text{Sales}} \]

Substituting in the operating profit and sales:

\[ \text{Operating Profit Margin} = \frac{75,126.00}{338,431.00} \]

Calculating this:

\[ \text{Operating Profit Margin} \approx 0.221 \quad \text{or} \quad 22.1% \]

Therefore, the firm's operating profit margin for the current year is approximately 22.1%.

Answer 6

What is the entry for the current year's cost of goods sold on a common-sized income statement?

Answer 7

A common-sized income statement expresses each line item as a percentage of total sales (or revenue), allowing for easy comparison across time periods or with other firms in the industry.

To calculate the common-sized entry for the current year's cost of goods sold (COGS), we can use the following formula:

\[ \text{Common-sized COGS} = \left( \frac{\text{COGS}}{\text{Sales}} \right) \times 100 \]

Using the values provided:

• COGS = $179,106.00
• Sales = $338,431.00

Now we can substitute the numbers into the formula:

\[ \text{Common-sized COGS} = \left( \frac{179,106.00}{338,431.00} \right) \times 100 \]

Calculating this gives:

\[ \text{Common-sized COGS} \approx \left( 0.5282 \right) \times 100 \approx 52.82% \]

Therefore, the entry for the current year's cost of goods sold on a common-sized income statement is approximately 52.82%.

Answer 8

What is the entry for the current year's operating expense on a common-sized income statement?

Answer 9

To calculate the common-sized entry for the current year's operating expenses on a common-sized income statement, we express operating expenses as a percentage of total sales (or revenue).

The formula to calculate the common-sized operating expenses is:

\[ \text{Common-sized Operating Expenses} = \left( \frac{\text{Operating Expenses}}{\text{Sales}} \right) \times 100 \]

From the previous details, we know:

• Operating Expenses (excluding depreciation) = $62,080.00
• Depreciation Expense = $22,119.00
• Therefore, Total Operating Expenses = $62,080.00 + $22,119.00 = $84,199.00
• Sales = $338,431.00

Now we can substitute these values into the formula:

\[ \text{Common-sized Operating Expenses} = \left( \frac{84,199.00}{338,431.00} \right) \times 100 \]

Calculating this gives:

\[ \text{Common-sized Operating Expenses} \approx \left( 0.2484 \right) \times 100 \approx 24.84% \]

Therefore, the entry for the current year's operating expenses on a common-sized income statement is approximately 24.84%.

Answer 10

What is the current year's cash balance?

Answer 11

To determine the current year's cash balance, we can use the accounting equation, which states:

\[ \text{Assets} = \text{Liabilities} + \text{Equity} \]

We will compute the total assets and total liabilities and equity using the provided data.

Let's classify the given information into assets, liabilities, and equity:

Assets

1. Cash = ???
2. Accounts Receivable = $122,400
3. Inventories = $115,200
4. Net Fixed Assets = $399,600

Total Assets Calculation: \[ \text{Total Assets} = \text{Cash} + \text{Accounts Receivable} + \text{Inventories} + \text{Net Fixed Assets} \]

\[ \text{Total Assets} = \text{Cash} + 122,400 + 115,200 + 399,600 \] \[ \text{Total Assets} = \text{Cash} + 637,200 \]

Liabilities

1. Accounts Payable = $45,000
2. Notes Payable = $64,800
3. Long-term Debt = $139,498
4. Accruals = $13,500

Total Liabilities Calculation: \[ \text{Total Liabilities} = \text{Accounts Payable} + \text{Notes Payable} + \text{Long-term Debt} + \text{Accruals} \] \[ \text{Total Liabilities} = 45,000 + 64,800 + 139,498 + 13,500 \] \[ \text{Total Liabilities} = 262,798 \]

Equity

1. Common Stock at Par Value = $42,000
2. Additional Paid-in Capital = $216,660
3. Retained Earnings = $136,800

Total Equity Calculation: \[ \text{Total Equity} = \text{Common Stock} + \text{Additional Paid-in Capital} + \text{Retained Earnings} \] \[ \text{Total Equity} = 42,000 + 216,660 + 136,800 \] \[ \text{Total Equity} = 395,460 \]

Total Liabilities and Equity Calculation

\[ \text{Total Liabilities and Equity} = \text{Total Liabilities} + \text{Total Equity} \] \[ \text{Total Liabilities and Equity} = 262,798 + 395,460 \] \[ \text{Total Liabilities and Equity} = 658,258 \]

Set Total Assets Equal to Total Liabilities and Equity

Now we can set the total assets equal to the total liabilities and equity:

\[ \text{Cash} + 637,200 = 658,258 \]

Solve for Cash

\[ \text{Cash} = 658,258 - 637,200 \] \[ \text{Cash} = 21,058 \]

Therefore, the current year's cash balance is $21,058.