Selected current year-end financial statements of Concordia Corporation follow. All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $33,748. Compute the following: (1) current ratio, (2) acid-test ratio, (3) days’ sales uncollected, (4) inventory turnover, (5) days’ sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity. Round to one decimal place; for part 6, round to two decimals. CONCORDIA CORPORATIONBalance SheetDecember 31, of Current YearAssetsCash$ 10,000Short-term investments8,400Accounts receivable, net33,700Merchandise inventory32,150Prepaid expenses2,650Plant assets, net153,300Total assets$240,200Liabilities and EquityAccounts payable$ 17,500Accrued wages payable3,200Income taxes payable3,300Long-term note payable, secured by mortgage on plant assets63,400Common stock90,000Retained earnings62,800Total liabilities and equity$240,200CONCORDIA CORPORATIONIncome StatementDecember 31, of Current YearSales$448,600Cost of goods soldGross profit297,250151,350Operating expenses98,600Interest expense4,100Income before taxes48,650Income tax expense19,598Net income$ 29,052

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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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Selected current year-end financial statements of Concordia Corporation follow. All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $33,748.

Compute the following: (1) current ratio, (2) acid-test ratio, (3) days’ sales uncollected, (4) inventory turnover, (5) days’ sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity. Round to one decimal place; for part 6, round to two decimals.

CONCORDIA CORPORATION
Balance Sheet
December 31, of Current Year
Assets
Cash
$ 10,000
Short-term investments
8,400
Accounts receivable, net
33,700
Merchandise inventory
32,150
Prepaid expenses
2,650
Plant assets, net
153,300
Total assets
$240,200
Liabilities and Equity
Accounts payable
$ 17,500
Accrued wages payable
3,200
Income taxes payable
3,300
Long-term note payable, secured by mortgage on plant assets
63,400
Common stock
90,000
Retained earnings
62,800
Total liabilities and equity
$240,200
CONCORDIA CORPORATION
Income Statement
December 31, of Current Year
Sales
$448,600
Cost of goods sold
Gross profit
297,250
151,350
Operating expenses
98,600
Interest expense
4,100
Income before taxes
48,650
Income tax expense
19,598
Net income
$ 29,052

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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