The December 31, Year 4, balance sheet for Vernon Corporation is presented here. These are the only accounts on Vernon's balance sheet. Amounts indicated by question marks (?) can be calculated using the following additional information: Assets Cash VERNON CORPORATION Balance Sheet As of December 31, Year 4 Accounts receivable (net) Inventory Property, plant, and equipment (net) Liabilities and Stockholders' Equity Accounts payable (trade) Income taxes payable (current) Long-term debt Common stock Retained earnings $ 34,000 ? ? 320,000 $410,000 $ $ ? 34,000 326,000 Additional Information Current ratio (at year end) Total liabilities + Total stockholders' equity Gross margin percentage ? ? Inventory turnover (Cost of goods sold + Ending inventory) Gross margin for Year 4 1.5 to 1.0 60% 40% 12.4 ti $341,000 Required a. Compute the balance in trade accounts payable as of December 31, Year 4. b. Compute the balance in retained earnings as of December 31, Year 4. c. Compute the balance in the inventory account as of December 31, Year 4. (Assume that the level of inventory did not change from last year.) (For all requirements, negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
The December 31, Year 4, balance sheet for Vernon Corporation is presented here. These are the only accounts on Vernon's balance sheet. Amounts indicated by question marks (?) can be calculated using the following additional information: Assets Cash VERNON CORPORATION Balance Sheet As of December 31, Year 4 Accounts receivable (net) Inventory Property, plant, and equipment (net) Liabilities and Stockholders' Equity Accounts payable (trade) Income taxes payable (current) Long-term debt Common stock Retained earnings $ 34,000 ? ? 320,000 $410,000 $ $ ? 34,000 326,000 Additional Information Current ratio (at year end) Total liabilities + Total stockholders' equity Gross margin percentage ? ? Inventory turnover (Cost of goods sold + Ending inventory) Gross margin for Year 4 1.5 to 1.0 60% 40% 12.4 ti $341,000 Required a. Compute the balance in trade accounts payable as of December 31, Year 4. b. Compute the balance in retained earnings as of December 31, Year 4. c. Compute the balance in the inventory account as of December 31, Year 4. (Assume that the level of inventory did not change from last year.) (For all requirements, negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 2SEA
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Transcribed Image Text:sing a company's liquidity
• 4-3 Calculate ratios for assessing a company's solvency
The December 31, Year 4, balance sheet for Vernon Corporation is presented here.
These are the only accounts on Vernon's balance sheet. Amounts indicated by
question marks (?) can be calculated using the following additional information:
Assets
Cash
VERNON CORPORATION
Balance Sheet As of December 31, Year 4
Accounts receivable (net)
Inventory
Property, plant, and equipment (net)
Liabilities and Stockholders' Equity
Accounts payable (trade)
Income taxes payable (current)
Long-term debt
Common stock
Retained earnings
a. Accounts payable
b. Retained earnings
c. Inventory
$ 34,000
?
?
Additional Information
Current ratio (at year end)
Total liabilities + Total stockholders' equity
Gross margin percentage
Prex
320,000
$410,000
$
$
$
$
273,333
162,000
41,250
$
Inventory turnover (Cost of goods sold Ending inventory)
Gross margin for Year 4
6 of 10 7
?
34,000
?
326,000
?
?
Required
a. Compute the balance in trade accounts payable as of December 31, Year 4.
b. Compute the balance in retained earnings as of December 31, Year 4.
c. Compute the balance in the inventory account as of December 31, Year 4. (Assume
that the level of inventory did not change from last year.)
(For all requirements, negative amounts should be indicated by a minus sign. Do
not round intermediate calculations. Round your answers to the nearest whole
dollar amount.)
1.5 to 1.0
60%
40%
12.4 ti
$341,000
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