Using Financial Reports: Financial Statement InferencesThe following amounts were selected from the annual financial statements for Genesis Corporation at December 31, 2012 (end of the third year of operations): From the 2012 income statement:Sales revenue……………….. $275,000Cost of goods sold……………… (170,000)All other expenses (including income tax) ………. (95,000)Net income………………… $ 10,000 From the December 31, 2012, balance sheet:Current assets……………….. $ 90,000All other assets………………… 212,000Total assets………………… $302,000Current liabilities……………….. $ 40,000Long-term liabilities……………… 66,000Capital stock (par $10) …………….. 100,000Paid-in capital……………….. 16,000Retained earnings……………….. 80,000Total liabilities and stockholders’ equity……….. $302,000Required:Analyze the data on the 2012 financial statements of Genesis by answering the questions that follow. Show computations.1. What was the gross margin on sales?2. What was the amount of EPS?3. If the income tax rate was 25%, what was the amount of pretax income?4. What was the average sales price per share of the capital stock?5. Assuming that no dividends were declared or paid during 2012, what was the beginning balance (January 1, 2012) of retained earnings?View Solution:
Using Financial Reports Financial Statement Inferences The foll



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