The following income statement and balance sheets for The Athletic Attic are provided. THE ATHLETIC ATTIC Income Statement For the year ended December 31, 2021 Net sales $8,840,000 Cost of goods sold 5,420,000 Gross profit 3,420,000 Expenses: Operating expenses $1,570,000 Depreciation expense 204,000 Interest expense 44,000 Income tax expense 354,000 Total expenses 2,172,000 Net income $1,248,000 THE ATHLETIC ATTIC Balance Sheets December 31 2021 2020 Assets Current assets: Cash $158,000 $208,000 Accounts receivable 760,000 780,000 Inventory 1,375,000 1,045,000 Supplies 104,000 79,000 Long-term assets: Equipment 1,120,000 1,120,000 Less: Accumulated depreciation (408,000) (204,000) Total assets $3,109,000 $3,028,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $109,000 $85,000 Interest payable 0 4,400 Income tax payable 37,000 30,400 Long-term liabilities: Notes payable 540,000 540,000 Stockholders' equity: Common stock 640,000 640,000 Retained earnings 1,783,000 1,728,200 Total liabilities and stockholders’ equity $3,109,000 $3,028,000 Required: Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your intermediate and final answers to 1 decimal place.) Risk Ratios 1. Receivables turnover ratio times 2. Average collection period days 3. Inventory turnover ratio times 4. Average days in inventory days 5. Current ratio to 1 6. Acid-test ratio to 1 7. Debt to equity ratio % 8. Times interest earned ratio times
The following income statement and balance sheets for The Athletic Attic are provided. THE ATHLETIC ATTIC Income Statement For the year ended December 31, 2021 Net sales $8,840,000 Cost of goods sold 5,420,000 Gross profit 3,420,000 Expenses: Operating expenses $1,570,000 Depreciation expense 204,000 Interest expense 44,000 Income tax expense 354,000 Total expenses 2,172,000 Net income $1,248,000 THE ATHLETIC ATTIC Balance Sheets December 31 2021 2020 Assets Current assets: Cash $158,000 $208,000 Accounts receivable 760,000 780,000 Inventory 1,375,000 1,045,000 Supplies 104,000 79,000 Long-term assets: Equipment 1,120,000 1,120,000 Less: Accumulated depreciation (408,000) (204,000) Total assets $3,109,000 $3,028,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $109,000 $85,000 Interest payable 0 4,400 Income tax payable 37,000 30,400 Long-term liabilities: Notes payable 540,000 540,000 Stockholders' equity: Common stock 640,000 640,000 Retained earnings 1,783,000 1,728,200 Total liabilities and stockholders’ equity $3,109,000 $3,028,000 Required: Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your intermediate and final answers to 1 decimal place.) Risk Ratios 1. Receivables turnover ratio times 2. Average collection period days 3. Inventory turnover ratio times 4. Average days in inventory days 5. Current ratio to 1 6. Acid-test ratio to 1 7. Debt to equity ratio % 8. Times interest earned ratio times
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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100%
The following income statement and
| THE ATHLETIC ATTIC | ||
| Income Statement | ||
| For the year ended December 31, 2021 | ||
| Net sales | $8,840,000 | |
| Cost of goods sold | 5,420,000 | |
| Gross profit | 3,420,000 | |
| Expenses: | ||
| Operating expenses | $1,570,000 | |
| 204,000 | ||
| Interest expense | 44,000 | |
| Income tax expense | 354,000 | |
| Total expenses | 2,172,000 | |
| Net income | $1,248,000 |
| THE ATHLETIC ATTIC | ||
| Balance Sheets | ||
| December 31 | ||
| 2021 | 2020 | |
| Assets | ||
| Current assets: | ||
| Cash | $158,000 | $208,000 |
| Accounts receivable | 760,000 | 780,000 |
| Inventory | 1,375,000 | 1,045,000 |
| Supplies | 104,000 | 79,000 |
| Long-term assets: | ||
| Equipment | 1,120,000 | 1,120,000 |
| Less: Accumulated depreciation | (408,000) | (204,000) |
| Total assets | $3,109,000 | $3,028,000 |
| Liabilities and |
||
| Current liabilities: | ||
| Accounts payable | $109,000 | $85,000 |
| Interest payable | 0 | 4,400 |
| Income tax payable | 37,000 | 30,400 |
| Long-term liabilities: | ||
| Notes payable | 540,000 | 540,000 |
| Stockholders' equity: | ||
| Common stock | 640,000 | 640,000 |
| 1,783,000 | 1,728,200 | |
| Total liabilities and stockholders’ equity | $3,109,000 | $3,028,000 |
Required:
Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your intermediate and final answers to 1 decimal place.)
|
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