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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $33,748.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold 297,250 Gross profit 151,350 Operating expenses 98,600 Interest expense 4,100 Income before taxes 48,650 Income tax expense 19,598 Net income $ 29,052 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 17,500 Short-term investments 8,400 Accrued wages payable 3,200 Accounts receivable, net 33,700 Income taxes payable 3,300 Merchandise inventory 32,150 Long-term note payable, secured by mortgage on plant assets 63,400 Prepaid expenses 2,650 Common stock 90,000 Plant assets, net 153,300 Retained earnings 62,800 Total assets $ 240,200 Total liabilities and equity $ 240,200 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected
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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $33,748.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold 297,250 Gross profit 151,350 Operating expenses 98,600 Interest expense 4,100 Income before taxes 48,650 Income tax expense 19,598 Net income $ 29,052 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 17,500 Short-term investments 8,400 Accrued wages payable 3,200 Accounts receivable, net 33,700 Income taxes payable 3,300 Merchandise inventory 32,150 Long-term note payable, secured by mortgage on plant assets 63,400 Prepaid expenses 2,650 Common stock 90,000 Plant assets, net 153,300 Retained earnings 62,800 Total assets $ 240,200 Total liabilities and equity $ 240,200 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
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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, $48,900; total assets, $189,400; common stock, $90,000; and
CABOT CORPORATION Income Statement For Current Year Ended December 31 |
|||
Sales | $ | 448,600 | |
Cost of goods sold | 297,250 | ||
Gross profit | 151,350 | ||
Operating expenses | 98,600 | ||
Interest expense | 4,100 | ||
Income before taxes | 48,650 | ||
Income tax expense | 19,598 | ||
Net income | $ | 29,052 | |
CABOT CORPORATION Balance Sheet December 31 |
|||||||
Assets | Liabilities and Equity | ||||||
Cash | $ | 10,000 | Accounts payable | $ | 17,500 | ||
Short-term investments | 8,400 | Accrued wages payable | 3,200 | ||||
33,700 | Income taxes payable | 3,300 | |||||
Merchandise inventory | 32,150 | Long-term note payable, secured by mortgage on plant assets |
63,400 | ||||
Prepaid expenses | 2,650 | Common stock | 90,000 | ||||
Plant assets, net | 153,300 | Retained earnings | 62,800 | ||||
Total assets | $ | 240,200 | Total liabilities and equity | $ | 240,200 | ||
Required:
Compute the following: (1)
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