Answer the accounting problem
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Use the information below to answer the next 18 questions.
Balance Sheet
Assets
Cash ………………………………………………………………………………………………
Short-term investments …………………………………………………………………….
Accounts receivable ………………………………………………………………………..
Inventory ………………………………………………………………………………………..
Property, plant and equipment (net)……………………………………………………
Total assets ………………………………………………………………………………
December 31
2007
2006
$ 25,000
$ 40,000
15,000
60,000
50,000
30,000
50,000
70,000
160,000
200,000
$300,000
$400,000
Liabilities and stockholders’ equity
Accounts payable …………………………………………………………………………….
Short-term notes payable ………………………………………………………………….
Bonds payable …………………………………………………………………………………
Common stock ………………………………………………………………………………..
Retained earnings …………………………………………………………………………….
Total liabilities and stockholders’ equity ……………………………………….
$ 20,000
40,000
80,000
60,000
100,000
$300,000
$ 30,000
90,000
160,000
45,000
75,000
$400,000
Income Statement
For the Year Ended December 31, 2007
Net sales …………………………………………………………………………………………
Cost of goods sold……………………………………………………………………………
Gross profit …………………………………………………………………………………….
Expenses
Selling expenses ………………………………………………………………………..
Administrative expenses……………………………………………………………..
Total expenses……………………………………………………………………..
Income before Interest Expense and Taxes………………………………………….
Interest expense……………………………………………………………………………….
Income before income taxes ……………………………………………………………..
Income tax expense ………………………………………………………………………….
Net income ……………………………………………………………………………………..
$360,000
184,000
176,000
30,000
59,000
Additional information:
a. 120,000 shares were outstanding in 2007; 90,000 shares were outstanding in 2006
b. Market value of common stock on December 31, 2007, was $12 per share.
For the year 2007:
16.
17.
18.
19.
20.
21.
22.
23.
Working capital is:
Current ratio is:
Quick ratio is:
Cash ratio is: .
Inventory turnover (#) is:
Inventory turnover in days:
Accounts receivable turnover (#) is:
Accounts receivable turnover in
days:
24.
25.
26.
27.
28.
29.
30.
31.
32.
Operating cycle is:
Net profit margin is:
Operating profit margin is:
Gross profit margin is:
Earnings per share is:
Price-to-Earnings is:
Debt ratio is:
Long-term debt ratio:
Debt-to-Equity is: .
89,000
87,000
12,000
75,000
30,000
$ 45,000
33. Times interest earned ratio is:
…
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