Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amountsat December 31 of the prior year were inventory, $46,900; total assets, $179,400; common stock, $88,000; and retained earnings,$31,286.)AssetsCashShort-term investmentsAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsCABOT CORPORATIONIncome StatementCost of goods soldGross profitFor Current Year Ended December 31SalesOperating expensesInterest expenseIncome before taxesIncome tax expenseNet income$ 18,0009,00033,800Req 1 and 2 Reg 3 Req 4Compute the debt-to-equity ratio.Numerator:$ 455,600298,150157,45098,5004,00054,95022,136$ 32,81430,1503,050154,300 Retained earnings$ 248,300 Total liabilities and equity1CABOT CORPORATIONBalance SheetDecember 31 of current yearLiabilities and EquityAccounts payableAccrued wages payableIncome taxes payableComplete this question by entering your answers in the tabs below.Long-term note payable, secured by mortgage on plant assetsCommon stockRequired: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.Req 5Req 6Debt-to-Equity RatioDenominator:Req 10$ 18,5003,8003,500Req 1170,40088,00064,100$ 248,300

The ratio analysis helps to analyse the financial statements on the basis of the different elements…

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, $46,900; total assets, $179,400; common stock, $88,000; and retained earnings, $31,286.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 18,000 9,000 33,800 30,150 3,050 154,300 $ 248,300 CABOT CORPORATION Income Statement For Current Tear Ended December 31 Sales $ 455.600 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity $ 18,500 3,800 3,500 70,400 88,000 64,100 $ 248,300

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, $46,900; total assets, $179,400; common stock, $88,000; and retained earnings, $31,286.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 18,000 9,000 33,800 30,150 3,050 154,300 $ 248,300 CABOT CORPORATION Income Statement For Current Tear Ended December 31 Sales $ 455.600 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity $ 18,500 3,800 3,500 70,400 88,000 64,100 $ 248,300

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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