Financial ratios computed for Whittaker Inc. include the following: Current ratio 1.7 to 1 Acid-test ratio 1.4 to 1 2.5 to 1 Debt/equity ratio Inventory turnover Accounts receivable turnover 2.5 times 5.9 times Times interest earned 4.85 times Gross profit ratio 40% Return on investment 12.57% Earnings per share $11.95 • All sales during the year were made on account. Cash collections during the year exceeded sales by $18,000, and no uncollectible accounts were written off. • The balance of the accounts receivable account was $46,000 on January 1, 2020. • No common stock was issued during the year. • Dividends declared and paid during the year were $5,324. • The balance of the inventory account was $71,784 on January 1, 2020. • Interest expense on the income statement relates to the 15% bonds payable; $10,000 of these bonds were issued on May 1, 2020; the remaining amount of bonds payable were outstanding throughout the year. All bonds were issued at face amount. Required: a. Complete the income statement and balance sheet for Whittaker Inc.

Financial ratios computed for Whittaker Inc. include the following: Current ratio 1.7 to 1 Acid-test ratio 1.4 to 1 2.5 to 1 Debt/equity ratio Inventory turnover Accounts receivable turnover 2.5 times 5.9 times Times interest earned 4.85 times Gross profit ratio 40% Return on investment 12.57% Earnings per share $11.95 • All sales during the year were made on account. Cash collections during the year exceeded sales by $18,000, and no uncollectible accounts were written off. • The balance of the accounts receivable account was $46,000 on January 1, 2020. • No common stock was issued during the year. • Dividends declared and paid during the year were $5,324. • The balance of the inventory account was $71,784 on January 1, 2020. • Interest expense on the income statement relates to the 15% bonds payable; $10,000 of these bonds were issued on May 1, 2020; the remaining amount of bonds payable were outstanding throughout the year. All bonds were issued at face amount. Required: a. Complete the income statement and balance sheet for Whittaker Inc.

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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