Chapter 15, Problem 15AT

As the accounting manager of Spring Creek Plastics, Inc., you have been asked to calculate the following financial ratios for the company's 2015 annual report. Use the balance sheet and the income statement on page 528 for Spring Creek.

Spring Creek Plastics, Inc.

Balance Sheet As of December 31,2015

Assets
Cash	$250,000
Accounts Receivable	325,400
Merchandise Inventory	416,800
Marketable Securities	88,700
Supplies	12,100
Total Current Assets		$1,093,000
Land and Building	1,147,000
Fixtures and Equipment	868,200
Total Property. Plant, and Equipment		2,015,200
Total Assets		$3,108,200
Liabilities and Owner's Equity
Accounts Payable	$ 286,500
Notes Payable (6-month)	153,200
Total Current Liabilities		$439,700
Mortgage Payable	325,700
Notes Payable (4-year)	413,100
Total Long-Term Liabilities		738,800
Total Liabilities		1,178,500
Owner's Equity		1,929,700
Total Liabilities and Owner's Equity		$3,108,200

Spring Creek Plastics, Inc. Income Statement, 2015

Net Sales		$1,695,900
Merchandise Inventory. Jan. 1	$ 767,800
Net Purchases	314,900
Freight In	33,100
Goods Available for Sale	1,115,800
Merchandise Inventory. Dec. 31	239,300
Cost of Goods Sold		876,500
Gross Margin		819,400
Total Operating Expenses		702,300
Income before Taxes		117,100
Taxes		35,200
Net Income		$ 81,900

Inventory turnover: