Question

McDougal Printing. Inc., had sales totaling $34,000,000 in fiscal year 2019. Some ratios for the company are listed (pictured) 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 (round to the nearest dollar):

a. Gross profits

b. Cost of goods

c. Operating Profits

d. Operating expenses

e. Earnings available for common stockholders

f. Total assets

g. Total common stock equity

h. Accounts receivable

McDougal Printing, Inc. Year Ended December 31, 2019 Sales $34,000,000 Gross profit margin 81% Operating profit margin 39% Net profit margin 7% Return on total assets 12.6% Return on common equity 18% Total asset turnover 1.8 Average collection period 63.4 days

Answer 1

a. Gross Profits:

Gross profit Margin = Gross Profits/Sales

0.81=Gross Profits/$34000000

Gross Profits=$27540000

b. Cost of Goods Sold:

Gross Profits=COGS-Sales

$27540000=COGS-$34000000

COGS=$6460000

c.Operating Profits:

Operating Profits Margin=Operating Profits/Sales

0.39=Operating Profits/$34000000

Operating Profits=$13260000

d.Operating Expenses:

Gross Profit-Operating Expenses=Operating Profit

$27540000-Operating Expenses=$13260000

Operating Expenses= $14280000

e. Earnings available for common shareholders:

$2380000

Net income is EACS because there is no tax payable

f.Total Assets turnover= sales/Total assets

1.8=34000000/total assets

Total Assets=18888888

g. Total common stock equity:

13222222

h. Accounts Receivable:Avg debtors* no of days/ sales

63.4=debtors*365/34000000

Accounts receivable=$5905753