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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, $52,900; total assets, $179,400; common stock, $87,000; and retained earnings, $44,424.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Income Statement Sales Cost of goods sold Gross profit For Current Year Ended December 31 Operating expenses Interest expense Income before taxes Income tax expense Net income. Accounts payable $ 20,000 9,000 Accrued wages payable 33,800 Income taxes payable 32,150 Long-term note payable, secured by mortgage on plant assets Common stock 2,450 154,300 Retained earnings $ 251,700 Total liabilities and equity P $ 455,600 298,250 157,350 98,900 4,400 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 54,050 21,774 $ 32,276 $ 17,500 4,200 2,900 63,400 87,000 76,700 $ 251,700 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, $52,900; total assets, $179,400; common stock, $87,000; and retained earnings, $44,424.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Income Statement Sales Cost of goods sold Gross profit For Current Year Ended December 31 Operating expenses Interest expense Income before taxes Income tax expense Net income. Accounts payable $ 20,000 9,000 Accrued wages payable 33,800 Income taxes payable 32,150 Long-term note payable, secured by mortgage on plant assets Common stock 2,450 154,300 Retained earnings $ 251,700 Total liabilities and equity P $ 455,600 298,250 157,350 98,900 4,400 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 54,050 21,774 $ 32,276 $ 17,500 4,200 2,900 63,400 87,000 76,700 $ 251,700 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
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, $52,900; total assets, $179,400; common stock, $87,000; and retained earnings, $44,424.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION 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 $20,000 9,000 33,800 32,150 2,450 154,300 $ 251,700 Req 1 and 2 Req 3 $ 455,600 298,250 Req 4 157,350 98,900 4,400 54,050 21,774 $ 32,276 Complete this question by entering your answers in the tabs below. CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 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. Req 5 Accounts payable Accrued wages payable Income taxes payable Compute the current ratio and acid-test ratio. Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity Req 6 Req 7 Req 8 Req 9 Req 10 $ 17,500 4,200 2,900 Req 11 63,400 87,000 76,700 $ 251,700
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, $52,900; total assets, $179,400; common stock, $87,000; and retained earnings, $44,424.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION 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 $20,000 9,000 33,800 32,150 2,450 154,300 $ 251,700 Req 1 and 2 Req 3 $ 455,600 298,250 Req 4 157,350 98,900 4,400 54,050 21,774 $ 32,276 Complete this question by entering your answers in the tabs below. CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 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. Req 5 Accounts payable Accrued wages payable Income taxes payable Compute the current ratio and acid-test ratio. Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity Req 6 Req 7 Req 8 Req 9 Req 10 $ 17,500 4,200 2,900 Req 11 63,400 87,000 76,700 $ 251,700
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