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, $219,400; common stock, $83,000; and retained earnings, $39,956.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold 297,050 Gross profit 151,550 Operating expenses 99,400 Interest expense 4,100 Income before taxes 48,050 Income tax expense 19,356 Net income $ 28,694 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 19,500 Short-term investments 8,000 Accrued wages payable 3,400 Accounts receivable, net 33,600 Income taxes payable 2,900 Merchandise inventory 42,150 Long-term note payable, secured by mortgage on plant assets 66,400 Prepaid expenses 2,800 Common stock 83,000 Plant assets, net 147,300 Retained earnings 68,650 Total assets $ 243,850 Total liabilities and equity $ 243,850 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 19,500 Short-term investments 8,000 Accrued wages payable 3,400 Accounts receivable, net 33,600 Income taxes payable 2,900 Merchandise inventory 42,150 Long-term note payable, secured by mortgage on plant assets 66,400 Prepaid expenses 2,800 Common stock 83,000 Plant assets, net 147,300 Retained earnings 68,650 Total assets $ 243,850 Total liabilities and equity $ 243,850 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 common stockholders' equity. (Do not round intermediate calculations.)

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, $219,400; common stock, $83,000; and retained earnings, $39,956.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold 297,050 Gross profit 151,550 Operating expenses 99,400 Interest expense 4,100 Income before taxes 48,050 Income tax expense 19,356 Net income $ 28,694 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 19,500 Short-term investments 8,000 Accrued wages payable 3,400 Accounts receivable, net 33,600 Income taxes payable 2,900 Merchandise inventory 42,150 Long-term note payable, secured by mortgage on plant assets 66,400 Prepaid expenses 2,800 Common stock 83,000 Plant assets, net 147,300 Retained earnings 68,650 Total assets $ 243,850 Total liabilities and equity $ 243,850 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 19,500 Short-term investments 8,000 Accrued wages payable 3,400 Accounts receivable, net 33,600 Income taxes payable 2,900 Merchandise inventory 42,150 Long-term note payable, secured by mortgage on plant assets 66,400 Prepaid expenses 2,800 Common stock 83,000 Plant assets, net 147,300 Retained earnings 68,650 Total assets $ 243,850 Total liabilities and equity $ 243,850 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 common stockholders' equity. (Do not round intermediate calculations.)

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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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, $219,400; common stock, $83,000; and retained earnings, $39,956.)

CABOT CORPORATION Income Statement For Current Year Ended December 31
Sales	$	448,600
Cost of goods sold		297,050
Gross profit		151,550
Operating expenses		99,400
Interest expense		4,100
Income before taxes		48,050
Income tax expense		19,356
Net income	$	28,694

CABOT CORPORATION Balance Sheet December 31
Assets			Liabilities and Equity
Cash	$	10,000	Accounts payable	$	19,500
Short-term investments		8,000	Accrued wages payable		3,400
Accounts receivable, net		33,600	Income taxes payable		2,900
Merchandise inventory		42,150	Long-term note payable, secured by mortgage on plant assets		66,400
Prepaid expenses		2,800	Common stock		83,000
Plant assets, net		147,300	Retained earnings		68,650
Total assets	$	243,850	Total liabilities and equity	$	243,850

CABOT CORPORATION Balance Sheet December 31
Assets			Liabilities and Equity
Cash	$	10,000	Accounts payable	$	19,500
Short-term investments		8,000	Accrued wages payable		3,400
Accounts receivable, net		33,600	Income taxes payable		2,900
Merchandise inventory		42,150	Long-term note payable, secured by mortgage on plant assets		66,400
Prepaid expenses		2,800	Common stock		83,000
Plant assets, net		147,300	Retained earnings		68,650
Total assets	$	243,850	Total liabilities and equity	$	243,850

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 common stockholders' equity. (Do not round intermediate calculations.)

Complete this question by entering your answers in the tabs below.
Req 1 and 2
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Req 4
Req 5
Req 6
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Req 11
Compute the return on total assets.
(10)
Return on Total Assets
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Return on Total Assets
Return on total assets
%3D
0 %
< Req 9
Req 11 >
II

Complete this question by entering your answers in the tabs below.
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Req 8
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Req 10
Req 11
Compute the total asset turnover.
(9)
Total Asset Turnover
Choose Numerator:
Choose Denominator:
Total Asset Turnover
Total asset turnover
%3D
0 times
%3D
< Req 8
Req 10 >
II

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