Hi I need help with with three problems. I\'m really having a hard time. This fi
ID: 2727183 • Letter: H
Question
Hi I need help with with three problems. I'm really having a hard time. This first picture is the word problem. The two pictures below is the questions. I need help showing my work.c. 1.15 d. 1.12 e.) None of the above Jerry Rice and Grain Stores has $4,000,000 in yearly sales. The firm earns 3.5 percent on each dollar of sales and turns over its assets 2.5 times per year. It has $100,000 in current liabilities and $300,000 in long-term liabilities. in Stores has $4,00000 in yearly sales. The firm earms 3.5 percent on each dollar Total assets
Explanation / Answer
Answer 5.
In the problem we have given that asset turnover ration is 2.5 that means = sales/Total Assets = 2.5
we have given the sales is $ 4000000 , then
4000000 / Total Assets = 2.5
4000000/2.5 = Total Assets
$1600000 = Total Assets
Now , we have to find out stock holder equity
total liability = stock holder equity + long term liability + current liability
and on the other side total liability must be equal to total assets
therefore, total liability = total assets
Total liability = $1600000
therefore, total liability = stock holder equity + long term liability + current liability
1600000 = stock holder equity + 300000 + 100000
stock holder equity = $ 1200000 = option B
Answer 6
we have to find out return on stock holder equity , which is calculated by the formula
Earning / stock holder equity = return on stock holder equity
Earning = 3.5% of 4000000 = 140000
therefore , 140000/1200000 = 0.1166 = 11.67% = option (d)
Answer 7 . For calculation of new level of sale , there must be certain modification in existing problem or other condition should be provided.