(Assets, Liabilities, & Stockholders Equity) Cash 490 Accounts payable 22,300 Ma
ID: 2632497 • Letter: #
Question
(Assets, Liabilities, & Stockholders Equity)
Cash 490 Accounts payable 22,300
Marketable securities 950
Notes payable 47,300
Accounts receivable 24,900
Total Current Liabilities 69,600
Inventories 45,300
Long-term Debt 22,950
Total Current Assets 71,640
Net Fixed Assets 77,900
Common stock equity 31,800
TOTAL ASSETS 149,540
Retained earnings 25,190
Total Stockholders' Equity 56,990
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 149,540
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Sales revenue $159,500
Less: Cost of good sold 106,300
Gross Profit $53,200
Less: Operating expenses
General and administrative $25,300
Depreciation expenses 10,720
Total Operating Expense 36,020
Operating Profits $17,180
Less: Interest expense 5,900
Net Profits Before Taxes $11,280
Less: Taxes 4,310
Earnings Avail. for Common Stockholders $6,970
Use the Balance Sheet and Income Statement to answer questions 16-23
16.) Current Ratio equals
a. 1.62
b. 1.03
c. 0.97
d. 0.38
17.) Quick Ratio equals
a. 1.62
b. 1.03
c. 0.97
d. 0.38
18.) Average collection period equals
a. 56.98
b. 0.16
c. 0.21
d. 76.57
19.) Average payment period equals (assume all purchases made in calendar year)
a. 56.98
b. 0.16
c. 0.21
d. 76.57
20.) Debt ratio equals
a. 0.371
b. 1.624
c. 1.616
d. 0.619
21.) Times interest earned equals
a. 1.18
b. 2.91
c. 27.03
d. 0.34
22.) Operating profit equals
a. 0.071
b. 0.334
c. 0.108
d. 0.044
23.) Net profit equals
a. 0.071
b. 0.334
c. 0.108
d. 0.044
Explanation / Answer
16. Current ratio = Current assets / current Liabilities = 71640/69600 = 1.03 option B.
17. Quick ration = Current assets - Inventories/ current Liabilities = 71640-45300/69600 = 0.38 option D
18. Average collection period:
Receivables turnover ratio = Net receivable sales/ Average accounts receivables
= 159500/24900 = 6.40 times
Average collection period = 365/Receivables turnover ratio=365/6.40 = 56.98 option A.
19. Average payment period:
Purchases = Cost of sales + Ending inventory
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