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MEGAFRAME COMPUTER COMPANY Balance Sheet As of December 31 ASSETS Cash...

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Accounting

MEGAFRAME COMPUTER COMPANY
Balance Sheet
As of December 31
ASSETS
Cash $ 50,000
Accounts receivable 70,000
Inventory 110,000
Net plant and equipment 220,000
Total assets $ 450,000
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable $ 70,000
Accrued expenses 50,000
Long-term debt 130,000
Common stock 70,000
Paid-in capital 40,000
Retained earnings 90,000
Total liabilities and stockholders equity $ 450,000
MEGAFRAME COMPUTER COMPANY
Income Statement
For the year ended December 31
Sales (all on credit) $ 875,000
Cost of goods sold 600,000
Gross profit $ 275,000
Sales and administrative expenses 30,000
Depreciation 55,000
Operating profit $ 190,000
Interest expense 25,000
Profit before taxes $ 165,000
Taxes (30%)49,500
Net income $ 115,500
Refer to the tables above. Using the DuPont method, return on assets (investment) for Megaframe Computer is approximately
Multiple Choice
35%.
13%.
22%.
26%.

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