PROBLEM 17-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, L04]. Incomplete financial statements for Tanner Company are given below: xis Tanner Company Income Statement For the Year Ended December 31 Revenue... $2,700,000 ? Cost of goods sold.. Gross margin. Selling and administrative expenses ? Net operating income . Interest expense 45,000 Net income before taxes. Income taxes, 40%. Net incom $ Scanned by CamScanı Financial Staternent Analysis 923 Tanner Company Balance Sheet. December 31 Non-current Assets: Plant and equipment, net Current assets: Accounts receivable, net. . Inventory.. Cash and cash equivalents. Total current assets $ ? Total assets $ ? Equity: Common stock, $2.50 par value Retained earnings Total equity... Bonds payable, 10% Current liabilities Total liabilities.. $250,000 Total equity and liabilities $ ? The following additional information is available about the company: Selected financial ratios computed from the statements above are given below: a. 2.40 1.12 Current ratio Acid-test ratio Accounts receivable turnover 15.0 Inventory turnover Debt-to-equity ratio Times interest earned. 6.0 0.875 7.0 $4.05 Earnings per share Return on total assets. 14% b. All sales during the year were on account. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year. d. There were no changes in the number of shares of common stock outstanding during the year. Selected balances at the beginning of the current year (January 1) were as follows: c. c. Accounts receivable . Inventory Total assets $160,000 $280,000 $1,200,000 37 / 37 Required: Compute the missing amounts on the company's financial statements. (Hint: You may find it help- ful to think about the difference between the current ratio and the acid-test ratio.)
PROBLEM 17-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, L04]. Incomplete financial statements for Tanner Company are given below: xis Tanner Company Income Statement For the Year Ended December 31 Revenue... $2,700,000 ? Cost of goods sold.. Gross margin. Selling and administrative expenses ? Net operating income . Interest expense 45,000 Net income before taxes. Income taxes, 40%. Net incom $ Scanned by CamScanı Financial Staternent Analysis 923 Tanner Company Balance Sheet. December 31 Non-current Assets: Plant and equipment, net Current assets: Accounts receivable, net. . Inventory.. Cash and cash equivalents. Total current assets $ ? Total assets $ ? Equity: Common stock, $2.50 par value Retained earnings Total equity... Bonds payable, 10% Current liabilities Total liabilities.. $250,000 Total equity and liabilities $ ? The following additional information is available about the company: Selected financial ratios computed from the statements above are given below: a. 2.40 1.12 Current ratio Acid-test ratio Accounts receivable turnover 15.0 Inventory turnover Debt-to-equity ratio Times interest earned. 6.0 0.875 7.0 $4.05 Earnings per share Return on total assets. 14% b. All sales during the year were on account. The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year. d. There were no changes in the number of shares of common stock outstanding during the year. Selected balances at the beginning of the current year (January 1) were as follows: c. c. Accounts receivable . Inventory Total assets $160,000 $280,000 $1,200,000 37 / 37 Required: Compute the missing amounts on the company's financial statements. (Hint: You may find it help- ful to think about the difference between the current ratio and the acid-test ratio.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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![What advice would you give to Juirgen
PROBLEM 17-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, L04]
Incomplete financial statements for Tanner Company are given below:
Tanner Company
Income Statement
For the Year Ended December 31
Revenue.
$2,700,000
Cost of goods sold..
Gross margin.
Selling and administrative expenses . .
?
Net operating income
Interest expense
45,000
Net income before taxes
?
Income taxes, 40%.
?
Net income
2$
?
Scanned by CamScanı
Financial Staterment Analysis
923
Tanner Company
Balance Sheet.
December 31
Non-current Assets:
Plant and equipment, net
Current assets:
Accounts receivable, net . .
Inventory..
Cash and cash equivalents.
Total current assets
$ ?
Total assets
$ ?
Equity:
Common stock, $2.50 par value
Retained earnings
Total equity . . ..
Bonds payable, 10%
Current liabilities
?
$250,000
Total liabilities.
?
Total equity and liabilities
$ ?
The following additional information is available about the company:
Selected financial ratios computed from the statements above are given below:
a.
Current ratio
2.40
Acid-test ratio
1.12
Accounts receivable turnover
15.0
Inventory turnover .
Debt-to-equity ratio
6.0
0.875
7.0
Times interest earned.
$4.05
Earnings per share
Return on total assets.
14%
b.
The interest expense on the income statement relates to the bonds payable; the amount of
bonds outstanding did not change throughout the year.
d. There were no changes in the number of shares of common stock outstanding during the year.
Selected balances at the beginning of the current year (January 1) were as follows:
All sales during the year were on account.
c.
C.
Accounts receivable . . .
Inventory
Total assets
$160,000
$280,000
$1,200,000
37 / 37
Required:
Compute the missing amounts on the company's financial statements, (Hint: You may find it help-
ful to think about the difference between the current ratio and the acid-test ratio.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f64b4a0-dbd7-46cb-af8b-72074494e5f9%2Fae51b6dc-7ebf-461f-a19b-2a5192ac23c7%2Fi80n8mp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:What advice would you give to Juirgen
PROBLEM 17-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, L04]
Incomplete financial statements for Tanner Company are given below:
Tanner Company
Income Statement
For the Year Ended December 31
Revenue.
$2,700,000
Cost of goods sold..
Gross margin.
Selling and administrative expenses . .
?
Net operating income
Interest expense
45,000
Net income before taxes
?
Income taxes, 40%.
?
Net income
2$
?
Scanned by CamScanı
Financial Staterment Analysis
923
Tanner Company
Balance Sheet.
December 31
Non-current Assets:
Plant and equipment, net
Current assets:
Accounts receivable, net . .
Inventory..
Cash and cash equivalents.
Total current assets
$ ?
Total assets
$ ?
Equity:
Common stock, $2.50 par value
Retained earnings
Total equity . . ..
Bonds payable, 10%
Current liabilities
?
$250,000
Total liabilities.
?
Total equity and liabilities
$ ?
The following additional information is available about the company:
Selected financial ratios computed from the statements above are given below:
a.
Current ratio
2.40
Acid-test ratio
1.12
Accounts receivable turnover
15.0
Inventory turnover .
Debt-to-equity ratio
6.0
0.875
7.0
Times interest earned.
$4.05
Earnings per share
Return on total assets.
14%
b.
The interest expense on the income statement relates to the bonds payable; the amount of
bonds outstanding did not change throughout the year.
d. There were no changes in the number of shares of common stock outstanding during the year.
Selected balances at the beginning of the current year (January 1) were as follows:
All sales during the year were on account.
c.
C.
Accounts receivable . . .
Inventory
Total assets
$160,000
$280,000
$1,200,000
37 / 37
Required:
Compute the missing amounts on the company's financial statements, (Hint: You may find it help-
ful to think about the difference between the current ratio and the acid-test ratio.)
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