Question

The following accounts (in no particular order) are for Perfect Reb Corporation for the fiscal year ended December 31, 2017. (S/T = Short-Term; L/T = Long-Term) REQUIRED: A) Calculate Perfect Reb Corporation's net income or net loss for the 2017 fiscal year. It is HIGHLY RECOMMENDED that your work follow the format of a multiple step income statement. B) Using proper form, prepare Perfect Reb Corporation's balance sheet for 2017. C) Using the information provided, solve for the requested ratios. $52,000 Sales Discounts $5,000 Common Stock (13,000 shares outstanding) Accrued Expenses (Payables) 20,000 Income Tax Expense (25% of IBIT) ?????? Miscellaneous Operating Expenses 50,000 Cash 142,000 Accounts Receivable 20,000 Interest Expense 4,000 Buildings 186,000 Marketable Securities 62,000 Retained Earnings ?????? Notes Payable (due in 5 years) 12,000 Wages Expense 60,000 Rent Expense 11,000 Inventory 40,000 Unearned Revenue 19,000 Accumulated Depreciation - Buildings 48,000 15,000 Allowance for Uncollectible Accounts Sales Accounts Payable 41,000 433,000 Gain on Sale of Equipment 62,000 Mortgage Payable ($12,000 S/T) 144,000 Land 50,000 Sales Returns & Allowances 12,000 Bad Debt Expense 2,000 Depreciation Expense 11,000 L/T Investments 7,000 Cost of Goods Sold 109,000 Notes Receivable ($2,000 S/T) 13,000 Interest Revenue 3,000

Answer 1

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Reb Corporation	2017
Income Statement	Amount $	Amount $
Sales	433,000.00
Less: Sales Returns & Allowances	12,000.00
Less: Sales Discounts	5,000.00
Net Sales		416,000.00
Cost of goods sold		109,000.00
Gross profit		307,000.00
Other Operating Items
Wages Expense	(60,000.00)
Depreciation Expense	(11,000.00)
Misc. Operating Expenses	(50,000.00)
Gain on sale of equipment	62,000.00
Bad Debt expense	(2,000.00)
Interest Expense	(4,000.00)
Rent Expense	(11,000.00)
Interest Revenue	3,000.00
Other Operating Items		(73,000.00)
Income before tax		234,000.00
Less: Tax at 25%		58,500.00
Net Income		175,500.00
Number of shares outstanding		13,000.00
Earnings per share		13.50
Balance Sheet
Current Assets	Amount $	Amount $
Cash		142,000.00
Notes Receivable		2,000.00
Accounts Receivable	20,000.00
Less: Allowance for uncollectible debts	(15,000.00)	5,000.00
Inventory		40,000.00
Marketable Securities		62,000.00
Total Current Assets		251,000.00
Long term Assets
L/T Investments	7,000.00
Notes Receivable	11,000.00
Total Long term Assets		18,000.00
Fixed Assets
Land		50,000.00
Buildings	186,000.00
Accumulated Depreciation	(48,000.00)	138,000.00
Total Fixed Assets		188,000.00
Total Assets		457,000.00
Liabilities & Stockholder's Equity
Current Liabilities
Accrued Expense (Payables)	20,000.00
Mortgage Payable	12,000.00
Accounts Payable	41,000.00
Income Tax Payable	58,500.00
Unearned Revenue	19,000.00
Total Current Liabilities		150,500.00
Long term Liabilities
Notes Payable	12,000.00
Mortgage Payable	132,000.00
Total Long term Liabilities		144,000.00
Total Liabilities		294,500.00
Equity
Common Stock	52,000.00
Retained Earnings	110,500.00	This is the balancing figure.
Total Equity		162,500.00
Total Liabilities & Equity		457,000.00
	2017	2016
Total Current Assets	251,000.00
Less:
Inventory	40,000.00
Quick Assets	211,000.00
Inventory	40,000.00	15,000.00
Average Inventory	27,500.00
Net Accounts Receivable	5,000.00	2,000.00
Average Receivable	3,500.00
Dividend Per share	1.25
Market Price Per share	94.50

Answer 1
Acid Test Ratio	1.40
Quick Assets/Current Liabilities
Answer 2
Dividend Yield	1.32%
Dividend per share/ Market price of common share
Answer 3
Gross profit percentage	73.80%
Gross profit/ Net sales
Answer 4
Accounts Receivables Turnover	118.86
Net Sales / Average Receivable
Answer 5
Inventory Turnover	3.96
Cost of goods sold/Average Inventory
Answer 6
Price Earning Ratio	7.00
Market price of common share/ Earnings per share