Question

Exercise D12-10 Carla Vista Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2015 and 2016 follow Carla Vista Medical Comparative Balance Sheet As of December 31 2016 2015 Assets Current assets Cash Accounts receivable, net Inventory Other current assets $300,000 $417,500 200776,400 681,000 1,065,200 726,000 34,000 247,000 Total current assets 2,465,200 2,121,900 8,852,440 8,430,430 $11,317,640 $10,552,330 Property, plant,&equipment, net Total assets Liabilities and Stockholders Equity Current liabilities Long-term debt Total liabilities Preferred stock, $5 par value Common stock, $0.25 par value Retained earnings 3,118,000 $2,846,100 3,702,600 3,892,650 6,820,600 6,738,750 58,600 103,850 4,298,440 3,651,130 4,497,040 3,813,580 58,600 140,000 Total stockholders' equity Total liabilities and stockholders' equity $11,317,640 $10,552,330 Carla Vista Medical Statement and Statement of Retained Earnings mparative Income

Answer 1

Answer
1	Gross margin percentage = Gross Profit ) / sales
	$ 47,83,000 / $ 10,420,000
	45.9%
2	Return on Assets = Net income / Average total assets
	$10,84,860 / [(11,317,640+10,552,330)/2]
	$10,84,860 / 1,09,34,985
	9.9%
3	Return on common stockholders equity
	Net income - Preferred dividends / Average common stockholders equity
	$10,84,860- $29550/ $41,55,310
	25.4%