I need Current Ratio, Acid Test Ratio, Return on Assets, Return on Equity, Debt
ID: 2577254 • Letter: I
Question
I need Current Ratio, Acid Test Ratio, Return on Assets, Return on Equity, Debt Ratio, Debt to Equity Ratio, Inventory Turnover, Earning Per Share, Price Earnings Ratio, Book Value per Share
181 Below is not homework unless assigned by your instructor The following data is for Laurel's Lassos, inc.: Balance 12/31/16 Balance 1231/17 18,900 50,000 5,000 90,000 2.600 290,000 20,000 71,900 90,000 12,000 50,000 3.600 340,000 80,000 140,000 12,000 35,000 6,000 8,000 6.500 10,000 130.000 300,000 120,000 1,200,000 700,000 220,000 48,000 46,000 60,000 15,000 6,000 14,500 27,150 Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Prepaid Insurance Equipment Accumulated Depreciation Land 10,000 30,000 10,000 4,000 7,500 5,000 160,000 150,000 70,000 Security Deposits Accounts Payable Wages Payable Rent Payable Interest Payable Taxes Payable Note Payable Common Stock (S1 each) Retained Earnings Sales Cost of Goods Sold Wage Expense Rent Expense Office Expenses Depreciation Expense Bad Debt Expense Insurance Expense Interest Expense Income Tax Expense The land was acquired on June 30, 2017 by exchanging 60,000 shares of common stock worth $60,000 and cash for the balance of the purchase price. purchase of the land) was sold on October 31, 2017 for $1 per share. The company did not sell any The additional common stock (other than that issued for the ipment during the year. All equipment purchased during the year was purchased for cash. The balance in retained earnings for each year is after all closing entries have been made. The Note Payable requires payments of $30,000 principal plus interest at 10% on June 30 of each year.Explanation / Answer
PROFIT AND LOSS FOR 2017
PARTICULARS
AMT IN $
Sales
1200000
Less:
Cost of goods sold
700000
Wage
220000
Rent
48000
Office
46000
Bad debt
15000
Insurance
6000
Depreciation
60000
Interest
14500
Income Tax
27150
1136650
Profit after Tax
63350
BALANCE SHEET
PARTICULARS
2016
2017
PARTICULARS
2016
2017
OWNER'S CAPITAL
FIXED ASSETS
Common Stock
150000
300000
Land
140000
Retained Earnings
70000
120000
Equipment
290000
340000
DEBT
Notes Payable
130000
100000
Allowance for Doubtful Accounts
5000
12000
Accumulated Depreciation
20000
80000
DEPOSITS
Security Deposits
10000
12000
CURRENT LIA.
Notes Payable
30000
30000
CURR ASSETS
Taxes Payable
5000
10000
Prepaid Insu
2600
3600
Interest Payable
7500
6500
Inventory
90000
50000
Rent Payable
4000
8000
Accounts Receivable
50000
90000
Wages Payable
10000
6000
Cash
18900
71900
Accounts Payable
30000
35000
86500
95500
161500
215500
461500
707500
461500
707500
Current Ratio
= Current Assets/Current Liabilities
=(Current Assets-Allowance for Doubtful Accounts)/Current Liabilities
=(215500-12000)/95500
2.13089
Acid Test Ratio
= (Current Assets-Inventory)/Current Liabilities
=(Current Assets-Allowance for Doubtful Accounts-Inventory)/Current Liabilities
=(215500-12000-50000)/95500
1.60733
Return on Assets
=Profit After Tax/Total Assets * 100
=63350/(Fixed Assets +Deposits+ Current Assets) * 100
=63350/((480000-80000)+12000+215500) * 100
10.10%
Return on Equity
=Profit after Tax / Total owner's capital * 100
=63350/(300000+120000) * 100
15.08%
Debt Ratio
=total Debt/ Total Capital
= 100000 / (300000+120000+100000)
0.192308
Debt to Equity Ratio
=Total Debt / Total Owner's Capital
=100000/(300000+120000)
0.238095
Inventory Turnover
=Cost of goods sold / Average Inventory
=700000/((90000+50000)/2)
10
Earning per share
=Profit after tax / Number of shares
Number of shares
=Common Stock / Rs. Per share
=300000/1
300000
Earning per share
=63350/300000
0.211167
Price Earning Ratio
=Price per share / Earning per share
=1/0.211167
4.735596
Book value per share
=Owners capital / Total number of shares
=(300000+120000)/300000
1.4
PROFIT AND LOSS FOR 2017
PARTICULARS
AMT IN $
Sales
1200000
Less:
Cost of goods sold
700000
Wage
220000
Rent
48000
Office
46000
Bad debt
15000
Insurance
6000
Depreciation
60000
Interest
14500
Income Tax
27150
1136650
Profit after Tax
63350
BALANCE SHEET
PARTICULARS
2016
2017
PARTICULARS
2016
2017
OWNER'S CAPITAL
FIXED ASSETS
Common Stock
150000
300000
Land
140000
Retained Earnings
70000
120000
Equipment
290000
340000
DEBT
Notes Payable
130000
100000
Allowance for Doubtful Accounts
5000
12000
Accumulated Depreciation
20000
80000
DEPOSITS
Security Deposits
10000
12000
CURRENT LIA.
Notes Payable
30000
30000
CURR ASSETS
Taxes Payable
5000
10000
Prepaid Insu
2600
3600
Interest Payable
7500
6500
Inventory
90000
50000
Rent Payable
4000
8000
Accounts Receivable
50000
90000
Wages Payable
10000
6000
Cash
18900
71900
Accounts Payable
30000
35000
86500
95500
161500
215500
461500
707500
461500
707500
Current Ratio
= Current Assets/Current Liabilities
=(Current Assets-Allowance for Doubtful Accounts)/Current Liabilities
=(215500-12000)/95500
2.13089
Acid Test Ratio
= (Current Assets-Inventory)/Current Liabilities
=(Current Assets-Allowance for Doubtful Accounts-Inventory)/Current Liabilities
=(215500-12000-50000)/95500
1.60733
Return on Assets
=Profit After Tax/Total Assets * 100
=63350/(Fixed Assets +Deposits+ Current Assets) * 100
=63350/((480000-80000)+12000+215500) * 100
10.10%
Return on Equity
=Profit after Tax / Total owner's capital * 100
=63350/(300000+120000) * 100
15.08%
Debt Ratio
=total Debt/ Total Capital
= 100000 / (300000+120000+100000)
0.192308
Debt to Equity Ratio
=Total Debt / Total Owner's Capital
=100000/(300000+120000)
0.238095
Inventory Turnover
=Cost of goods sold / Average Inventory
=700000/((90000+50000)/2)
10
Earning per share
=Profit after tax / Number of shares
Number of shares
=Common Stock / Rs. Per share
=300000/1
300000
Earning per share
=63350/300000
0.211167
Price Earning Ratio
=Price per share / Earning per share
=1/0.211167
4.735596
Book value per share
=Owners capital / Total number of shares
=(300000+120000)/300000
1.4
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