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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings,$33,748.)AssetsCashShort-term investmentsAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsSalesCost of goods soldGross profit$ 10,0008,400CABOT CORPORATIONIncome StatementFor Current Year Ended December 31Operating expensesInterest expenseIncome before taxesIncome tax expenseNet income33,70032,1502,650153,300$ 240, 200$448,600297,250151,35098,6004,10048,65019,598$ 29,052CABOT CORPORATIONBalance SheetDecember 31 of current yearLiabilities and EquityAccounts payableAccrued wages payableIncome taxes payable.Long-term note payable, secured by mortgage on plant assetsCommon stockRetained earningsTotal liabilities and equity$ 17,5003,2003,30063,40090,00062,800$ 240,200Required: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) returnon equity.Note: Do not round intermediate calculations.

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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 retained earnings, $33,748.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Sales Cost of goods sold Gross profit $ 10,000 8,400 CABOT CORPORATION Income Statement For Current Year Ended December 31 Operating expenses Interest expense Income before taxes Income tax expense Net income 33,700 32,150 2,650 153,300 Retained earnings $ 240,200 Total liabilities and equity $ 448,600 297,250 151,350 98,600 4,100 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 48,650 19,598 $ 29.052 Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock $ 17,500 3,200 3,300 63,400 90,000 62,800 $ 240,200

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.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Sales Cost of goods sold Gross profit $ 10,000 8,400 CABOT CORPORATION Income Statement For Current Year Ended December 31 Operating expenses Interest expense Income before taxes Income tax expense Net income 33,700 32,150 2,650 153,300 Retained earnings $ 240,200 Total liabilities and equity $ 448,600 297,250 151,350 98,600 4,100 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 48,650 19,598 $ 29.052 Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock $ 17,500 3,200 3,300 63,400 90,000 62,800 $ 240,200

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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