LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 20,400 $ 16,050 Sales returns and allowances 900 100 Net sales $ 19,500 $ 15,950 Cost of merchandise (goods) sold 11,650 8,650 Gross profit $ 7,850 $ 7,300 Operating expenses: Depreciation $ 840 $ 670 Selling and administrative 3,250 2,700 Research 690 570 Miscellaneous 500 370 Total operating expenses $ 5,280 $ 4,310 Income before interest and taxes $ 2,570 $ 2,990 Interest expense 700 570 Income before taxes $ 1,870 $ 2,420 Provision for taxes 748 968 Net income $ 1,122 $ 1,452 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 12,700 $ 9,700 Accounts receivable 17,200 13,200 Merchandise inventory 9,200 14,700 Prepaid expenses 24,700 10,700 Total current assets $ 63,800 $ 48,300 Plant and equipment: Building (net) $ 15,200 $ 11,900 Land 14,200 9,700 Total plant and equipment $ 29,400 $ 21,600 Total assets $ 93,200 $ 69,900 Liabilities Current liabilities: Accounts payable $ 13,700 $ 7,700 Salaries payable 7,700 5,700 Total current liabilities $ 21,400 $ 13,400 Long-term liabilities: Mortgage note payable 22,700 21,200 Total liabilities $ 44,100 $ 34,600 Stockholders’ Equity Common stock $ 21,700 $ 21,700 Retained earnings 27,400 13,600 Total stockholders’ equity $ 49,100 $ 35,300 Total liabilities and stockholders’ equity $ 93,200 $ 69,900 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 $ 20,400 $ 16,050 Sales returns and allowances 900 100 Net sales $ 19,500 $ 15,950 Cost of merchandise (goods) sold 11,650 8,650 Gross profit $ 7,850 $ 7,300 Operating expenses: Depreciation $ 840 $ 670 Selling and administrative 3,250 2,700 Research 690 570 Miscellaneous 500 370 Total operating expenses $ 5,280 $ 4,310 Income before interest and taxes $ 2,570 $ 2,990 Interest expense 700 570 Income before taxes $ 1,870 $ 2,420 Provision for taxes 748 968 Net income $ 1,122 $ 1,452 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 12,700 $ 9,700 Accounts receivable 17,200 13,200 Merchandise inventory 9,200 14,700 Prepaid expenses 24,700 10,700 Total current assets $ 63,800 $ 48,300 Plant and equipment: Building (net) $ 15,200 $ 11,900 Land 14,200 9,700 Total plant and equipment $ 29,400 $ 21,600 Total assets $ 93,200 $ 69,900 Liabilities Current liabilities: Accounts payable $ 13,700 $ 7,700 Salaries payable 7,700 5,700 Total current liabilities $ 21,400 $ 13,400 Long-term liabilities: Mortgage note payable 22,700 21,200 Total liabilities $ 44,100 $ 34,600 Stockholders’ Equity Common stock $ 21,700 $ 21,700 Retained earnings 27,400 13,600 Total stockholders’ equity $ 49,100 $ 35,300 Total liabilities and stockholders’ equity $ 93,200 $ 69,900 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	$	20,400	$	16,050
	Sales returns and allowances		900		100
	Net sales	$	19,500	$	15,950
	Cost of merchandise (goods) sold		11,650		8,650
	Gross profit	$	7,850	$	7,300
	Operating expenses:
	Depreciation	$	840	$	670
	Selling and administrative		3,250		2,700
	Research		690		570
	Miscellaneous		500		370
	Total operating expenses	$	5,280	$	4,310
	Income before interest and taxes	$	2,570	$	2,990
	Interest expense		700		570
	Income before taxes	$	1,870	$	2,420
	Provision for taxes		748		968
	Net income	$	1,122	$	1,452

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	12,700	$	9,700
Accounts receivable		17,200		13,200
Merchandise inventory		9,200		14,700
Prepaid expenses		24,700		10,700
Total current assets	$	63,800	$	48,300
Plant and equipment:
Building (net)	$	15,200	$	11,900
Land		14,200		9,700
Total plant and equipment	$	29,400	$	21,600
Total assets	$	93,200	$	69,900
Liabilities
Current liabilities:
Accounts payable	$	13,700	$	7,700
Salaries payable		7,700		5,700
Total current liabilities	$	21,400	$	13,400
Long-term liabilities:
Mortgage note payable		22,700		21,200
Total liabilities	$	44,100	$	34,600
Stockholders’ Equity
Common stock	$	21,700	$	21,700
Retained earnings		27,400		13,600
Total stockholders’ equity	$	49,100	$	35,300
Total liabilities and stockholders’ equity	$	93,200	$	69,900

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

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