Selected Information for Uptown Spa Services and Downtown Spa Services

question 60

Essay

Selected information for Uptown Spa Services and Downtown Spa Services follows:
$$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Uptown Spa } \\\text { Services }\end{array} && { \begin{array} { l } \text { Downtown Spa } \\\text { Services }\end{array} } & \\\hline\ \text { Total Assets } & \$ 125,000& \text { Total Assets } & \$ 162,000 \\\hline \text { Total Owner's Equity } & \$ 90,000& \text { OTotal Owner's Equity } & \$ 137,000 \\\hline \text { Total Revenues } & \$ 82,000& \text { Total Revenues } & \$ 70,000 \\\hline \text { Net Income } & \$ 12,000 &\text { dNet Income } & \$ 18,000 \\\hline\end{array}$$ The total assets and total owner's equity balances are at December 31,2018.Total revenues and net income are for the year ended December 31,2018.There were no new capital contributions during the year.No owner withdrawals were taken.Average net assets are $128,000 for Uptown and $178,000 for Downtown.
Provide answers for the following questions.Show your work and explain your answer.
1.Which business owes more to creditors?
2.Which business has more owner's equity at the end of the year?
3.Which business had more expenses?
4.What is the ROA for each business? (Show this as a percentage and round to one decimal place)Based on ROA,which company is more profitable?

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Definitions:

LDL

Low-density lipoprotein, often called "bad" cholesterol, associated with increased risk of heart disease.

HDL

High-Density Lipoprotein, often referred to as "good" cholesterol, which helps to remove bad cholesterol from the bloodstream.

Lipids

A class of organic compounds that are fatty acids or their derivatives, involved in the structure and function of living cells.

Plasma

The liquid component of blood, minus the blood cells, that carries nutrients, hormones, and proteins throughout the body.