The following items are taken from the financial statements of Grove Company for

Question

The following items are taken from the financial statements of Grove Company for 2012:

Accounts Payable $18,500

Accounts Receivable 4,000

Accumulated Depreciation 4,800

Bonds Payable 18,000

Cash 24,000

Common Stock 25,000

Cost of Goods Sold 17,000

Depreciation Expense 4,800

Dividends 5,300

Equipment 44,000

Interest Expense 2,500

Patents 7,500

Retained Earnings, January 1 16,000

Salaries Expense 5,200

Sales Revenue 36,500

Supplies 4,500

Instructions:

(a) Prepare an Income Statement, Statement of Retained Earnings and a Classified Balance Sheet for Grove Company.

(b) Compute the following ratios and values: 1. Current ratio 2. Debt to total assets ratio 3. Working capital 4. Earnings per share (Grove’s average number of shares outstanding during the year was 5,000.)

Explanation / Answer

Grove Company Income Statement for the period ending Dec 31 2012 Details Amt$ Sales Revenue            36,500 Less , Cost Of goods sold            17,000 Gross Profit            19,500 Less : Opearating Expenses Salaries expenses              5,200 Depreciation expense              4,800 EBIT              9,500 Less : Interest Expense              2,500 Net Income              7,000 Statement of Retained Earning Opening Balance retained earning Jan 1 2012            16,000 Add : Profit 2012              7,000 less : Dividend paid 2012              5,300 Reatined Earning balance Dec 31 2012.            17,700 Grove Company Balance Sheet   As on Dec 31 2012 Details Amt $ Assets Current Assets Accounts receivable              4,000 Cash            24,000 Supplies              4,500 Total Current Asset            32,500 Non Current Asssets Equipment            44,000 Accumulated Depreciation            (4,800) Net Fixed Asset            39,200 Intangible assets Patent              7,500 Total Intangible assets              7,500 Total Assets            79,200 Liabilities & Equities Current Laibilities Accounts Payable            18,500 Total Current Laibilities            18,500 Non Current Liabilities Bond Payable            18,000 Total Non Current Liabilities            18,000 Stock Holders equity Common stock            25,000 Retained earning            17,700 Total Stock Holders equity            42,700 Total Liabilities & Equities            79,200

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.