The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: $ 22,000 160,000 380,000 11,000 573,000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net 820,000 $ 1,393,000 Total assets Liabilities and Stockholders' Equity Liabilities: $ 260,000 370,000 630,000 Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity $ 110,000 653,000 763,000 Total liabilities and stockholders' equity $ 1,393,000 Castile Products, Incorporated Income Statement For the Year Ended December 31 $ 3,300,000 1,137,500 2,162,500 630,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense 1,532,500 40,700 1,491,800 447,540 $ 1,044,260 Net income before taxes Income taxes (30%) Net income
The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: $ 22,000 160,000 380,000 11,000 573,000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net 820,000 $ 1,393,000 Total assets Liabilities and Stockholders' Equity Liabilities: $ 260,000 370,000 630,000 Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity $ 110,000 653,000 763,000 Total liabilities and stockholders' equity $ 1,393,000 Castile Products, Incorporated Income Statement For the Year Ended December 31 $ 3,300,000 1,137,500 2,162,500 630,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense 1,532,500 40,700 1,491,800 447,540 $ 1,044,260 Net income before taxes Income taxes (30%) Net income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Exercise 16-8 (Algo) Selected Financial Ratios [LO16-2, LO16-3, LO16-4]
The financial statements for Castile Products, Incorporated, are given below:
Castile Products, Incorporated
Balance Sheet
December 31
Assets
Current assets:
$ 22,000
160,000
380,000
Cash
Accounts receivable, net
Merchandise inventory
11,000
573,000
Prepaid expenses
Total current assets
Property and equipment, net
820,000
Total assets
$ 1,393,000
Liabilities and Stockholders' Equity
Liabilities:
$ 260,000
370,000
630,000
Current liabilities
Bonds payable, 11%
Total liabilities
Stockholders' equity:
Common stock, $10 par value
Retained earnings
Total stockholders' equity
$ 110,000
653,000
763,000
Total liabilities and stockholders' equity
$ 1,393,000
Castile Products, Incorporated
Income Statement
For the Year Ended December 31
$ 3,300,000
1,137,500
2,162,500
630,000
1,532,500
40,700
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Interest expense
1,491,800
447,540
Net income before taxes
Income taxes (30%)
Net income
$ 1,044,260](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a9cdb11-f1e5-4f12-9bde-49e90ee0952d%2Fff4ee424-ba7e-4e1c-b1b4-0dab94b22141%2F58fkwta_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 16-8 (Algo) Selected Financial Ratios [LO16-2, LO16-3, LO16-4]
The financial statements for Castile Products, Incorporated, are given below:
Castile Products, Incorporated
Balance Sheet
December 31
Assets
Current assets:
$ 22,000
160,000
380,000
Cash
Accounts receivable, net
Merchandise inventory
11,000
573,000
Prepaid expenses
Total current assets
Property and equipment, net
820,000
Total assets
$ 1,393,000
Liabilities and Stockholders' Equity
Liabilities:
$ 260,000
370,000
630,000
Current liabilities
Bonds payable, 11%
Total liabilities
Stockholders' equity:
Common stock, $10 par value
Retained earnings
Total stockholders' equity
$ 110,000
653,000
763,000
Total liabilities and stockholders' equity
$ 1,393,000
Castile Products, Incorporated
Income Statement
For the Year Ended December 31
$ 3,300,000
1,137,500
2,162,500
630,000
1,532,500
40,700
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Interest expense
1,491,800
447,540
Net income before taxes
Income taxes (30%)
Net income
$ 1,044,260
![Account balances at the beginning of the year were: accounts receivable, $170,000; and inventory, $270,000. All sales were on
account.
Required:
Compute the following financial data and ratios:
1. Working capital.
2. Current ratio. (Round your answer to 1 decimal place.)
3. Acid-test ratio. (Round your answer to 2 decimal places.)
4. Debt-to-equity ratio. (Round your answer to 2 decimal places.)
5. Times interest earned ratio. (Round your answer to 2 decimal places.)
6. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal
place.)
7. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)
8. Operating cycle. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)
1. Working capital
2. Current ratio
3. Acid-test ratio
4. Debt-to-equity ratio
5. Times interest earned ratio
6. Average collection period
days
7. Average sale period
days
8. Operating cycle
days](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a9cdb11-f1e5-4f12-9bde-49e90ee0952d%2Fff4ee424-ba7e-4e1c-b1b4-0dab94b22141%2Ftadd83a_processed.png&w=3840&q=75)
Transcribed Image Text:Account balances at the beginning of the year were: accounts receivable, $170,000; and inventory, $270,000. All sales were on
account.
Required:
Compute the following financial data and ratios:
1. Working capital.
2. Current ratio. (Round your answer to 1 decimal place.)
3. Acid-test ratio. (Round your answer to 2 decimal places.)
4. Debt-to-equity ratio. (Round your answer to 2 decimal places.)
5. Times interest earned ratio. (Round your answer to 2 decimal places.)
6. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal
place.)
7. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)
8. Operating cycle. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)
1. Working capital
2. Current ratio
3. Acid-test ratio
4. Debt-to-equity ratio
5. Times interest earned ratio
6. Average collection period
days
7. Average sale period
days
8. Operating cycle
days
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