P15-1A - d . a $102,790 is Douglass 2009 net income....

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(a) Condensed Income Statement For the Year Ended December 31, 2009 Douglas Company Maulder Company Dollars Percent Dollars Percent Net sales Cost of goods sold Gross profit Operating expenses Income from operations Other expenses and losses Interest expense Income before income taxes Income tax expense Net income $1,549,035 1,080,490 468,545 302,275 166,270 8,980 157,290 54,500 $ 102,790 100.0% 69.8% 30.2% 19.5% 10.7% .6% 10.1% 3.5% 6.6% $339,038 241,000 98,038 79,000 19,038 2,252 16,786 6,650 $ 10,136 100.0% 71.1% 28.9% 23.3% 5.6% .7% 4.9% 1.9% 3.0% (b) Douglas Company appears to be more profitable. It has higher relative gross profit, income from operations, income before taxes, and net income. Douglas’s return on assets of 12.4% $102,790 $829,848 a is higher than Maulder’s return on assets of 4.7% $10,136 $214,172 b . Also, Douglas’s return on common stockholders’ equity of 15.6% $102,790 $660,028 c is higher than Maulder’s return on stockholders’ equity of 6.6% $10,136 $154,047
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Unformatted text preview: d . a $102,790 is Douglass 2009 net income. $829,848 is Douglass 2009 average assets: 2009 2008 Current assets Plant assets Total assets $325,975 521,310 $847,285 + $312,410 500,000 $812,410 = $1,659,695 2 b $10,136 is Maulders 2009 net income. $214,172 is Maulders 2009 average assets: 2009 2008 Current assets Plant assets Total assets $ 83,336 139,728 $223,064 + $ 79,467 125,812 $205,279 = $428,343 2 c $102,790 is Douglass 2009 net income. $660,028 is Douglass 2009 average stockholders equity: 2009 2008 Common stock Retained earnings Stockholders equity $500,000 173,460 $673,460 + $500,000 146,595 $646,595 = $1,320,055 2 d $10,136 is Maulders 2009 net income. $154,047 is Maulders 2009 average stockholders equity: 2009 2008 Common stock Retained earnings Stockholders equity $120,000 38,096 $158,096 + $120,000 29,998 $149,998 = $308,094 2...
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P15-1A - d . a $102,790 is Douglass 2009 net income....

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