credit, balance sheet amounts at December 31, 2014, were inventory, $49,900, tot

Question

credit, balance sheet amounts at December 31, 2014, were inventory, $49,900, total assets, $179,400, common stock, $82,000, and retained earnings, $45,738.) BOT CORPORATION Income Statement For Year Ended December 31, 2015 Sales Cost of goods sold $449,600 297,950 Gross profit Operating expenses Interest expense 151,650 98,700 4,200 Income before taxes Income taxes 48,750 19,638 Net income $ 29,112 CABOT CORPORATION Balance Sheet December 31, 2015 Liabilities and Equity Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net S 16,500 4,200 4 100 S 10,000 Accounts payable 9,600 Accrued wages payable 31,200Income taxes payable 5000ong-term note payable, secured 2,800 Common stock 66,400 82.000 74,850 38,150 by mortgage on plant assets 151.300 Retained earnings s 248,050Total liabilities and equity $ 248,050 Total assets

Explanation / Answer

1 calculation of ratios 1 current ratio current assets / current liabilities current assets total assets - plant assets 248050 - 151300 96750 current liabilities accounts payable + accrued wages payable + income taxes payable 16500+4200+4100 24800 current ratio 96750/ 24800 3.90 2 acid ratio acid assets / current liabilities acid assets current assets - prepaid expenses - inventory 96750 - 2800 -38150 55800 acid ratio 55800/24800 2.25 3 days sales uncollected (accounts receivable / total credit sales ) * number of days (31200 / 449600 ) * 365 25.33 days 4 inventory turnover ratio cost of goods sold / inventory 297950 / 38150 7.81

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