Cullumber company has these comparative balance sheet data:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cullumber company has these comparative
![### Additional Information for 2021:
1. **Net income** was **$28,000**.
2. **Sales on account** were **$453,000**. **Sales returns and allowances** amounted to **$27,250**.
3. **Cost of goods sold** was **$295,800**.
4. **Net cash provided by operating activities** was **$52,000**.
5. **Capital expenditures** were **$26,000**, and **cash dividends** were **$21,000**.
### Compute the following ratios at December 31, 2021:
(Use **365 days** for calculation. **Round answers to 1 decimal place**, e.g. **52.7**.)
---
**(a) Current ratio:**
\[ \_\_\_\_\_\_\ :1 \]
**(b) Accounts receivable turnover:**
\[ \_\_\_\_\_\_\ \text{times} \]
**(c) Average collection period:**
\[ \_\_\_\_\_\_\ \text{days} \]
**(d) Inventory turnover:**
\[ \_\_\_\_\_\_\ \text{times} \]
**(e) Days in inventory:**
\[ \_\_\_\_\_\_\ \text{days} \]
Note: No graphs or diagrams are present in the provided image.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fadfa93f3-2f01-4d0e-a09a-e44d84b16ba8%2F99416444-59fb-4ec2-a469-3cf2d6d965e9%2Foolsmx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Additional Information for 2021:
1. **Net income** was **$28,000**.
2. **Sales on account** were **$453,000**. **Sales returns and allowances** amounted to **$27,250**.
3. **Cost of goods sold** was **$295,800**.
4. **Net cash provided by operating activities** was **$52,000**.
5. **Capital expenditures** were **$26,000**, and **cash dividends** were **$21,000**.
### Compute the following ratios at December 31, 2021:
(Use **365 days** for calculation. **Round answers to 1 decimal place**, e.g. **52.7**.)
---
**(a) Current ratio:**
\[ \_\_\_\_\_\_\ :1 \]
**(b) Accounts receivable turnover:**
\[ \_\_\_\_\_\_\ \text{times} \]
**(c) Average collection period:**
\[ \_\_\_\_\_\_\ \text{days} \]
**(d) Inventory turnover:**
\[ \_\_\_\_\_\_\ \text{times} \]
**(e) Days in inventory:**
\[ \_\_\_\_\_\_\ \text{days} \]
Note: No graphs or diagrams are present in the provided image.
Transcribed Image Text:### Cullumber Company Comparative Balance Sheet Data
**Cullumber Company**
**Balance Sheets**
**December 31**
| **Category** | **2021** | **2020** |
|-----------------------------------------|----------|----------|
| **Assets:** | | |
| Cash | $38,600 | $33,000 |
| Accounts receivable (net) | $68,000 | $63,000 |
| Inventory | $63,000 | $53,000 |
| Property, plant and equipment (net) | $188,000 | $183,000 |
| **Total Assets** | $357,600 | $332,000 |
| **Liabilities and Equity:** | | |
| Accounts payable | $53,000 | $63,000 |
| Mortgage payable (15%, due in 15 years) | $103,000 | $103,000 |
| Common stock, $10 par | $143,000 | $123,000 |
| Retained earnings | $58,600 | $43,000 |
| **Total Liabilities and Equity** | $357,600 | $332,000 |
### Additional Information for 2021:
1. **Net income** was $28,000.
2. **Sales on account** were $453,000. Sales returns and allowances amounted to $27,250.
3. **Cost of goods sold** was $295,800.
4. **Net cash provided by operating activities** was $52,000.
5. **Capital expenditures** were $26,000, and **cash dividends** were $21,000.
### Explanation of Terms:
- **Assets:** Resources owned by the company that have economic value.
- **Cash**: Liquid assets that can be readily used for transactions.
- **Accounts Receivable (net)**: The amount of money owed to the company by its customers minus any allowances for doubtful accounts.
- **Inventory**: Goods available for sale.
- **Property, Plant, and Equipment (net)**: Long-term physical assets the company uses in its operations, net of depreciation.
- **Liabilities and Equity:** Claims on the company's assets.
- **Accounts Payable**: Obligations the company owes to suppliers or creditors.
- **Mortgage Payable**: Long-term
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