LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 19,600 $ 15,450 Sales returns and allowances 1,000 100 Net sales $ 18,600 $ 15,350 Cost of merchandise (goods) sold 11,850 8,850 Gross profit $ 6,750 $ 6,500 Operating expenses: Depreciation $ 760 $ 630 Selling and administrative 2,650 2,300 Research 610 530 Miscellaneous 420 330 Total operating expenses $ 4,440 $ 3,790 Income before interest and taxes $ 2,310 $ 2,710 Interest expense 620 530 Income before taxes $ 1,690 $ 2,180 Provision for taxes 676 872 Net income $ 1,014 $ 1,308 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 12,300 $ 9,300 Accounts receivable 16,800 12,800 Merchandise inventory 8,800 14,300 Prepaid expenses 24,300 10,300 Total current assets $ 62,200 $ 46,700 Plant and equipment: Building (net) $ 14,800 $ 11,300 Land 13,800 9,300 Total plant and equipment $ 28,600 $ 20,600 Total assets $ 90,800 $ 67,300 Liabilities Current liabilities: Accounts payable $ 13,300 $ 7,500 Salaries payable 7,300 5,300 Total current liabilities $ 20,600 $ 12,800 Long-term liabilities: Mortgage note payable 22,300 20,800 Total liabilities $ 42,900 $ 33,600 Stockholders’ Equity Common stock $ 21,500 $ 21,200 Retained earnings 26,400 12,500 Total stockholders’ equity $ 47,900 $ 33,700 Total liabilities and stockholders’ equity $ 90,800 $ 67,300 Calculate the asset turnover 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 $ 19,600 $ 15,450 Sales returns and allowances 1,000 100 Net sales $ 18,600 $ 15,350 Cost of merchandise (goods) sold 11,850 8,850 Gross profit $ 6,750 $ 6,500 Operating expenses: Depreciation $ 760 $ 630 Selling and administrative 2,650 2,300 Research 610 530 Miscellaneous 420 330 Total operating expenses $ 4,440 $ 3,790 Income before interest and taxes $ 2,310 $ 2,710 Interest expense 620 530 Income before taxes $ 1,690 $ 2,180 Provision for taxes 676 872 Net income $ 1,014 $ 1,308 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 12,300 $ 9,300 Accounts receivable 16,800 12,800 Merchandise inventory 8,800 14,300 Prepaid expenses 24,300 10,300 Total current assets $ 62,200 $ 46,700 Plant and equipment: Building (net) $ 14,800 $ 11,300 Land 13,800 9,300 Total plant and equipment $ 28,600 $ 20,600 Total assets $ 90,800 $ 67,300 Liabilities Current liabilities: Accounts payable $ 13,300 $ 7,500 Salaries payable 7,300 5,300 Total current liabilities $ 20,600 $ 12,800 Long-term liabilities: Mortgage note payable 22,300 20,800 Total liabilities $ 42,900 $ 33,600 Stockholders’ Equity Common stock $ 21,500 $ 21,200 Retained earnings 26,400 12,500 Total stockholders’ equity $ 47,900 $ 33,700 Total liabilities and stockholders’ equity $ 90,800 $ 67,300 Calculate the asset turnover 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	$	19,600	$	15,450
Sales returns and allowances		1,000		100
Net sales	$	18,600	$	15,350
Cost of merchandise (goods) sold		11,850		8,850
Gross profit	$	6,750	$	6,500
Operating expenses:
Depreciation	$	760	$	630
Selling and administrative		2,650		2,300
Research		610		530
Miscellaneous		420		330
Total operating expenses	$	4,440	$	3,790
Income before interest and taxes	$	2,310	$	2,710
Interest expense		620		530
Income before taxes	$	1,690	$	2,180
Provision for taxes		676		872
Net income	$	1,014	$	1,308

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	12,300	$	9,300
Accounts receivable		16,800		12,800
Merchandise inventory		8,800		14,300
Prepaid expenses		24,300		10,300
Total current assets	$	62,200	$	46,700
Plant and equipment:
Building (net)	$	14,800	$	11,300
Land		13,800		9,300
Total plant and equipment	$	28,600	$	20,600
Total assets	$	90,800	$	67,300
Liabilities
Current liabilities:
Accounts payable	$	13,300	$	7,500
Salaries payable		7,300		5,300
Total current liabilities	$	20,600	$	12,800
Long-term liabilities:
Mortgage note payable		22,300		20,800
Total liabilities	$	42,900	$	33,600
Stockholders’ Equity
Common stock	$	21,500	$	21,200
Retained earnings		26,400		12,500
Total stockholders’ equity	$	47,900	$	33,700
Total liabilities and stockholders’ equity	$	90,800	$	67,300

Calculate the asset turnover ratio. (Round your answers to the nearest hundredth.)

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