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, $47,900; total assets, $189,400; common stock, $88,000; and retained earnings, $40,532.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION $ 12,000 9,400 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable 30, 400 Income taxes payable 42,150 2,550 148,300 Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings $ 244,800 Total liabilities and equity Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income $ 450,600 297,950 152,650 98,700 4,100 49,850 20,082 $ 29,768 $ 16,500 3,200 4,400 62,400 88,000 70,300 $ 244,800 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory,

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, $47,900; total assets, $189,400; common stock, $88,000; and retained earnings, $40,532.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION $ 12,000 9,400 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable 30, 400 Income taxes payable 42,150 2,550 148,300 Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings $ 244,800 Total liabilities and equity Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income $ 450,600 297,950 152,650 98,700 4,100 49,850 20,082 $ 29,768 $ 16,500 3,200 4,400 62,400 88,000 70,300 $ 244,800 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory,

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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