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Case 3 Incomplete financial statements for Pepper Industries follow: Pepper Industries Pepper Industries The following additional information is available about the company: Income Statement For the year ended March 31, 2021 Balance sheet a. All sales during the year were on account b. There was no change in the number of shares of common stock outstanding during the March 31, 2021 Step Step year. e. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year. d. Selected balances at the beginning of the current year were: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Current assets: 4,200,000 Cash Accounts receivable, net 10 Inventory 270,000 Accounts receivable Inventory Total assets Total current assets Plant and equipment, net 19 80,000 360,000 Total assets 18 Net income before taxes 1,800.000 Incomes taxes (30%) Liabilities: Net income e. Selected financial ratios computed from the statements above for the current year are: Earnings per share Debt to equity ratio Accounts receivable turnover Current ratio Return on total assets Times interest earned ratio Acid-test ratio Inventory turnover ratio 4 Current liabilities 320.000 2.30 Bonds payable, 10% 12 0.875 Total labilities 13 14.0 2.75 18% Stockholders' equity Common stock, $5 par value Retianed earnings Total stockholders' equity 14 6.75 16 1.25 IS 6.50 Total liabilities & stockholders' equity 17

Case 3 Incomplete financial statements for Pepper Industries follow: Pepper Industries Pepper Industries The following additional information is available about the company: Income Statement For the year ended March 31, 2021 Balance sheet a. All sales during the year were on account b. There was no change in the number of shares of common stock outstanding during the March 31, 2021 Step Step year. e. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year. d. Selected balances at the beginning of the current year were: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Current assets: 4,200,000 Cash Accounts receivable, net 10 Inventory 270,000 Accounts receivable Inventory Total assets Total current assets Plant and equipment, net 19 80,000 360,000 Total assets 18 Net income before taxes 1,800.000 Incomes taxes (30%) Liabilities: Net income e. Selected financial ratios computed from the statements above for the current year are: Earnings per share Debt to equity ratio Accounts receivable turnover Current ratio Return on total assets Times interest earned ratio Acid-test ratio Inventory turnover ratio 4 Current liabilities 320.000 2.30 Bonds payable, 10% 12 0.875 Total labilities 13 14.0 2.75 18% Stockholders' equity Common stock, $5 par value Retianed earnings Total stockholders' equity 14 6.75 16 1.25 IS 6.50 Total liabilities & stockholders' equity 17

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Compute the missing amounts on the company’s financial statements. (Hint: What’s the difference between the acid-test ratio and the current ratio?)
10. Gross margin
11. Selling and administrative expenses
12. Bonds payable

Case 3 Incomplete financial statements for Pepper Industries follow: Pepper Industries Pepper Industries The following additional information is available about the company: Income Statement For the year ended March 31, 2021 Balance sheet a. All sales during the year were on account b. There was no change in the number of shares of common stock outstanding during the March 31, 2021 Step Step year. e. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year. d. Selected balances at the beginning of the current year were: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Current assets: 4,200,000 Cash Accounts receivable, net 10 Inventory 270,000 Accounts receivable Inventory Total assets Total current assets Plant and equipment, net 19 80,000 360,000 Total assets 18 Net income before taxes 1,800.000 Incomes taxes (30%) Liabilities: Net income e. Selected financial ratios computed from the statements above for the current year are: Earnings per share Debt to equity ratio Accounts receivable turnover Current ratio Return on total assets Times interest earned ratio Acid-test ratio Inventory turnover ratio 4 Current liabilities 320.000 2.30 Bonds payable, 10% 12 0.875 Total labilities 13 14.0 2.75 18% Stockholders' equity Common stock, $5 par value Retianed earnings Total stockholders' equity 14 6.75 16 1.25 IS 6.50 Total liabilities & stockholders' equity 17
Transcribed Image Text:Case 3 Incomplete financial statements for Pepper Industries follow: Pepper Industries Pepper Industries The following additional information is available about the company: Income Statement For the year ended March 31, 2021 Balance sheet a. All sales during the year were on account b. There was no change in the number of shares of common stock outstanding during the March 31, 2021 Step Step year. e. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year. d. Selected balances at the beginning of the current year were: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Current assets: 4,200,000 Cash Accounts receivable, net 10 Inventory 270,000 Accounts receivable Inventory Total assets Total current assets Plant and equipment, net 19 80,000 360,000 Total assets 18 Net income before taxes 1,800.000 Incomes taxes (30%) Liabilities: Net income e. Selected financial ratios computed from the statements above for the current year are: Earnings per share Debt to equity ratio Accounts receivable turnover Current ratio Return on total assets Times interest earned ratio Acid-test ratio Inventory turnover ratio 4 Current liabilities 320.000 2.30 Bonds payable, 10% 12 0.875 Total labilities 13 14.0 2.75 18% Stockholders' equity Common stock, $5 par value Retianed earnings Total stockholders' equity 14 6.75 16 1.25 IS 6.50 Total liabilities & stockholders' equity 17
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