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BARRY'S SUPERSTORE BARRY'S SUPERSTORE Comparative Year-End Income Statements Comparative Year-End Balance Sheets Prior Year Current Year Prior Year Current Year Net Sales $100,000 $120,000 Assets: Cost of Goods Sold 50,000 60,000 Cash $90,000 $110,000 Gross Profit 50,000 60,000 Accounts Receivable 20,000 30,000 Inventory 35,000 40,000 Rent Expense Depreciation Expense Salaries Expense 5,000 5,500 Short-Term Investments 15,000 20,000 2,500 3,600 Total Current Asstes 160,000 200,000 3,000 5,400 Equipment Total Assets 40,000 50,000 Utility Expense 1,500 2,500 $200,000 $250,000 Operating Income 38,000 43,000 Liabilities: Accounts Payable $ 60,000 $ 75,000 Interest Expense Income Tax Expense 3,000 2,000 Unearned Revenue 10,000 25,000 5,000 6,000 Total Current Liabilities 70,000 100,000 Net Income $ 30,000 35,000 Notes Payable 40,000 50,000 Total Liabilities 110,000 150,000 Stockholder Equity Common Stock 75,000 80,000 Ending Retained Earnings Total Stockholder Equity 15,000 20,000 90,000 100,000 Total Liabilities and Stockholder Equity $200,000 $250,000

BARRY'S SUPERSTORE BARRY'S SUPERSTORE Comparative Year-End Income Statements Comparative Year-End Balance Sheets Prior Year Current Year Prior Year Current Year Net Sales $100,000 $120,000 Assets: Cost of Goods Sold 50,000 60,000 Cash $90,000 $110,000 Gross Profit 50,000 60,000 Accounts Receivable 20,000 30,000 Inventory 35,000 40,000 Rent Expense Depreciation Expense Salaries Expense 5,000 5,500 Short-Term Investments 15,000 20,000 2,500 3,600 Total Current Asstes 160,000 200,000 3,000 5,400 Equipment Total Assets 40,000 50,000 Utility Expense 1,500 2,500 $200,000 $250,000 Operating Income 38,000 43,000 Liabilities: Accounts Payable $ 60,000 $ 75,000 Interest Expense Income Tax Expense 3,000 2,000 Unearned Revenue 10,000 25,000 5,000 6,000 Total Current Liabilities 70,000 100,000 Net Income $ 30,000 35,000 Notes Payable 40,000 50,000 Total Liabilities 110,000 150,000 Stockholder Equity Common Stock 75,000 80,000 Ending Retained Earnings Total Stockholder Equity 15,000 20,000 90,000 100,000 Total Liabilities and Stockholder Equity $200,000 $250,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question

Compute the following ratio analysis

 

  1. Current Ratio
  2. Acid Test Ratio

Write your interpretation after the computation.

BARRY'S SUPERSTORE BARRY'S SUPERSTORE Comparative Year-End Income Statements Comparative Year-End Balance Sheets Prior Year Current Year Prior Year Current Year Net Sales $100,000 $120,000 Assets: Cost of Goods Sold 50,000 60,000 Cash $90,000 $110,000 Gross Profit 50,000 60,000 Accounts Receivable 20,000 30,000 Inventory 35,000 40,000 Rent Expense 5,000 5,500 Short-Term Investments 15,000 20,000 Total Current Asstes 200,000 Depreciation Expense Salaries Expense 2,500 3,600 160,000 3,000 5,400 Equipment 40,000 50,000 Utility Expense 1,500 2,500 Total Assets $200,000 $250,000 Operating Income 38,000 43,000 Liabilities: Accounts Payable $ 60,000 $ 75,000 Interest Expense 3,000 2,000 Unearned Revenue 10,000 25,000 Income Tax Expense 5,000 6,000 Total Current Liabilities 70,000 100,000 Net Income $ 30,000 $ 35,000 Notes Payable 40,000 50,000 Total Liabilities 110,000 150,000 Stockholder Equity Common Stock 75,000 80,000 Ending Retained Earnings Total Stockholder Equity 15,000 20,000 90,000 100,000 Total Liabilities and Stockholder Equity $200,000 $250,000
Transcribed Image Text:BARRY'S SUPERSTORE BARRY'S SUPERSTORE Comparative Year-End Income Statements Comparative Year-End Balance Sheets Prior Year Current Year Prior Year Current Year Net Sales $100,000 $120,000 Assets: Cost of Goods Sold 50,000 60,000 Cash $90,000 $110,000 Gross Profit 50,000 60,000 Accounts Receivable 20,000 30,000 Inventory 35,000 40,000 Rent Expense 5,000 5,500 Short-Term Investments 15,000 20,000 Total Current Asstes 200,000 Depreciation Expense Salaries Expense 2,500 3,600 160,000 3,000 5,400 Equipment 40,000 50,000 Utility Expense 1,500 2,500 Total Assets $200,000 $250,000 Operating Income 38,000 43,000 Liabilities: Accounts Payable $ 60,000 $ 75,000 Interest Expense 3,000 2,000 Unearned Revenue 10,000 25,000 Income Tax Expense 5,000 6,000 Total Current Liabilities 70,000 100,000 Net Income $ 30,000 $ 35,000 Notes Payable 40,000 50,000 Total Liabilities 110,000 150,000 Stockholder Equity Common Stock 75,000 80,000 Ending Retained Earnings Total Stockholder Equity 15,000 20,000 90,000 100,000 Total Liabilities and Stockholder Equity $200,000 $250,000
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