Question

Prestige Worldwide - Trial balance as of December 31, 2018: Gross Service Revenue $ 115,981,250 Bad Debt Expense 2,655,000 (3,575,000) Discounts on Sales Salaries $ 55,825,000 Benefits 14,178,292 Administrative 4,342,500 Insurance 325,000 Interest 164,575 Depreciation 3,200,000 Maintenanсe 435,500 Purchased Services 6,146,500 Rent 2,240,000 Supplies 9,169,813 Utilities-Electricity 356,000 Cash and Cash Equivalents 9,545,000 Short-term Investments 2,750,000 7,125,000 Net Accounts Receivables $ Inventory Supplies $ 1,135,000 Property and Equipment 90,500,000 Accumulated Depreciation (43,500,000) Investment Income 94,500 Account Payable 2,375,000 Accrued Expenses 9,125,000 Notes Payable 16,515,000 Contributions Received by Prestige 1,000,000 Long-Term Debt 26,500,000 Retained Earnings 13,040,000 re

Calculate the following:

- Net income

- Operating income

- Total assets

- Total Liabilities

- Total stockholders equity

- Gross revenue

- Net revenue

- Operating margin ratio

- Net profit margin ratio

- Estimated cash flow

- Times interest earned ratio

Answer 1

1) Net Income:
Income Statement:
G Ser. Revenue	115981250
add:Investment Income	94500
Gross Revenue	116075750
less: Discount on sales	3575000
Net Revenue	112500750
Less:Expenses:
Bad Debt	2655000
Salaries	55825000
Benefits	14178292
Administrative	4342500
Insurance	325000
Interest	164575
Dep.	3200000
Maintenance	435500
Purchased services	6146500
Rent	2240000
Supplies	9169813
Utilities - Elec	356000
Total expenses	99038180
Net Income	13462570
2) operating income : Net income + interest expense
operating income = 13462570 + 164575 = 13627145
3) Total Assets:
Balance Sheet:
cash & cash equi	9545000
ST Investment	2750000
net Acc Receivables	7125000
Inv. - supplies	1135000
Current assets	20555000
Property & Equip	90500000
Acc. Dep.	-43500000
Total Assets	67555000
4) Total Liabilities:
Acc Payable	2375000
Accrued Expenses	9125000
Notes Payable	16515000
Current Liabilities	28015000
Long term debt	26500000
Total liabilities=	54515000
5) Total Stockholders' Equity:
Contributions received	1000000
retained earnings	13040000
add: Net Income	13462570
Total Stockholders' Equity	27502570
6) Gross Revenue =	116075750	( as per Income statement)
7) Net Revenue =	112500750
8) Operating margin ratio = Operating margin / Net Sales
Operating margin ratio = 13627145 / (115981250-3575000)=12.12%
9) Net profit margin ratio = 13462570/116075750 = 11.60%
10) Estimated cash flow =
Net Revenue	112500750
add: Total expenses	99038180
Less:depreciation	3200000
Estimated cash flow	208338930
11) TIER = Operating Income / Interest expense
13627145/164575 = 82.8