CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
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CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
Sales | $ | 2,760,000 |
Net operating income | $ | 110,400 |
Average operating assets | $ | 920,000 |
The following questions are to be considered independently.
Brewer 8e Rechecks 2019-01-10
Required:
1. Compute the company's
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- Prepare a vertical analysis scheduleHere is the operating data for Yalis Cleaning, Inc.:2021 2020Service revenue $523,000 $476,000Operating expenses 385,500 319,800Income tax expense 34,375 39,050Net income $103,125 $117,150PurposeThe purpose of this problem is to demonstrate an understanding of preparing a vertical analysis schedule.InstructionsAfter analyzing the transactions, prepare a vertical analysis schedule for the company for 2021 and 2020 using service revenueas the base amount. Round percentages to two decimal places.GuidanceFor formatting guidance, see the vertical analysis examples that are provided in Chapter 13 of the textbook.Shouldn't the operating expenses for 2020 be 8074.9? Forecasting an Income StatementADP reports the following income statement. AUTOMATIC DATA PROCESSING INC.Statement of Consolidated EarningsFor Year Ended June 30, 2019, $ millions Total revenues $14,175.2 Operating expenses 7,145.9 Systems development and programming costs 636.3 Depreciation and amortization 304.4 Total cost of revenues 8,086.6 Selling, general, and administrative expenses 3,064.2 Interest expense 129.9 Total expenses 11,280.7 Other income expense, net 111.1 Earnings before income taxes 3,005.6 Provision for income taxes 712.8 Net earnings $ 2,292.8 Forecast ADP’s 2020 income statement assuming the following income statement relations. All percentages (other than total revenue growth and provision for income taxes) are based on historic percent of total revenues. Total revenues growth 13% Depreciation and amortization $460.5 million Interest expense No change Other…After analyzing the transactions, prepare a vertical analysis schedule for the company for 2021 and 2020 using service revenue as the base amount. Round percentages to two decimal places. Here is the operating data for Yalis Cleaning, Inc.: 2021 2020Service revenue $523,000 $476,000Operating expenses 385,500 319,800Income tax expense 34,375 39,050Net income $103,125 $117,150
- Direction: Study carefully the following statement of profit and loss of Grandeur Co. for the year ended December 31, 2017 and 2018. Answer the question in each number. Write it in a separate sheet of paper. Particulars 2018 2019 Revenue from operations 60,000,000 75,000,000 Other incomes 1,500,000 1,200,000 Expenses 44,000,000 55,500,000 Questions: 1. What year has higher expenses? By how much? 2. What is the percentage profit or loss of revenue from operations in the succeedingyears? 3-4. What is the net profit on each year? a. 2018- b. 2019- 5. Which year yields a higher profit? Why?Obtain Target Corporation's annual report for its 2018 fiscal year (year ended February 2, 2019) at http://investors.target.com a. What was Target's gross margin percentage for the fiscal year ended February 2, 2019 (2018) and 2017? Use "Sales" for these computations b. What was Target's Return on Sales percentage for 2018 and 2017? Use "Total Revenue" for these computations. c. Target's return on ales percentage for 2017 was higher than it was in 2018. Ignoring taxes, how much higher would Target's 2018 net income have been if it's return on sales percentage in 2018 had been the same as for 2017?K Find online the annual 10-K report for Costco Wholesale Corporation (COST) as of August 30, 2020. a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. b. Verify the DuPont Identity for Costco's ROE. c. Repeat the analysis from parts (a) and (b) using Walmart Stores (WMT) instead. Specifically, use Walmart's data as of January 31, 2020. Based on the DuPont Identity, what explains the difference between the two firms' ROE? a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. The net profit margin is%. (Round to two decimal places.) (Round to two decimal places.) The total asset turnover is The total asset turnover is The equity multiplier is b. Verify the DuPont Identity for Costco's ROE. The ROE is%. (Round to two decimal places.) c. Repeat the analysis from parts (a) and (b) using Walmart Stores (WMT) instead. Specifically, use Walmart's data as of January 31, 2020. The net profit margin is%. (Round to two decimal places.)…
- The following information is taken from the records of Baklava Bakery for the year 2019. A. Calculate net income or net loss for January. B. Calculate net income or net loss for February. C. Calculate net income or net loss for March. D. For each situation, comment on how a stakeholder might view the firms performance. (Hint: Think about the source of the income or loss.)Ethics and Sale of Operating Component It is the end of 2019, and, as an accountant for Newell Company, you are preparing its 2019 financial statements. On December 29, 2019, Newells management decided to sell one of its major divisions, subject to some legal work that is expected to be completed during the first week in April 2020 after the 2019 financial statements have been issued). During 2019, the division earned a small operating income that is just enough for the company to report record earnings for the year. However, the estimated fair value of the division at the end of 2019 is less than its net book value, so that management anticipates the component will be sold at a loss. Newells president stops by your office and says, You have been doing a fine job. Keep up the good work because you are heading for a promotion in early 2021. Once we report the record earnings for 2019, our shareholders and creditors will be happy. Then I think our earnings for 2020 will be high enough so that the loss we expect to report in 2020 on the sale of the division will not look so bad. After the president leaves your office, you continue preparing the 2019 financial statements. Required: From financial reporting and ethical perspectives, what information, if any, will you include about the upcoming sale of the division in the 2019 financial statements?Review the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.
- Spreadsheet The following 2019 information is available for Payne Company: Partial additional information: The net income for 2019 totaled 1,600. During 2019, the company sold, for 390, equipment that cost 390 and had a book value of 300. The company sold land for 200, resulting in a loss of 40. The remaining change in the Land account resulted from the purchase of land through the issuance of common stock. Required: Making whatever additional assumptions that are necessary, prepare a spreadsheet to support the 2019 statement of cash flows for Payne.Profitability Ratios Tinker Corporation operates in the highly competitive consulting industry. Tinkers balance sheet indicates the following balances as of December 31, 2019. Required: Calculate Tinkers return on equity if Tinkers 2019 net income is $90,000.Review the select information for Liquor Plaza and Beer Buddies (industry competitors) and complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.