Revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses Net income Assets Current assets Cash Marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities Year 2 Year 1 $219,100 $182,800 Total liabilities and stockholders' equity 124,400 19,700 10,000 1,700 20, 100 175,900 $43,200 $ 4,800 $ 7,200 2,800 2,800 31,100 36,600 101,600 3,900 149,700 106,400 21,500 $277,600 101, 100 17,700 9,000 1,700 16,900 146,400 $ 36,400 54,300 64,300 118,600 Stockholders' equity Common stock (43,000 shares) 114,900 Retained earnings 44,100 Total stockholders' equity 159,000 $ 38,500 $ 34,200 15,800 16, 200 94, 100 2,900 138, 100 106,400 0 $244,500 50,400 65,300 115,700 114,900 13,900 128,800 $277,600 $244,500

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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Question
Revenues
Expenses
Cost of goods sold
Selling expenses
General and administrative
expenses
Interest expense
Income tax expense
Total expenses
Net income
Assets
Current assets
Cash
Marketable securities
Accounts receivable
Inventories
Prepaid expenses
Total current assets
Plant and equipment (net)
Intangibles
Total assets
Liabilities and Stockholders'
Equity
Liabilities
Current liabilities
Accounts payable
Other
Total current liabilities
Bonds payable
Total liabilities
Year 2
$219,100
Total liabilities and
stockholders' equity
124, 400
19,700
10,000
1,700
20, 100
175,900
$ 43,200
$ 38,500
15,800
54,300
64,300
118,600
Stockholders' equity
Common stock (43,000 shares)
Retained earnings
Total stockholders' equity 159,000
$277,600
$ 4,800 $ 7,200
2,800
2,800
36,600
31, 100
101,600
94, 100
3,900
2,900
149,700
138, 100
106,400 106,400
21,500
0
$277,600
$244,500
Year 1
$182,800
114,900
44, 100
101, 100
17,700
9,000
1,700
16,900
146,400
$36,400
$ 34,200
16, 200
50,400
65,300
115,700
114,900
13,900
128,800
$244,500
Required
Calculate the following ratios for Year 1 and Year 2. Since opening balance numbers are not presented do not use
averages when calculating the ratios for Year 1. Instead, use the number presented on the Year 1 balance sheet.
Transcribed Image Text:Revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses Net income Assets Current assets Cash Marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities Year 2 $219,100 Total liabilities and stockholders' equity 124, 400 19,700 10,000 1,700 20, 100 175,900 $ 43,200 $ 38,500 15,800 54,300 64,300 118,600 Stockholders' equity Common stock (43,000 shares) Retained earnings Total stockholders' equity 159,000 $277,600 $ 4,800 $ 7,200 2,800 2,800 36,600 31, 100 101,600 94, 100 3,900 2,900 149,700 138, 100 106,400 106,400 21,500 0 $277,600 $244,500 Year 1 $182,800 114,900 44, 100 101, 100 17,700 9,000 1,700 16,900 146,400 $36,400 $ 34,200 16, 200 50,400 65,300 115,700 114,900 13,900 128,800 $244,500 Required Calculate the following ratios for Year 1 and Year 2. Since opening balance numbers are not presented do not use averages when calculating the ratios for Year 1. Instead, use the number presented on the Year 1 balance sheet.
g. Times interest earned. Exclude extraordinary income in the calculation as they cannot be expected to recur and,
therefore, will not be available to satisfy future interest payments. (Round your answers to 2 decimal places.)
h. Working capital.
i. Current ratio. (Round your answers to 2 decimal places.)
j. Quick (acid-test) ratio. (Round your answers to 2 decimal places.)
k. Accounts receivable turnover. (Round your answers to 2 decimal places.)
I. Inventory turnover. (Round your answers to 2 decimal places.)
m. Debt-to-equity ratio. (Round your answers to 2 decimal places.)
n. Debt-to-assets ratio. (Round your answers to the nearest whole percent.)
a. Net margin
b. Return on investment
c. Return on equity
d. Earnings per share
e.
f.
g.
غان
عن
h.
Price-earnings ratio
Book value per share of common
stock
Times interest earned
Working capital
Current ratio
Quick (acid-test) ratio
|i.
lj.
k. Accounts receivable turnover
I.
Inventory turnover
m. Debt-to-equity ratio
n. Debt-to-assets ratio
$
Year 2
19.91 %
14.89 %
28.26 %
0.85
7.11 times
$ 3.00
times
times
times
%
$
$
Year 1
19.72 %
15.56 %
30.02 %
1.00
4.96 times
3.70
times
times
times
%
Transcribed Image Text:g. Times interest earned. Exclude extraordinary income in the calculation as they cannot be expected to recur and, therefore, will not be available to satisfy future interest payments. (Round your answers to 2 decimal places.) h. Working capital. i. Current ratio. (Round your answers to 2 decimal places.) j. Quick (acid-test) ratio. (Round your answers to 2 decimal places.) k. Accounts receivable turnover. (Round your answers to 2 decimal places.) I. Inventory turnover. (Round your answers to 2 decimal places.) m. Debt-to-equity ratio. (Round your answers to 2 decimal places.) n. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) a. Net margin b. Return on investment c. Return on equity d. Earnings per share e. f. g. غان عن h. Price-earnings ratio Book value per share of common stock Times interest earned Working capital Current ratio Quick (acid-test) ratio |i. lj. k. Accounts receivable turnover I. Inventory turnover m. Debt-to-equity ratio n. Debt-to-assets ratio $ Year 2 19.91 % 14.89 % 28.26 % 0.85 7.11 times $ 3.00 times times times % $ $ Year 1 19.72 % 15.56 % 30.02 % 1.00 4.96 times 3.70 times times times %
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