JUST (a) - (f) !!!!! WAHLBERG COMPANY Income Statements For the Years Ended Dece

Question

JUST (a) - (f) !!!!!

WAHLBERG COMPANY Income Statements For the Years Ended December 31 2019 2018 Net sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Other expenses and losses $1,890,540$1,750,500 1,006,000 744,500 479,000 265,500 1,058,540 832,000 500,000 332,000 20,000 245,500 73,000 $ 218,000 S 172,500 22,000 310,000 92,000 Interest expense Income before income taxes Income tax expense Net incomc WAHLBERG COMPANY Balance Sheets December 31 2019 2018 Assets Current asscts S60,100 S 64,200 50,000 Cash Debt investments (short-term) 74,000

Explanation / Answer

a) Earnings per Share = Net Income for 2019/Number of Common Shares

Number of Common Shares = Common Stock at 2019 end/Par Value per share

= $290,000/$5 per share = 58,000 shares

Earnings per Share = $218,000/58,000 shares = $3.76 per share

b) Return on Common Stockholder's Equity = Net Income/Average Stockholder's Equity

Average Stockholder's Equity = (Opening Balance 2019+Closing Balance 2019)/2

= ($465,400+$603,400)/2 = $534,400

Return on Common Stockholder's Equity = $218,000/$534,400 = 40.79%

c) Return on Assets = Net Income/Average Total Assets

Average Total Assets = (Opening Bal 2019+Closing Bal 2019)/2

= ($852,800+$1,026,900)/2 = $939,850

d) Current Ratio = Current Assets/Current Liabilities

= $377,900/$203,500 = 1.86

e) Accounts Receivable Turnover = Net Sales/Average Accounts Receivable

Average Accounts Receivable = (Opening Bal 2019+Closing Bal 2019)/2

= ($102,800+$117,800)/2 = $110,300

Accounts Receivable Turnover = $1,890,540/$110,300 = 17.14

f) Average Collection Period = 365 days/Accounts Receivable Turnover

= 365 days/17.14 = 21 days (approx)

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