(L.OBJ. 7) Preparing a corporate balance sheet and measuring profitability [40—50 min]...

(L.OBJ. 7) Preparing a corporate balance sheet and measuring profitability [40—50 min]

The following accounts and December 31, 2010, balances of Florida Optical Corporation are arranged in no particular order

Requirements

1. Prepare the company’s classified balance sheet in account format at December 31, 2010.

2. Compute Honda Optical’s rate of return on total assets and rate of return on common stockholders’ equity for the year ended December 31, 2010.

3. Do these rates of return suggest strength or weakness? Give your reasoning.