View the step-by-step solution to: 2. Use your knowledge of balance sheets to fill in the

2. Use your knowledge of balance sheets...
This question was answered on Dec 04, 2012. View the Answer
2. Use your knowledge of balance sheets to fill in the missing
amounts:
ASSETS
Cash $10,000
Accounts receivable 100,000
Inventory ––––––
Total current assets 220,000
Gross plant and equipment 500,000
Less: accumulated depreciation ––––––
Net plant and equipment 375,000
Total assets ––––––
LIABILITIES
Accounts payable $12,000
Notes payable 50,000
Total current liabilities ––––––
Long-term debt ––––––
Total liabilities 190,000
Common stock ($1 par, 100,000 shares) ––––––
Paid-in capital ––––––
Retained earnings 150,000
Total stockholders’ equity ––––––
Total liabilities and equity ––––––

5. Following are selected financial data in thousands of dollars for
the Hunter Corporation.
2012 2011
Current assets $ 500 $400
Fixed assets, net 700 600
Total assets 1,200 1,000
Current liabilities 300 200
Long-term debt 200 200
Common equity 700 600
Total liabilities and equity $1,200 $1,000
Net sales $1,500 $1,200
Total expenses 1,390 1,100
Net income 110 100.
a. Calculate Hunter’s rate of return on total assets in 2012 and
in 2011. Did the ratio improve or worsen?
b. Diagram the expanded Du Pont system for Hunter for 2012.
Insert the appropriate dollar amounts wherever possible.
c. Use the Du Pont system to calculate the return on assets for
the two years, and determine why they changed.
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