j. Rate of Return on invested capital k. Cash flow from Operations to Total Liabilities I. Ratio of Stockholders' Equity to Total Liabilities
j. Rate of Return on invested capital k. Cash flow from Operations to Total Liabilities I. Ratio of Stockholders' Equity to Total Liabilities
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Compute for the following:
![The data shown below were obtained from the financial records of the BST Corporation
for the year ended December 31, 2020.
Sound Break Corporation
Income and Retained Earnings Statement
For the year Ended December 31, 2020
Net Sales
P1,000,000
Cost of Goods Sold:
Inventory, Dec. 31, 2019
P250,000
Purchases
720,000
Total Goods Available
P970,000
Inventory
220,000
750,000
Gross Margin on Sales
Selling and Administrative (including
P 250,000
Depreciation of P20,000)
125,000
Net Income before Tax
P 125,000
Provision for Income Tax
35,000
Net Income for the Year
P
90,000
Retained Earnings, beginning
130,000
Total
P
220,000
Dividends Paid
30,000
Retained Earnings, December 31, 2020
P
190,000
Sound Break Corporation
BALANCE SHEET
December 31, 2019 and 2020
ASSETS
2019
2020
Current Assets:
Cash
P 75,000
P 85,000
Marketable Securities
25,000
25,000
Trade Receivables, net
185,000
245,000
Inventory, at cost
250,000
220,000
Prepaid Expenses
15,000
10,000
Total Current Assets
P550,000
P585,000
Property and Other Assets:
Equipment, net
P340,000
P320,000
Other Assets
15,000
15,000
Total Property and Other Assets
P355,000
P335,000
Total Assets
P905,000
P920,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade Payables
P185,000
P165,000
Accrued Expenses
20,000
25,000
Other Current Liabilities
10,000
10,000
Total Current Liabilities
P215,000
P200,000
Long-Term Liability
Mortgage Payable
P120,000
P120,000
Stockholders' Equity
Capital Stock, P100 par
P300,000
P300,000
Additional Paid-In Capital
30,000
30,000
Retained Earnings Appropriated
80,000
80,000
Retained Earnings Unappropriated
160,000
190,000
Total Stockholders' Equity
P570,000
P600,000
Total Liabilities and Stockholders' Equity
P905,000
P920,000
REQUIRED:
Compute the following ratios and measurements for 2020:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2e39e61-dca9-41c1-9f54-094b5c9d6d45%2F15b09b5a-6d14-4b97-b8de-a7bf72bd1339%2Fz41fc3v_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The data shown below were obtained from the financial records of the BST Corporation
for the year ended December 31, 2020.
Sound Break Corporation
Income and Retained Earnings Statement
For the year Ended December 31, 2020
Net Sales
P1,000,000
Cost of Goods Sold:
Inventory, Dec. 31, 2019
P250,000
Purchases
720,000
Total Goods Available
P970,000
Inventory
220,000
750,000
Gross Margin on Sales
Selling and Administrative (including
P 250,000
Depreciation of P20,000)
125,000
Net Income before Tax
P 125,000
Provision for Income Tax
35,000
Net Income for the Year
P
90,000
Retained Earnings, beginning
130,000
Total
P
220,000
Dividends Paid
30,000
Retained Earnings, December 31, 2020
P
190,000
Sound Break Corporation
BALANCE SHEET
December 31, 2019 and 2020
ASSETS
2019
2020
Current Assets:
Cash
P 75,000
P 85,000
Marketable Securities
25,000
25,000
Trade Receivables, net
185,000
245,000
Inventory, at cost
250,000
220,000
Prepaid Expenses
15,000
10,000
Total Current Assets
P550,000
P585,000
Property and Other Assets:
Equipment, net
P340,000
P320,000
Other Assets
15,000
15,000
Total Property and Other Assets
P355,000
P335,000
Total Assets
P905,000
P920,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade Payables
P185,000
P165,000
Accrued Expenses
20,000
25,000
Other Current Liabilities
10,000
10,000
Total Current Liabilities
P215,000
P200,000
Long-Term Liability
Mortgage Payable
P120,000
P120,000
Stockholders' Equity
Capital Stock, P100 par
P300,000
P300,000
Additional Paid-In Capital
30,000
30,000
Retained Earnings Appropriated
80,000
80,000
Retained Earnings Unappropriated
160,000
190,000
Total Stockholders' Equity
P570,000
P600,000
Total Liabilities and Stockholders' Equity
P905,000
P920,000
REQUIRED:
Compute the following ratios and measurements for 2020:
![j. Rate of Return on invested capital
k. Cash flow from Operations to Total Liabilities
I. Ratio of Stockholders' Equity to Total Liabilities](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2e39e61-dca9-41c1-9f54-094b5c9d6d45%2F15b09b5a-6d14-4b97-b8de-a7bf72bd1339%2Fn4d560a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:j. Rate of Return on invested capital
k. Cash flow from Operations to Total Liabilities
I. Ratio of Stockholders' Equity to Total Liabilities
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