Question

Ratio proficiency McDougal​ Printing, Inc., had sales totaling $ 41 comma 000 comma 000 in fiscal year 2019. Some ratios for the company are listed below. Use this information to determine the dollar values of various income statement and balance sheet accounts as requested. Assume a​ 365-day year. Calculate values for the​ following: a. Gross profits b. Cost of goods sold c. Operating profits d. Operating expenses e. Earnings available for common stockholders f. Total assets g. Total common stock equity h. Accounts receivable

Answer 1

a. Gross profits

= total sales x gross profit margin = $41,000,000 x 76​% = $31,160,000

b. Cost of goods sold

= total sales - gross profit = $41,000,000 - $31,160,000 = $9,840,000

c. Operating profits

= total sales x operating profit margin = $41,000,000 x 31​% = $12,710,000

d. Operating expenses

= total sales - operating profit = $41,000,000 - $12,710,000 = $28,290,000

e. Earnings available for common stockholders

= net profits = total sales x net profit margin = $41,000,000 x 9​% = $3,690,000

f. Total assets

asset turnover = revenue / total assets

total assets = revenue / 2.1 = $41,000,000 / 2.1 = $19,523,810

g. Total common stock equity

ROE = net income / equity

equity = net income / ROE = $3,690,000 / 23% = $16,043,478

h. Accounts receivable

average collection period = 365 / accounts receivable turnover

54.5 = 365 / accounts receivable turnover

accounts receivable turnover = 365 / 54.5 = 6.697248

accounts receivable turnover = sales / accounts receivable

accounts receivable = sales / accounts receivable turnover = $41,000,000 / 6.697248 = $6,121,918

Step-by-step explanation:

McDougal​ Printing, Inc.

Year Ended December​ 31, 2019

Sales $41,000,000

Gross profit margin 76​% =

Operating profit margin 31​%

Net profit margin 9​%

Return on total assets 18.9​%

Return on common equity 23​%

Total asset turnover 2.1

Average collection period 54.5 days