E. Declared a cash dividend, 5325,000. F. Declared a common stock dividend on co
ID: 340734 • Letter: E
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E. Declared a cash dividend, 5325,000. F. Declared a common stock dividend on common stock, $150,000. G. Borrowed cash from bank on a long-term note, $1,000,000. H. Received cash on account, $75,000. 1. Issued additional shares of stock for cash, $2,000,000. J. Paid cash for prepaid expenses, $200,000. PR 14-4B Measures of liquidity, solvency and profitability 9. Ratio of liabilities The comparative financial statements of Stargel Inc. are as foll Obj. 3, 4, 5 price of Stargel to stockholders' common stock was $119.70 on December 31, 20Y2. equity, 0.4 Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 . $5,375,000 $4,545,000 925,000 $5,470,000 EXCEL TEMPLATE Net income. Total Dividends: 900,000 $6,275,000 On preferred stock On common stock... Total dividends 45,000 50,000 45,000 50,000 . . 95,000 95,000 Retained earnings, December 31 56.180,000 $5375000 .Explanation / Answer
Q: PR 14-4B – Measures of liquidity, solvency and profitability
1. Working Capital = Current Asset – Current Liability
Current Asset => 36,90,000
Current liability => 9,00,000
Working Capital = 36,90,000 – 9,00,000 = 27,90,000
2. Current Ratio => Current Asset/Current Liability
=> 36,90,000/9,00,000 = 4.1
3. Quick Ratio = Liquid Current Assets/ Current Liability
Quick Ratio
Cash + Marketable Securities + Receivables
Current Liabilities
=> (5,00,000+10,10,000+740,000)/ 9,00,000 = 2.5
4. Account Receivables Turnover Ratio = Net Credit Sales/ Average Accounts Receivable
=> 1,00,00,000/7,40,000 = 13.51
5. Number of days sales in receivable =
(Accounts receivable ÷ Annual revenue) x Number of days in the year
=> (7,40,000/1,00,00,000) * 360 = 26.64
6. Inventory Turnover Ratio = Cost of goods sold/ Average Inventory
=> 53,50,000/11,90,000=4.5
7. Number of days sales in inventory = Number of days in a year/ Inventory Turnover Ratio
=> 360/4.5 = 80
8. Ratio of Fixed Assets to Long Term Liabilities = Fixed Assets/ Long Term Liability
=> 3740000/ 1700000 = 2.2
Quick Ratio
Cash + Marketable Securities + Receivables
Current Liabilities
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