Question

Problem 14-1A a, b1 (Part Level Submission) Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2020, and December 31, 2019. Duke Company Lord Company 2020 2019 2020 2019 Net sales $561,000 297,330 79,101 3,927 6,732 Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $10 par Retained earnings $1,866,000 1,000,176 264,972 9,330 54,114 325,000 520,200 64,800 107,000 503,000 $314,200 501,800 74,400 90,400 503,000 148,200 82,600 140,400 37,000 28,000 116,000 42,000 $79,200 124,200 30,200 25,400 116,000 31,800 170,400

Answer 1

Particulars Duke Company Lord Company Return on assets = (Net Income Average total assets)*100 Net Income Average total assets Return on assets 537,408 830,600 64.7% 173,910 213,200 81.6% Note:- Total assets = Current assets + Plant assets Return on common stockholders equity = (Net Income/Average common stockholders equity)*100 Net Income 537,408 173,910 Average common stockholders equity 662,300 152,900 Return on common stockholders equity 81.14% 113.74% Note: Common stockholders equity = Common stock + Retained earnings