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indly refer to the attached picture. I

indly refer to the attached picture. I

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 26E: Comprehensive income Anson Industries, Inc., reported the following information on its 20Y1 income...
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The comparative statement of financial position and statement of comprehensive income of Entity A on December 31, 20x1 are shown below: Entity A Entity A Statement of Financial Position Statement of Comprehensive Income As of December 31, 20x1 For the year ended December 31, 20x1 ASSETS 20x1 20x0 Sales 1,000,000 Cash and cash equivalents 440,000 200,000 Cost of sales (600,000) Accounts receivable 130,000 120,000 GROSS PROFIT 400,000 Inventory 120,000 480,000 Rent income 150,000 Prepaid assets 40,000 160,000 Depreciation expense (240,000) Total current assets 730,000 960,000 Insurance expense (120,000) Bad debts expense (30,000) Property, plant & equipment 760,000 440,000 Loss on sale of equipment (40,000) Total noncurrent assets 760,000 440,000 PROFIT FOR THE YEAR 120,000 Other comprehensive income TOTAL ASSETS 1,490,000 1,400,000 COMPREHENSIVE INCOME FOR THE YR. 120,000 LIABILITIES Trade and other payables 620,000 560,000 Requirements: Compute for the following financial ratios for the year 20x1: (round-off answers to two decimal places) а. Current ratio EQUITY b. Quick (Acid-test) ratio Owner's capital 870,000 840,000 c. Working capital d. Inventory turnover TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 Days of inventory (use 365 days) Accounts receivable turnover (assume all sales are on е. f. credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio Debt-to-equity ratio k. Gross profit ratio 1. j. Net profit ratio m. Return on assets n. Return on equity
Transcribed Image Text:The comparative statement of financial position and statement of comprehensive income of Entity A on December 31, 20x1 are shown below: Entity A Entity A Statement of Financial Position Statement of Comprehensive Income As of December 31, 20x1 For the year ended December 31, 20x1 ASSETS 20x1 20x0 Sales 1,000,000 Cash and cash equivalents 440,000 200,000 Cost of sales (600,000) Accounts receivable 130,000 120,000 GROSS PROFIT 400,000 Inventory 120,000 480,000 Rent income 150,000 Prepaid assets 40,000 160,000 Depreciation expense (240,000) Total current assets 730,000 960,000 Insurance expense (120,000) Bad debts expense (30,000) Property, plant & equipment 760,000 440,000 Loss on sale of equipment (40,000) Total noncurrent assets 760,000 440,000 PROFIT FOR THE YEAR 120,000 Other comprehensive income TOTAL ASSETS 1,490,000 1,400,000 COMPREHENSIVE INCOME FOR THE YR. 120,000 LIABILITIES Trade and other payables 620,000 560,000 Requirements: Compute for the following financial ratios for the year 20x1: (round-off answers to two decimal places) а. Current ratio EQUITY b. Quick (Acid-test) ratio Owner's capital 870,000 840,000 c. Working capital d. Inventory turnover TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 Days of inventory (use 365 days) Accounts receivable turnover (assume all sales are on е. f. credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio Debt-to-equity ratio k. Gross profit ratio 1. j. Net profit ratio m. Return on assets n. Return on equity
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