Santo Corporation experienced a fire on December 31, 2014 in which its financial

Question

Santo Corporation experienced a fire on December 31, 2014 in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances.

December 31, 2014 December 31, 2013 Cash Accounts receivable (net) Inventory Accounts payable Notes payable Common stock, $100 par Retained earnings $38,700 74,600 203,700 54,500 38,000 401,800 123,200 $ 17,700 127,300 190,500 89,600 62,800 401,800 106,900 Additional information: 1. The inventory turnover is 4.9 times 2. The return on common stockholders' equity is 23%. The company had no additional paid-in capital 3. The receivables turnover is 13.2 times 4. The return on assets is 19% 5. Total assets at December 31, 2013, were $611,800 Compute the following for Santo Corporation. (Round all answers to 0 decimal place, e.g. 2,150.) (a) Cost of goods sold for 2014 (b) Net credit sales for 2014 (c) Net income for 2014 (d) Total assets at December 31, 2014 965790 1332540 120,750 635,526

Explanation / Answer

c) return on common stock holders equity = 23%

net income

(401800+401800 + 123200 +106900) / 2 = 516850

516850 * 0.23 = 118875.5

d) return on assets = 19%

average assets = 118875.5 / 0.19 =625660.53

total assets = (625660.53 * 2) - 611800 = 639521.1

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