Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were Inventory, $49,900; total assets, $259,400; common stock, $87,000; and retained earnings, $28,750.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Sales CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity $ 12,000 Accounts payable $ 17,500 8,400 Accrued wages payable 4,800 31,200 Income taxes payable 3,300 36,150 3,050 148,300 Long-term note payable, secured by mortgage on plant assets 68,400 Common stock 87,000 Retained earnings 58,100 $ 239,100 Total liabilities and equity $ 239,100 CABOT CORPORATION Income Statement For Current Year Ended December 31 $ 451,600 Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income 298,250 153,350 99,400 4,800 49,150 19,800 $ 29,350 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) Inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity. Note: Do not round Intermediate calculations. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio.
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were Inventory, $49,900; total assets, $259,400; common stock, $87,000; and retained earnings, $28,750.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Sales CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity $ 12,000 Accounts payable $ 17,500 8,400 Accrued wages payable 4,800 31,200 Income taxes payable 3,300 36,150 3,050 148,300 Long-term note payable, secured by mortgage on plant assets 68,400 Common stock 87,000 Retained earnings 58,100 $ 239,100 Total liabilities and equity $ 239,100 CABOT CORPORATION Income Statement For Current Year Ended December 31 $ 451,600 Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income 298,250 153,350 99,400 4,800 49,150 19,800 $ 29,350 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) Inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity. Note: Do not round Intermediate calculations. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were
Inventory, $49,900; total assets, $259,400; common stock, $87,000; and retained earnings, $28,750.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Sales
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
$ 12,000
Accounts payable
$ 17,500
8,400
Accrued wages payable
4,800
31,200
Income taxes payable
3,300
36,150
3,050
148,300
Long-term note payable, secured by mortgage on plant assets
68,400
Common stock
87,000
Retained earnings
58,100
$ 239,100
Total liabilities and equity
$ 239,100
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
$ 451,600
Cost of goods sold
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net income
298,250
153,350
99,400
4,800
49,150
19,800
$ 29,350
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) Inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest
earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity.
Note: Do not round Intermediate calculations.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Req 4
Req 5
Req 6
Req 7
Req 8
Req 9
Req 10
Req 11
Compute the current ratio and acid-test ratio.
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