LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 22,400 $ 17,550 Sales returns and allowances 800 100 Net sales $ 21,600 $ 17,450 Cost of merchandise (goods) sold 11,150 7,900 Gross profit $ 10,450 $ 9,550 Operating expenses: Depreciation $ 1,040 $ 770 Selling and administrative 4,750 3,700 Research 890 670 Miscellaneous 700 470 Total operating expenses $ 7,380 $ 5,610 Income before interest and taxes $ 3,070 $ 3,940 Interest expense 900 670 Income before taxes $ 2,170 $ 3,270 Provision for taxes 868 1,308 Net income $ 1,302 $ 1,962 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 11,800 $ 8,800 Accounts receivable 16,300 12,300 Merchandise inventory 8,300 13,800 Prepaid expenses 23,800 9,800 Total current assets $ 60,200 $ 44,700 Plant and equipment: Building (net) $ 14,300 $ 10,900 Land 13,300 8,800 Total plant and equipment $ 27,600 $ 19,700 Total assets $ 87,800 $ 64,400 Liabilities Current liabilities: Accounts payable $ 12,800 $ 6,800 Salaries payable 6,800 4,800 Total current liabilities $ 19,600 $ 11,600 Long-term liabilities: Mortgage note payable 21,800 20,300 Total liabilities $ 41,400 $ 31,900 Stockholders’ Equity Common stock $ 20,800 $ 20,800 Retained earnings 25,600 11,700 Total stockholders’ equity $ 46,400 $ 32,500 Total liabilities and stockholders’ equity $ 87,800 $ 64,400 Calculate the current 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 $ 22,400 $ 17,550 Sales returns and allowances 800 100 Net sales $ 21,600 $ 17,450 Cost of merchandise (goods) sold 11,150 7,900 Gross profit $ 10,450 $ 9,550 Operating expenses: Depreciation $ 1,040 $ 770 Selling and administrative 4,750 3,700 Research 890 670 Miscellaneous 700 470 Total operating expenses $ 7,380 $ 5,610 Income before interest and taxes $ 3,070 $ 3,940 Interest expense 900 670 Income before taxes $ 2,170 $ 3,270 Provision for taxes 868 1,308 Net income $ 1,302 $ 1,962 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 11,800 $ 8,800 Accounts receivable 16,300 12,300 Merchandise inventory 8,300 13,800 Prepaid expenses 23,800 9,800 Total current assets $ 60,200 $ 44,700 Plant and equipment: Building (net) $ 14,300 $ 10,900 Land 13,300 8,800 Total plant and equipment $ 27,600 $ 19,700 Total assets $ 87,800 $ 64,400 Liabilities Current liabilities: Accounts payable $ 12,800 $ 6,800 Salaries payable 6,800 4,800 Total current liabilities $ 19,600 $ 11,600 Long-term liabilities: Mortgage note payable 21,800 20,300 Total liabilities $ 41,400 $ 31,900 Stockholders’ Equity Common stock $ 20,800 $ 20,800 Retained earnings 25,600 11,700 Total stockholders’ equity $ 46,400 $ 32,500 Total liabilities and stockholders’ equity $ 87,800 $ 64,400 Calculate the current 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	$	22,400	$	17,550
Sales returns and allowances		800		100
Net sales	$	21,600	$	17,450
Cost of merchandise (goods) sold		11,150		7,900
Gross profit	$	10,450	$	9,550
Operating expenses:
Depreciation	$	1,040	$	770
Selling and administrative		4,750		3,700
Research		890		670
Miscellaneous		700		470
Total operating expenses	$	7,380	$	5,610
Income before interest and taxes	$	3,070	$	3,940
Interest expense		900		670
Income before taxes	$	2,170	$	3,270
Provision for taxes		868		1,308
Net income	$	1,302	$	1,962

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	11,800	$	8,800
Accounts receivable		16,300		12,300
Merchandise inventory		8,300		13,800
Prepaid expenses		23,800		9,800
Total current assets	$	60,200	$	44,700
Plant and equipment:
Building (net)	$	14,300	$	10,900
Land		13,300		8,800
Total plant and equipment	$	27,600	$	19,700
Total assets	$	87,800	$	64,400
Liabilities
Current liabilities:
Accounts payable	$	12,800	$	6,800
Salaries payable		6,800		4,800
Total current liabilities	$	19,600	$	11,600
Long-term liabilities:
Mortgage note payable		21,800		20,300
Total liabilities	$	41,400	$	31,900
Stockholders’ Equity
Common stock	$	20,800	$	20,800
Retained earnings		25,600		11,700
Total stockholders’ equity	$	46,400	$	32,500
Total liabilities and stockholders’ equity	$	87,800	$	64,400

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

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