3. The comparative statements of Corbin Company are presented below. Corey Compa
ID: 2555550 • Letter: 3
Question
3. The comparative statements of Corbin Company are presented below.
Corey Company
Balance Sheets
December 31
Assets
2015
2014
Current assets
Cash
$?21,000
$?18,000
Short-term investments
18,000
15,000
Accounts receivable (net)
91,000
74,000
Inventory
85,000
70,000
Total current assets
215,000
177,000
Plant assets (net)
423,000
383,000
Total assets
$638,000
$560,000
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$122,000
$110,000
Income taxes payable
23,000
20,000
Total current liabilities
145,000
130,000
Long-term liabilities
Bonds payable
120,000
80,000
Total liabilities
265,000
210,000
Stockholders' equity
Common stock ($5 par)
150,000
150,000
Retained earnings
223,000
200,000
Total stockholders' equity
373,000
350,000
Total liabilities and stockholders' equity
$638,000
$560,000
The common stock recently sold at $19.50 per share. Average common stockholder shares outstanding are 30,000 shares. Net income is $36,400. Net sales is $595,000. Cost of goods sold is $415,000.
Compute the following ratios for 2015
(a)
Current ratio.
(b)
Acid-test ratio.
(c)
Accounts receivable turnover.
(d)
Inventory turnover.
(e)
Profit margin.
(f)
Asset turnover.
(g)
Return on assets.
(h)
Return on common stockholders' equity.
(i)
Earnings per share.
(j)
Price-earnings ratio.
(k)
Debt to assets ratio.
Corey Company
Balance Sheets
December 31
Assets
2015
2014
Current assets
Cash
$?21,000
$?18,000
Short-term investments
18,000
15,000
Accounts receivable (net)
91,000
74,000
Inventory
85,000
70,000
Total current assets
215,000
177,000
Plant assets (net)
423,000
383,000
Total assets
$638,000
$560,000
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$122,000
$110,000
Income taxes payable
23,000
20,000
Total current liabilities
145,000
130,000
Long-term liabilities
Bonds payable
120,000
80,000
Total liabilities
265,000
210,000
Stockholders' equity
Common stock ($5 par)
150,000
150,000
Retained earnings
223,000
200,000
Total stockholders' equity
373,000
350,000
Total liabilities and stockholders' equity
$638,000
$560,000
Explanation / Answer
1 Current ratio = Current assets / current Liabilities Current assets 215000 Current liabilities 145000 Current ratio 1.5 2 Acid test ratio = (current assets - inventory )/ current liabilities Acid test 130000 (215000-85000) Current liabilities 145000 Acid test ratio 0.9 3 Receivable turnover = Net sales / Average accounts receivable Net sales 595000 Beginning accounts receivable 74000 Ending accounts receivable 91000 Average accounts receivable 82500 Average accounts receivable = (Beginning + ending )/2 Receivable turnover 7.2 4 Days sales uncollected = 365 / accounts receivable tunover Days sales uncollected 51 5 Inventory turnover = Cost of goods sold / Average inventory Cost of goods sold 415000 Beginning inventory 70000 Ending inventory 85000 Average inventory 77500 Average inventory = (Beginning + Ending )/2 Inventory turnover 5.4 6 Days sale in inventory = 365 / inventory turnover Days sales in inventory 68
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.