The following information relates to Boston corporation: Account current year prior year Net sales (all credit) $445,400 $362,000 Cost of good sold $220,000 $185,000 Gross profit $225,400 $177,000 Income from operations $72,000 $80,000 Interest expense $8,000 $14,000 Net income $40,000 $35,000 Cash $34,000 $28,000 Account receivable, net $42,000 $62,000 Inventory $120,000 $100,000 Prepaid expenses $4,000 $2,000 Total current assets $200,000 $192,000 Total long term assets $200,000 $230,000 Total current liabilities $100,000 $165,000 Total long term liabilities $44,000 $95,000 Common stock, No par, 8,000 shares, value $120/share $80,000 $80,000 1. Compute the acid test ratio for the current year. 2. Compute the inventory turnover for the current year. 3. Compute days sales in receivables for the current year 4. Compute the current ratio for the current
The following information relates to Boston corporation: Account current year prior year Net sales (all credit) $445,400 $362,000 Cost of good sold $220,000 $185,000 Gross profit $225,400 $177,000 Income from operations $72,000 $80,000 Interest expense $8,000 $14,000 Net income $40,000 $35,000 Cash $34,000 $28,000 Account receivable, net $42,000 $62,000 Inventory $120,000 $100,000 Prepaid expenses $4,000 $2,000 Total current assets $200,000 $192,000 Total long term assets $200,000 $230,000 Total current liabilities $100,000 $165,000 Total long term liabilities $44,000 $95,000 Common stock, No par, 8,000 shares, value $120/share $80,000 $80,000 1. Compute the acid test ratio for the current year. 2. Compute the inventory turnover for the current year. 3. Compute days sales in receivables for the current year 4. Compute the current ratio for the current
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information relates to Boston corporation:
| Account | current year | prior year |
| Net sales (all credit) | $445,400 | $362,000 |
| Cost of good sold | $220,000 | $185,000 |
| Gross profit | $225,400 | $177,000 |
| Income from operations | $72,000 | $80,000 |
| Interest expense | $8,000 | $14,000 |
| Net income | $40,000 | $35,000 |
| Cash | $34,000 | $28,000 |
| $42,000 | $62,000 | |
| Inventory | $120,000 | $100,000 |
| Prepaid expenses | $4,000 | $2,000 |
| Total current assets | $200,000 | $192,000 |
| Total long term assets | $200,000 | $230,000 |
| Total current liabilities | $100,000 | $165,000 |
| Total long term liabilities | $44,000 | $95,000 |
| Common stock, No par, 8,000 shares, value $120/share | $80,000 | $80,000 |
1. Compute the acid test ratio for the current year.
2. Compute the inventory turnover for the current year.
3. Compute days sales in receivables for the current year
4. Compute the
5. Based on the above answer, evaluate the financial performance of Boston Corp.
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