Exercise 14-11 Wiemers Corporation\'s comparative balance sheets are presented b

Question

Exercise 14-11 Wiemers Corporation's comparative balance sheets are presented below WIEMERS CORPORATION Balance Sheets December 31 2017 2016 Cash Accounts receivable (net) Inventory Land Buildings Accumulated depreciation-buildings $3,500 23,500 7,400 25,500 70,100 (14,600 (10,900) $111,700 $119,100 31,200 69,400 18,500 $111,700 $119,100 $4,100 21,500 10,500 20,100 70,100 Accounts payable Common stock Retained earnings $11,800 74,100 25,800 Wiemers's 2017 income statement included net sales of $102,000, cost of goods sold of $60,900, and net income of $14,900 Compute the following ratios for 2017, (Round answers to 2 decimal places, eg. 1.64, or 1.64% .) Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover Profit margin Asset turnover imes imes imes Return on assets Return on common stockholders' equity Debt to assets ratio

Explanation / Answer

Answer:-The following financial data of year 2017 are as follows:-

                

1)- Current Ratio=Current Assets/ Current Liabilities

                     =$4100+$21500+$10500/$11800 =3.06 times

2) Acid-test (Quick ratio):- Current assets-Inventory-Prepaid expenses/Current Liabilities

                                =$36100-$10500/$11800

                                =$25600/$11800 =2.17 times

3)- Accounts receivable turnover ratio = Net credit sales/Average accounts receivable

                                           =$102000/($23500+$21500/2 )

                                           =$102000/$22500 =4.53 times

4)- Inventory turnover ratio= Cost of goods sold/Average inventory

                                              =$60900/($7400+$10500/2)

                                             =6.80 times

5)- Debt-equity ratio =Total liabilities/Stockholder’s equity

                                 =$11800/$74100 =.16

6)-Profit margin =(Net income/Net sales)*100

=($14900/$102000)*100 =14.61%

7)-Return on assets =($14900/$111700)*100 =13.34%

8)-Asset turnover= Net sales/Average total assets

=$102000/($119100+$111700)/2

=$102000/115400 =.88 times

9)-Return on common stockholder’s equity ={$14900/($69400+$74100)/2}

=20.77%

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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