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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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Condensed balance sheet and income statement data for Jergan Corporation are presented here. Jergan Corporation Balance Sheets December 31 2020 2019 2018 Cash $ 29,000 $ 16,000 $ 17,000 Accounts receivable (net) 49,000 44,000 47,000 Other current assets 89,000 94,000 63,000 Investments 54,000 69,000 44,000 Plant and equipment (net) 499,000 369,000 357,000 $720,000 $ 592,000 $ 528,000 Current liabilities $84,000 $79,000 $69,000 Long-term debt 144,000 84,000 49,000 Common stock, $10 par 315,000 309,000 295,000 Retained earnings 177,000 120,000 115,000 $720,000 $ 592,000 $ 528,000 Jergan Corporation Income Statement For the Years Ended December 31 2020 2019 Sales revenue $735,000 $ 605,000 Less: Sales returns and allowances 39,000 29,000 Net sales 696,000 576,000 Cost of goods sold 426,000 365,000 Gross profit 270,000 211.000 Operating expenses (including income taxes) 179,520 147,640 Net income $ 90,480 $ 63,360 Additional information: 1. 2. You must compute dividends paid. All dividends were paid in cash. The market price of Jergan's common stock was $7.00, $ 7.50, and $ 8.50 for 2018, 2019. and 2020, respectively. (a) Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, eg 1.65. Round payout ratio and debt to assets ratio to O decimal places, eg 18%. Round all other answers to 1 decimal place, eg 6.8 or 6.8%) 2019 2020 Profit margin Gross profit rate * Asset turnover times times Earnings per share %24 %24 'Price-earnings ratio times times Payout ratio Debt to assets ratio
Transcribed Image Text:Condensed balance sheet and income statement data for Jergan Corporation are presented here. Jergan Corporation Balance Sheets December 31 2020 2019 2018 Cash $ 29,000 $ 16,000 $ 17,000 Accounts receivable (net) 49,000 44,000 47,000 Other current assets 89,000 94,000 63,000 Investments 54,000 69,000 44,000 Plant and equipment (net) 499,000 369,000 357,000 $720,000 $ 592,000 $ 528,000 Current liabilities $84,000 $79,000 $69,000 Long-term debt 144,000 84,000 49,000 Common stock, $10 par 315,000 309,000 295,000 Retained earnings 177,000 120,000 115,000 $720,000 $ 592,000 $ 528,000 Jergan Corporation Income Statement For the Years Ended December 31 2020 2019 Sales revenue $735,000 $ 605,000 Less: Sales returns and allowances 39,000 29,000 Net sales 696,000 576,000 Cost of goods sold 426,000 365,000 Gross profit 270,000 211.000 Operating expenses (including income taxes) 179,520 147,640 Net income $ 90,480 $ 63,360 Additional information: 1. 2. You must compute dividends paid. All dividends were paid in cash. The market price of Jergan's common stock was $7.00, $ 7.50, and $ 8.50 for 2018, 2019. and 2020, respectively. (a) Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, eg 1.65. Round payout ratio and debt to assets ratio to O decimal places, eg 18%. Round all other answers to 1 decimal place, eg 6.8 or 6.8%) 2019 2020 Profit margin Gross profit rate * Asset turnover times times Earnings per share %24 %24 'Price-earnings ratio times times Payout ratio Debt to assets ratio
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