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XACC 280 P15-1 Comparative statement data for Douglas Company and Maulder Company, two competitors, appear


Axia College of University of Phoenix (UoP)

Principles of Accounting: Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

                                                                                       SOLUTION

Problem P15-1(6 Points)


Douglas Company
Maulder Company
2009
2008
2009
2008
Net sales
15,49,035
3,39,038
Cost of goods sold
10,80,490
2,41,000
Operating expenses
3,02,275
79,000
Interest expense
8,980
2,252
Income tax expense
54,500
6,650
Current assets
3,25,975
3,12,410
83,336
79,467
Plant assets (net)
5,21,310
5,00,000
1,39,728
1,25,812
Current liabilities
65,325
75,815
35,348
30,281
Long-term liabilities
1,08,500
90,000
29,620
25,000
Common stock, $10 par
5,00,000
5,00,000
1,20,000
1,20,000
Retained earnings
1,73,460
1,46,595
38,096
29,998

Instructions
(a)  Prepare a vertical analysis of the 2009 income statement data for Douglas Company and Maulder Company in columnar form.
(b) Comment on the relative profitability of the companies by computing the Return on assets and the return on common stockholders’ equity ratios for both companies.  SOLUTION

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