Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio
Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution.
d.
e. Average Collection Period
f. Inventory Turnover Ratio
g. Average Days in Inventory
h. Number of days in Operating Cycle
i. Debt to Total Assets Ratio
j. Debt to Equity Ratio
k. Times Interest Earned Ratio
l. Gross Profit Ratio
m. Profit Margin Ratio
n. Return on Assets
o. Return on Equity
p. Assets Turnover Ratio
Transcribed Image Text:What I Can Do
Activity 5.5. Solving the Problem
Presented below is the Comparative Financial Statements of Tan General
Merchandise for the year 2018 and 2019:
TAN GENERAL MERCHANDISE
Comparative Statement of Financial Position
For the Year 2018 & 2019
2018
2019
ASSETS
Cash
Accounts Receivable
Inventory
Prepaid Rent
Total Current Assets
87,400.00
69,920.00
218,500.00
4,370.00
380, 190.00
110,000.00
90,000.00
129,000.00
12,000.00
341,000.00
Land
Building
Total Noncurrent Assets
493,810.00
500,000.00
993,810.00
550,000.00
600,000.00
1,150.000.00
TOTAL ASSETS
1,374,000.00
1,491,000.00
LIABILITIES
Accounts Payable
Notes payable
Total Current Liabilities
250,000.00
150,000,00
400.000.00
200,000.00
300.000.00
500,000.00
Mortgage Payable
Loan Payable
Total Noncurrent Liabilities
160,000.00
150,000.00
310,000.00
180,000.00
200,000.00
380,000.00
TOTAL LIABILITIES
710,000.00
880,000.00
OWNER'S EQUITY
664,000.00
1,374,000.00
611.000.00
Tan, Capital
Total Liabilities & Owner's Equity
1,491,000.00
22
TAN GENERAL MERCHANDISE
Comparative Statement of Comprehensive Income
For the Year 2018 & 2019
2018
Net Sales
Cost of Goods Sold
Gross Profit
Operating Expenses
Earnings Before Interest and Taxes 131,900.00
Interest Expense
Net Income Before Tax
2019
810,000.00
301.750.00
508,250.00
234,900,00
273,350.00
40.500.00
232,850.00
69,855.00
686,000.00
348,300.00
337,700.00
205,800.00
17.150.00
114,750.00
34,425.00
80,325.00
Income Tax
Net Income After Tax
162,995.00
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