13–605
13–606
13–607
260.
Neiger Corporation has provided the following financial data:
Balance Sheet
Assets
Year 2
Year 1
Current assets:
Cash
$216,000
$160,000
Accounts receivable
131,000
120,000
Inventory
104,000
120,000
Prepaid expenses
12,000
10,000
Total current assets
463,000
410,000
Plant and equipment, net
858,000
870,000
Total assets
$1,321,000
$1,280,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$109,000
$100,000
Accrued liabilities
59,000
60,000
Notes payable, short term
58,000
60,000
Total current liabilities
226,000
220,000
Bonds payable
120,000
120,000
Total liabilities
346,000
340,000
Stockholders’ equity:
Common stock, $2 par value
100,000
100,000
Additional paid-in capital-common stock
60,000
60,000
Retained earnings
815,000
780,000
Total stockholders’ equity
975,000
940,000
Total liabilities & stockholders’ equity
$1,321,000
$1,280,000
Income Statement
Sales (all on account)
Cost of goods sold
Gross margin
13–608
Operating expenses
Net operating income
Interest expense
Net income before
taxes
Income taxes (30%)
Net income
Required:
a. What is the company’s working capital at the end of Year 2?
b. What is the company’s current ratio at the end of Year 2?
c. What is the company’s acid-test (quick) ratio at the end of Year 2?
d. What is the company’s times interest earned for Year 2?
e. What is the company’s debt-to-equity ratio at the end of Year 2?
f. What is the company’s equity multiplier at the end of Year 2?
13–609
13–610
261.
Walker Corporation has provided the following financial data:
Year 2
Year 1
Current assets:
Cash
$195,000
$150,000
Accounts
receivable
186,000
180,000
Inventory
165,000
170,000
Prepaid
expenses
29,000
30,000
Total current
assets
$575,000
$530,000
Total current
liabilities
$254,000
$270,000
Total liabilities
$434,000
$450,000
Total
stockholders’
equity
$988,000
$960,000
The company’s net operating income for Year 2 was $63,615 and its interest expense was
$15,000.
Required:
a. What is the company’s working capital at the end of Year 2?
b. What is the company’s current ratio at the end of Year 2?
c. What is the company’s acid-test (quick) ratio at the end of Year 2?
d. What is the company’s times interest earned for Year 2?
e. What is the company’s debt-to-equity ratio at the end of Year 2?
f. What is the company’s equity multiplier at the end of Year 2?
13–611
13–612
262.
Data from Ben Corporation’s most recent balance sheet and income statement appear
below:
This Year
Last Year
Accounts receivable
$104,000
$124,000
Inventory
$159,000
$188,000
Sales on account
$825,000
Cost of goods sold
$660,000
Required:
Compute the average sale period for this year:
13–613
263.
Dilisio Corporation has provided the following data:
This
Year
Last
Year
Accounts
receivable
$126,000
$116,000
Inventory
$226,000
$194,000
Sales on
account
$659,000
Cost of goods
sold
$417,000
Required:
Compute the inventory turnover for this year:
13–614
264.
Hagle Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$279,000
$170,000
Accounts
receivable
136,000
150,000
Inventory
141,000
150,000
Prepaid
expenses
69,000
60,000
Total current
assets
625,000
530,000
Plant and
equipment,
net
789,000
870,000
Total assets
$1,414,000
$1,400,000
Liabilities
and
Stockholders’
Equity
Current liabilities:
Accounts
payable
$186,000
$190,000
Accrued
liabilities
29,000
30,000
Notes payable,
short term
74,000
70,000
Total current
liabilities
289,000
290,000
Bonds payable
130,000
130,000
Total liabilities
419,000
420,000
Stockholders’
13–615
equity:
Common
stock, $4 par
value
200,000
200,000
Additional
paid-in capital-
common
stock
90,000
90,000
Retained
earnings
705,000
690,000
Total
stockholders’
equity
995,000
980,000
Total liabilities &
stockholders’
equity
$1,414,000
$1,400,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account)
$1,280,000
Cost of goods sold
750,000
Gross margin
530,000
Operating expenses
489,429
Net operating income
40,571
Interest expense
12,000
Net income before taxes
28,571
Income taxes (30%)
8,571
Net income
$20,000
Required:
a. What is the company’s accounts receivable turnover for Year 2?`
b. What is the company’s average collection period (age of receivables) for Year 2?
c. What is the company’s inventory turnover for Year 2?
d. What is the company’s average sale period (turnover in days) for Year 2?
e. What is the company’s operating cycle for Year 2?
f. What is the company’s total asset turnover for Year 2?
