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:

Allergy

An immune system response to a foreign substance (allergen) that is not typically harmful to the body, which can cause various symptoms.

Chronic Obstructive Pulmonary Disease

A group of lung conditions that cause breathing difficulties, including emphysema and chronic bronchitis.

Poor Appetite

Reduced desire to eat, which can be a symptom of various medical conditions or may occur as a side effect of certain treatments.

Weight Loss

The reduction of total body mass due to a loss of fluid, body fat, or lean mass, often pursued for health, fitness, or aesthetic reasons.