Question : 17) The following information available for Row, Inc. 2011 2012 : 1253305

 

17) The following information is available for Row, Inc.

 

 

2011

2012

2013

Net sales for the year ended December 31

 

$500,000

$600,000

Cost of goods sold for the year ended Dec. 31

 

$300,000

$360,000

Interest expense for the year ended Dec. 31

 

$   2,000

$   3,000

Net income for the year ended December 31

 

$  52,500

$  60,000

Total assets at December 31

$350,000

$400,000

$600,000

Total shareholders’ equity at December 31

$307,500

$360,000

$400,000

 

1. The return on assets for 2012 is ________________%, rounded to one decimal place.

 

2. The return on assets for 2013 is ________________%, rounded to one decimal place.

 

3. Was there an improvement in the return on assets?__________

 

4. The asset turnover ratio for 2012 is ______________, rounded to one decimal place.

 

5. The asset turnover ratio for 2013 is ______________, rounded to one decimal place.

 

6. Was there an improvement in the asset turnover ratio?_____________

 

18) Provide students with copies of real merchandising companies’ annual reports, or give students the Web addresses of real merchandising companies and ask them to print out the annual reports.

 

Divide the class into teams of three or four people. All team members should work with the same company’s annual report. Give the students time in class to answer the following questions for their company. Each team should turn in only one copy of the answers for grading, along with a copy of the annual report that they used. All team members will receive the same grade.

 

1

What is the name of your company?

2

What is the date of your company’s most recent fiscal yearend?

3

Calculate the most recent year’s return on assets (round to the nearest tenth of a percent).

 

 

4

Which of the audited financial statement(s) do you need to use to calculate return on assets?

 

 

5

Calculate the most recent year’s asset turnover (round to the nearest tenth of a percent).

6

Which of the audited financial statement(s) do you need to use to calculate asset turnover?

 

 

7

Can you tell how much the company paid for its buildings?

8

Can you tell how much the land is worth (i.e., the market value) at yearend?

9

Are the long-term assets in general relatively new or used?

10

Can you tell whether the company purchased any long-term assets in the current year?

 

 

11

How much cash was spent on the purchase of long-term assets during the most recent year?

 

$

12

How much depreciation and amortization expense was recorded in the most recent year?

$

13

Which depreciation method does the company use?

 

 

14

List two of its intangible assets.

 

 

 

 

 

19) Team instructions: Divide the class into teams of three or four people. Give the students time in class to answer the following questions. Students need access to both the Team Shirts, financial statements and the transactions to be able to answer these questions. Each team should turn in only one copy of the answers for grading. All team members will receive the same grade.

 

Use the Team Shirts, financial statements for April, May, and June to answer the following:

 

1

Calculate the return on assets for May, rounded to the nearest tenth of a percent.

%

2

Calculate the return on assets for June, rounded to the nearest tenth of a percent.

%

3

Is the return on assets more favorable in May or in June?

 

4

What business event explains the change in return on assets?

 

 

 

5

Calculate the asset turnover ratio for May.

 

%

6

Calculate the asset turnover ratio for June.

 

%

7

Is the asset turnover ratio more favorable in May or in June?

 

8

Why is accumulated depreciation at the end of June more than depreciation expense for June?

 

9

Why would Team Shirts choose to use the activity method to depreciate the van?

 

 

10

Does Team Shirts have any intangible assets?