265.
Data from Dalpiaz Corporation’s most recent balance sheet and income statement appear
below:
This
Year
Last
Year
Accounts
receivable
$104,000
$114,000
Inventory
$157,000
$165,000
Sales on
account
$647,000
Cost of goods
sold
$438,000
Required:
Compute the average collection period for this year:
13–618
266.
Kestner Corporation has provided the following financial data:
Year 2
Accounts
receivable
$195,000
Inventory
$97,000
Total assets
$1,432,000
Sales (all on
account)
$1,360,000
Cost of goods
sold
$870,000
Required:
a. What is the company’s accounts receivable turnover for Year 2?
b. What is the company’s average collection period (age of receivables) for Year 2?
c. What is the company’s inventory turnover for Year 2?
d. What is the company’s average sale period (turnover in days) for Year 2?
e. What is the company’s operating cycle for Year 2?
f. What is the company’s total asset turnover for Year 2?
13–619
267.
Wyand Corporation’s net operating income last year was $212,000; its interest expense
was $26,000; its total stockholders’ equity was $1,000,000; and its total liabilities were
$370,000.
Required:
Compute the following for Year 2:
a. Times interest earned.
b. Debt-to-equity ratio.
13–620
268.
Fraction Corporation has provided the following financial data:
Year 2
Total assets
$1,447,000
Total
liabilities
$310,000
Total
stockholders’
equity
$1,137,000
Net operating
income
$38,571
Interest
expense
$10,000
Required:
a. What is the company’s times interest earned for Year 2?
b. What is the company’s debt-to-equity ratio at the end of Year 2?
c. What is the company’s equity multiplier at the end of Year 2?
13–621
269.
Babbitt Corporation has provided the following data from its most recent income
statement:
Net operating income
$94,000
Interest expense
$62,000
Net income before taxes
$32,000
Income taxes
$10,000
Net income
$22,000
Required:
Compute the times interest earned ratio. Show your work!
13–622
270.
Gambino Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$139,000
$190,000
Accounts
receivable
206,000
180,000
Inventory
103,000
100,000
Prepaid
expenses
95,000
90,000
Total current
assets
543,000
560,000
Plant and
equipment,
net
999,000
970,000
Total assets
$1,542,000
$1,530,000
Liabilities
and
Stockholders’
Equity
Current liabilities:
Accounts
payable
$109,000
$120,000
Accrued
liabilities
44,000
50,000
Notes payable,
short term
65,000
60,000
Total current
liabilities
218,000
230,000
Bonds payable
220,000
220,000
Total liabilities
438,000
450,000
Stockholders’
13–623
equity:
Common
stock, $5 par
value
350,000
350,000
Additional
paid-in capital—
common stock
60,000
60,000
Retained
earnings
694,000
670,000
Total
stockholders’
equity
1,104,000
1,080,000
Total liabilities &
stockholders’
equity
$1,542,000
$1,530,0000
Income Statement
For the Year Ended December 31,
Year 2
Sales (all on account)
$1,370,000
Cost of goods sold
860,000
Gross margin
510,000
Operating expenses
445,308
Net operating income
64,692
Interest expense
17,000
Net income before
taxes
47,692
Income taxes (35%)
16,692
Net income
$31,000
Required:
a. What is the company’s times interest earned for Year 2?
13–624
b. What is the company’s debt-to-equity ratio at the end of Year 2?
c. What is the company’s equity multiplier at the end of Year 2?