LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 22,600 $ 17,700 Sales returns and allowances 1,000 100 Net sales $ 21,600 $ 17,600 Cost of merchandise (goods) sold 11,100 7,800 Gross profit $ 10,500 $ 9,800 Operating expenses: Depreciation $ 1,060 $ 780 Selling and administrative 4,900 3,800 Research 910 680 Miscellaneous 720 480 Total operating expenses $ 7,590 $ 5,740 Income before interest and taxes $ 2,910 $ 4,060 Interest expense 920 680 Income before taxes $ 1,990 $ 3,380 Provision for taxes 796 1,352 Net income $ 1,194 $ 2,028 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 11,700 $ 8,900 Accounts receivable 16,200 12,200 Merchandise inventory 8,200 13,700 Prepaid expenses 23,700 9,700 Total current assets $ 59,800 $ 44,500 Plant and equipment: Building (net) $ 14,200 $ 10,700 Land 13,200 8,700 Total plant and equipment $ 27,400 $ 19,400 Total assets $ 87,200 $ 63,900 Liabilities Current liabilities: Accounts payable $ 12,700 $ 7,000 Salaries payable 6,800 4,700 Total current liabilities $ 19,500 $ 11,700 Long-term liabilities: Mortgage note payable 21,700 20,200 Total liabilities $ 41,200 $ 31,900 Stockholders’ Equity Common stock $ 20,700 $ 20,800 Retained earnings 25,300 11,200 Total stockholders’ equity $ 46,000 $ 32,000 Total liabilities and stockholders’ equity $ 87,200 $ 63,900 Calculate the total debt to total assets ratio. (Round your answers to the nearest hundredth.)

LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 22,600 $ 17,700 Sales returns and allowances 1,000 100 Net sales $ 21,600 $ 17,600 Cost of merchandise (goods) sold 11,100 7,800 Gross profit $ 10,500 $ 9,800 Operating expenses: Depreciation $ 1,060 $ 780 Selling and administrative 4,900 3,800 Research 910 680 Miscellaneous 720 480 Total operating expenses $ 7,590 $ 5,740 Income before interest and taxes $ 2,910 $ 4,060 Interest expense 920 680 Income before taxes $ 1,990 $ 3,380 Provision for taxes 796 1,352 Net income $ 1,194 $ 2,028 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 11,700 $ 8,900 Accounts receivable 16,200 12,200 Merchandise inventory 8,200 13,700 Prepaid expenses 23,700 9,700 Total current assets $ 59,800 $ 44,500 Plant and equipment: Building (net) $ 14,200 $ 10,700 Land 13,200 8,700 Total plant and equipment $ 27,400 $ 19,400 Total assets $ 87,200 $ 63,900 Liabilities Current liabilities: Accounts payable $ 12,700 $ 7,000 Salaries payable 6,800 4,700 Total current liabilities $ 19,500 $ 11,700 Long-term liabilities: Mortgage note payable 21,700 20,200 Total liabilities $ 41,200 $ 31,900 Stockholders’ Equity Common stock $ 20,700 $ 20,800 Retained earnings 25,300 11,200 Total stockholders’ equity $ 46,000 $ 32,000 Total liabilities and stockholders’ equity $ 87,200 $ 63,900 Calculate the total debt to total assets ratio. (Round your answers to the nearest hundredth.)

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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LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2017 and 2018

	2018	2017
Gross sales	$	22,600	$	17,700
Sales returns and allowances		1,000		100
Net sales	$	21,600	$	17,600
Cost of merchandise (goods) sold		11,100		7,800
Gross profit	$	10,500	$	9,800
Operating expenses:
Depreciation	$	1,060	$	780
Selling and administrative		4,900		3,800
Research		910		680
Miscellaneous		720		480
Total operating expenses	$	7,590	$	5,740
Income before interest and taxes	$	2,910	$	4,060
Interest expense		920		680
Income before taxes	$	1,990	$	3,380
Provision for taxes		796		1,352
Net income	$	1,194	$	2,028

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	11,700	$	8,900
Accounts receivable		16,200		12,200
Merchandise inventory		8,200		13,700
Prepaid expenses		23,700		9,700
Total current assets	$	59,800	$	44,500
Plant and equipment:
Building (net)	$	14,200	$	10,700
Land		13,200		8,700
Total plant and equipment	$	27,400	$	19,400
Total assets	$	87,200	$	63,900
Liabilities
Current liabilities:
Accounts payable	$	12,700	$	7,000
Salaries payable		6,800		4,700
Total current liabilities	$	19,500	$	11,700
Long-term liabilities:
Mortgage note payable		21,700		20,200
Total liabilities	$	41,200	$	31,900
Stockholders’ Equity
Common stock	$	20,700	$	20,800
Retained earnings		25,300		11,200
Total stockholders’ equity	$	46,000	$	32,000
Total liabilities and stockholders’ equity	$	87,200	$	63,900

Calculate the total debt to total assets ratio. (Round your answers to the nearest hundredth.)

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