Financial Accounting Assignment Questions
Question 1 - Analyzing and Evaluating Return on Assets from a Security Analyst s Perspective
Papa John's is one of the fastest-growing pizza delivery and carry-out restaurant chains in the country. Presented here are selected income statement and balance sheet amounts (dollars in thousands).
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Current Year
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Prior Year
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Net Sales
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$1,217,882
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$1,126,397
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Net Income
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59,387
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55,425
|
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Average shareholders' equity
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212,711
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246,119
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|
Average total assets
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403,162
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394,143
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Required:
1. Compute ROA for the current and prior years.
2. Would security analysts more likely increase or decrease their estimates of share value on the basis of this change?
Question 2 - Inferring Stock Issuances and Cash Dividends from Changes in Stockholders' Equity
The following information applies to the questions displayed below.
The Kroger Co. is one of the largest retailers in the United States and also manufactures and processes some of the food for sale in its supermarkets. Kroger reported the following January 31 balances in its statement of stockholders' equity (dollars in millions).
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Current Year
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Prior Year
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Common stock
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$959
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$958
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Paid-in capital
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3,427
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3,394
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Retained Earnings
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8,571
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8,225
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During the current year, Kroger reported net income of $602.
Required -
1. How much did Kroger declare in dividends for the year?
2. Assume that the only other transaction that affected stockholders' equity during the current year was a single stock issuance. Prepare the journal entry reflecting the stock issuance.
Question 3 - Inferring Income Statement Values
Supply the missing dollar amounts for the current year income statement of NexTech Company for each of the following independent cases.
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Case A
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Case B
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Case C
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Case D
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Case E
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Sales revenue
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$500
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$600
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$500
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|
|
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Cost of goods sold
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|
150
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|
500
|
320
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Gross margin
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375
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|
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|
440
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Selling expense
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|
50
|
80
|
350
|
240
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Administrative expense
|
125
|
|
70
|
120
|
80
|
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Pretax income
|
200
|
300
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|
200
|
|
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Income tax expense
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|
30
|
20
|
50
|
20
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Net income
|
150
|
|
50
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|
100
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Question 4 - Preparing a Classified (Multiple-Step) Income Statement
Macy's, Inc., operates the two best-known high-end department store chains in North America: Macy's and Bloomingdales. The following data (in millions) were taken from its recent annual report for the year ended February 1:
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Cost of sales
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$16,725
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Federal, state, and local income tax expense
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804
|
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Interest expense
|
390
|
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Interest income
|
2
|
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Net sales
|
27,931
|
|
Other operating expenses
|
88
|
|
Selling, general, and administrative expenses
|
8,440
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Required: Prepare a complete classified (multiple-step) consolidated statement of income for the company (showing gross margin, operating income, and income before income taxes).
Question 5 - Preparing a Classified (Multiple-Step) Income Statement
Macy's, Inc., operates the two best-known high-end department store chains in North America: Macy's and Bloomingdales. The following data (in millions) were taken from its recent annual report for the year ended February 1:
|
Cost of sales
|
$16,725
|
|
Federal, state, and local income tax expense
|
804
|
|
Interest expense
|
390
|
|
Interest income
|
2
|
|
Net sales
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27,931
|
|
Other operating expenses
|
88
|
|
Selling, general, and administrative expenses
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8,440
|
Required: Prepare a complete classified (multiple-step) consolidated statement of income for the company (showing gross margin, operating income, and income before income taxes).