BUSINESS COLLEGE

Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $17,600,000
Net operating income $6,200,000
Average operating assets $36,000,000

Required:
a. Compute the margin for Alyeska Services Company.
b. Compute the turnover for Alyeska Services Company.
c. Compute the return on investment (ROI) for Alyeska Services Company.

Answers

Answer 1
Answer:

Answer:

a. The margin for Alyeska Services Company: 35.23%

b. The turnover for Alyeska Services Company: 0.49

c. The return on investment (ROI) for Alyeska Services Company: 17.22%

Explanation:

a. The profit margin reflects a company's overall ability to turn income into profit, is calculated by formula:

Profit margin = (Net operating income/Net sales) x 100% = $6,200,000/$17,600,000 x 100% = 35.23%

b. Asset turnover helps investors understand how effectively companies are using their assets to generate sales. Asset turnover is calculated by using following formula:

Asset Turnover =  Total Sales/ Average Total Assets  = $17,600,000/$36,000,000 = 0.49

c. Return on investment (ROI) is calculated by using following formula:

ROI = Net income/Total investment  x 100%

In Alyeska Services Company,

ROI = Net operating income/Average operating assets  x 100% = $6,200,000/$36,000,000 x 100% = 17.22%

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Answers

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Answers

Answer and Explanation:

The Journal entry is shown below:-

a. Bad Debt Expense Dr, $36,800            ($40,000 – $3,200)

                    To Allowance for Doubtful Accounts $36,800

(Being the bad debt expense is recorded)

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Big-Mouth Frog Corporation had revenues of $200,000, expenses of $120,000, and dividends of $30,000. When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a Group of answer choices debit of $50,000. debit of $80,000. credit of $50,000. credit of $80,000.

Answers

Answer:

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Stevenson Company purchased equipment for $250,000 on January 1, 2010. The estimated salvage value is $50,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. On July 1, 2013 Stevenson sold the equipment for $100,000. The journal entry to record the sale of the equipment will include.

Answers

Answer: The following journal entries would be recorded upon disposal of the equipment:

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Cash                                                                   $100,000

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Loss on disposal of asset                                   $10,000

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