P19-1 - 8,980 0.6 2,252 0.7 Income before income taxes...

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Homework # 6 P19-1A a) Rocking Company and Rolling Compa Condensed Balance Sheets December 31 Rocking Company Amount Percent Amount Percent Assets Current assets 325,975 38.5% 312,410 38.5% Plant assets 521,310 61.5% 500,000 61.5% Total assets 847285 100% 812410 100% Liabilities Current liabilities 70,325 8.3% 75,815 9.3% Long-term liabilities 108,500 12.8% 90,000 11.1% Total liabilities 178825 21.1% 165815 20.4% Stockholders' Equity Common Stock, $10 par 500,000 59.0% 500,000 61.5% Retained earnings 168,460 19.9% 146,595 18.0% Total stockholders' equity 668460 78.9% 646595 79.6% Total liabilities and stockholders' equity 847285 100% 812410 100% Rocking Company and Rolling Company Condensed Income Statements For the Year Ended December 31 Rocking Company Rolling Company 2006 2006 Amount Percent Amount Percent Net Sales 1,549,035 100.0% 339,038 100.0% Cost of goods sold 1,080,490 69.8% 241,000 71.1% Gross profit 468545 30.2% 98038 28.9% Operating expenses 292,275 18.9% 79,000 23.3% Income from operations 176270 11.4% 19038 5.6% Other expenses and losses Interest expense
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Unformatted text preview: 8,980 0.6% 2,252 0.7% Income before income taxes 167290 10.8% 16786 5.0% Income tax expense 44,500 2.9% 6,650 2.0% Net income 122790 7.9% 10136 3.0% b) Return on Assets (for 2006) Rocking Company -14.8% Increase or (Decrease) during 2006 Increase or (Decrease) during 2005 Rolling Company -4.7% Return on Common Stockholders' Equity Rocking Company -18.7% Rolling Company -6.6% We can make a conclusion that Rocking Company is more profitable. any Rolling Company Amount Percent Amount Percent 83,336 37.4% 79,467 38.7% 139,728 62.6% 125,812 61.3% 223064 100% 205279 100% 35,348 15.8% 30,281 14.8% 29,620 13.3% 25,000 12.2% 64968 29.1% 55281 26.9% 120,000 53.8% 120,000 58.5% 38,096 17.1% 29,998 14.6% 158096 70.9% 149998 73.1% 223064 100% 205279 100% Increase or (Decrease) during 2006 Increase or (Decrease) during 2005...
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This note was uploaded on 02/19/2010 for the course ACCT 221 taught by Professor Strauss during the Spring '07 term at Maryland.

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P19-1 - 8,980 0.6 2,252 0.7 Income before income taxes...

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