Logout Open In App
Open In App
Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

Chapter 1: Q11PSB_3 (page 46)

AT&T and Verizon produce and market telecommunications products and are competitors. Key financial figures (in \( millions) for these businesses for a recent year follow.

Key Figures (\) millions) AT&T Verizon

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(126,723 \)110,875

Net income . . . . . . . . . . . . . . . . . . . . . . . 4,184 10,198

Average assets . . . . . . . . . . . . . . . . . . . . 269,868 225,233

Required 3. Which company is more successful in returning net income from its assets invested?

Short Answer

Expert verified

Verizon has a better return on assets than AT&T.

Step by step solution

01

Definition of Assets

The assets are defined as the economic resources owned by businesses and individuals which help in generating some income.

02

Comparison of Return on Assets

The return on assets of AT&T is 1.6% and the return on assets of Verizon is 4.5%. It can easily be observed that the return on assets of AT&T is less than the return on assets of Verizon. This means assets are more efficiently used by Verizon.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations.

May 1 G. Gram invested \(40,000 cash in the company in exchange for its common stock.

1 The company rented a furnished office and paid \)2,200 cash for May’s rent.

3 The company purchased \(1,890 of office equipment on credit.

5 The company paid \)750 cash for this month’s cleaning services.

8 The company provided consulting services for a client and immediately collected \(5,400 cash.

12 The company provided \)2,500 of consulting services for a client on credit.

15 The company paid \(750 cash for an assistant’s salary for the first half of this month.

20 The company received \)2,500 cash payment for the services provided on May 12.

22 The company provided \(3,200 of consulting services on credit.

25 The company received \)3,200 cash payment for the services provided on May 22.

26 The company paid \(1,890 cash for the office equipment purchased on May 3.

27 The company purchased \)80 of advertising in this month’s (May) local paper on credit; cash payment is due June 1.

28 The company paid \(750 cash for an assistant’s salary for the second half of this month.

30 The company paid \)300 cash for this month’s telephone bill.

30 The company paid \(280 cash for this month’s utilities.

31 The company paid \)1,400 cash in dividends to the owner (sole shareholder).

Required 2. Prepare the income statement and the statement of retained earnings for the month of May, and the balance sheet as of May 31

Identify the two main categories of accounting principles.

Ski-Doo Company manufactures, markets, and sells snowmobiles and snowmobile equipment and accessories. The average total assets for Ski-Doo is \(3,000,000. In its most recent year, Ski-Doo reported net income of \)201,000 on revenues of $1,400,000.

Required 4. What is the average total amount of liabilities plus equity for Ski-Doo Company?

Question: Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization’s business activities. Classify the following activities as part of the identifying (I), recording (R), or communicating (C) aspects of accounting. 1. Analyzing and interpreting reports. 2. Presenting financial information. 3. Keeping a log of service costs. 4. Measuring the costs of a product. 5. Preparing financial statements. 6. Seeing revenues generated from a service. 7. Observing employee tasks behind a product. 8. Registering cash sales of products sold.

The following financial statement information is from five separate companies.

Company Company Company Company Company

V W X Y Z

December 31, 2016

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . \(54,000 \) 80,000 \(141,500 \)92,500 $144,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 60,000 68,500 51,500 ?

December 31, 2017

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,000 100,000 186,500 ? 170,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 36,000 ? 65,800 42,000 42,000

During year 2017

Stock issuances . . . . . . . . . . . . . . . . . . . 5,000 20,000 ? 48,100 60,000

Net income (or loss) . . . . . . . . . . . . . . . . ? 40,000 18,500 24,000 32,000

Cash dividends . . . . . . . . . . . . . . . . . . . 5,500 2,000 0 20,000 8,000

Required 1. Answer the following questions about Company V.

a. What is the amount of equity on December 31, 2016?

b. What is the amount of equity on December 31, 2017?

c. What is the net income or loss for the year 2017?
See all solutions

Recommended explanations on Business Studies Textbooks

Managers

Read Explanation

Business Development

Read Explanation

Influences On Business

Read Explanation

Organizational Communication

Read Explanation

Operational Management

Read Explanation

Strategic Direction

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free