The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was $71.25 on December 31, 2014.InstructionsDetermine the following measures for 2014, rounding to one decimal place:1. a.Working capitalb. Current ratioc. Quick ratiod. Accounts receivable turnovere. Number of days' sales in receivablesf. Inventory turnoverg. Number of days' sales in inventoryh. Ratio of fixed assets to long-term liabilitiesi. Ratio of liabilities to stockholdersâ€™ equityj. Number of times interest charges are earnedk. Number of times preferred dividends are earned2. a. Ratio of net sales to assetsb. Rate earned on total assetsc. Rate earned on stockholders' equityd. Rate earned on common stockholders' equitye. Earnings per share on common stockf. Price-earnings ratiog. Dividends per share of common stockh. Dividend yield Current liabilities...Long-term liabilities:Mortgage note payable, 8%, due 2019..Bonds payable, 10%, due 2015.Total long-term liabilities.Total liabilities ....$ 440,000$ 400,000$ 100,0001,000,000$1,100,000$1,540,0001,000,000$1,000,000$1,400,000Stockholders' EquityPreferred $0.75 stock, $10 par.Common stock, $10 par.....Retained earnings....Total stockholders' equity.Total liabilities and stockholders' equity..$ 200,000100,0002,930,000$3,230,000$4,770,000$ 200,000100,0002,655,000$2,955,000$4,355,000 Bettancort Inc.Comparative Retained Earnings StatementFor the Years Ended December 31, 2014 and 201320142013Retained earnings, January 1.Add net income for year.Total ..$2,655,000$2,400,000280,000300,000$2,955,000$2,680,000Deduct dividends:On preferred stock.On common stock..Total.....Retained earnings, December 31$ 15,000$ 15,00010,000$ 25,000$2,930,00010,000$ 25,000$2,655,000Bettancort Inc.Comparative Income StatementFor the Years Ended December 31, 2014 and 201320142013$1,212,00012,000Sales (all on account).$1,010,00010,000$1,000,000Sales returns and allowances.Net sales.....Cost of goods sold..Gross profit.....Selling expensesAdministrative expenses.Total operating expensesIncome from operationsOther income..$1,200,000500,000$ 700,000$ 240,000180,000$ 420,000$ 280,000166,000$ 446,000475,000$ 525,000$ 200,000150,000$ 350,000$ 175,000225,000$ 400,00060,000$ 340,00060,000$ 280,000Other expense (interest) .66,000$ 380,00080,000$ 300,000Income before income taxIncome tax expenseNet incomeBettancort Inc.Comparative Balance SheetDecember 31, 2014 and 2013Dec. 31, 2014Dec. 31, 2013AssetsCurrent assets:Cash .....$ 450,000$ 400,000Marketable securities..300,000130,000260,000110,000Accounts receivable (net)Inventories ...67,00058,000Prepaid expensesTotal current assets153,000$1,100,000139,000$ 967,000Long-term investments.Property, plant, and equipment (net)Total assets ...2,350,0001,320,0002,200,0001,188,000$4,355,000$4,770,000

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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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The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was $71.25 on December 31, 2014.

Instructions
Determine the following measures for 2014, rounding to one decimal place:
1. a.Working capital

b. Current ratio

c. Quick ratio
d. Accounts receivable turnover
e. Number of days' sales in receivables
f. Inventory turnover
g. Number of days' sales in inventory
h. Ratio of fixed assets to long-term liabilities
i. Ratio of liabilities to stockholdersâ€™ equity
j. Number of times interest charges are earned
k. Number of times preferred dividends are earned
2. a. Ratio of net sales to assets
b. Rate earned on total assets
c. Rate earned on stockholders' equity
d. Rate earned on common stockholders' equity
e. Earnings per share on common stock
f. Price-earnings ratio
g. Dividends per share of common stock
h. Dividend yield

Current liabilities...
Long-term liabilities:
Mortgage note payable, 8%, due 2019..
Bonds payable, 10%, due 2015.
Total long-term liabilities.
Total liabilities ....
$ 440,000
$ 400,000
$ 100,000
1,000,000
$1,100,000
$1,540,000
1,000,000
$1,000,000
$1,400,000
Stockholders' Equity
Preferred $0.75 stock, $10 par.
Common stock, $10 par.....
Retained earnings....
Total stockholders' equity.
Total liabilities and stockholders' equity..
$ 200,000
100,000
2,930,000
$3,230,000
$4,770,000
$ 200,000
100,000
2,655,000
$2,955,000
$4,355,000

Bettancort Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
Retained earnings, January 1.
Add net income for year.
Total ..
$2,655,000
$2,400,000
280,000
300,000
$2,955,000
$2,680,000
Deduct dividends:
On preferred stock.
On common stock..
Total.....
Retained earnings, December 31
$ 15,000
$ 15,000
10,000
$ 25,000
$2,930,000
10,000
$ 25,000
$2,655,000
Bettancort Inc.
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
$1,212,000
12,000
Sales (all on account).
$1,010,000
10,000
$1,000,000
Sales returns and allowances.
Net sales.....
Cost of goods sold..
Gross profit.....
Selling expenses
Administrative expenses.
Total operating expenses
Income from operations
Other income..
$1,200,000
500,000
$ 700,000
$ 240,000
180,000
$ 420,000
$ 280,000
166,000
$ 446,000
475,000
$ 525,000
$ 200,000
150,000
$ 350,000
$ 175,000
225,000
$ 400,000
60,000
$ 340,000
60,000
$ 280,000
Other expense (interest) .
66,000
$ 380,000
80,000
$ 300,000
Income before income tax
Income tax expense
Net income
Bettancort Inc.
Comparative Balance Sheet
December 31, 2014 and 2013
Dec. 31, 2014
Dec. 31, 2013
Assets
Current assets:
Cash .....
$ 450,000
$ 400,000
Marketable securities..
300,000
130,000
260,000
110,000
Accounts receivable (net)
Inventories ...
67,000
58,000
Prepaid expenses
Total current assets
153,000
$1,100,000
139,000
$ 967,000
Long-term investments.
Property, plant, and equipment (net)
Total assets ...
2,350,000
1,320,000
2,200,000
1,188,000
$4,355,000
$4,770,000

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