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Problem
Given the financial statements for Jones Corporation and Smith Corporation:
JONES CORPORATION
Current Assets
Liabilities
Cash
$
29,700
Accounts payable
166,000
Accounts receivable
88,500
Bonds payable (long term)
82,100
Inventory
51,300
Long-Term Assets
Stockholders' Equity
Fixed assets
542,000
Common stock
150,000
Less: Accumulated depreciation
(154,700)
Paid-in capital
70,000
Net fixed assets*
387,300
Retained earnings
88,700
Total assets
556,800
Total liabilities and equity
Sales (on credit)
1,914,000
Cost of goods sold
771,000
Gross profit
1,143,000
Selling and administrative expense†
325,000
Less: Depreciation expense
59,600
Operating profit
758,400
Interest expense
9,200
Earnings before taxes
749,200
Tax expense
102,300
Net income
646,900
SMITH CORPORATION
39,800
76,500
Marketable securities
12,200
225,000
74,600
77,700
509,000
75,000
(252,600)
30,000
256,400
54,200
460,700
1,150,000
687,000
463,000
281,000
59,200
122,800
27,100
95,700
41,500
(a-1) Compute the following ratios.
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