Homework Answers
Q - 1
Sales in 2018 = S0 = 35,100; Account receivables turnover = 45 days, Hence account receivables in 2018 = AR0 = S0 x 45/360 = 35,100 x 45 / 360 = 4,388
Sales in 2019 = S1 = S0 x (1 + 18%) = 35,100 x (1 + 18%) = 41,418; Account receivables turnover = 40 days, Hence account receivables in 2019 = AR1 = S1 x 40/360 = 41,418 x 40 / 360 = 4,602
Hence, the difference = 4,602 - 4,388 = 215
Hence, the correct answer is option b. $ 215
Q - 2
Suppliers bear the same turnover of 60 days. Hence, it's ratio to purchases will remain same in both the year. COGs is constant at 67% of sales. So, suppliers will bear a constant ratio with sales in both the years. Hence, since sales increases by 18%, suppliers will also increase by 18%. Hence, the correct answer is the last option i.e. option d. 18%
Q - 3
AR1 = 4,602 calculated in Q - 1
Suppliers in 2019 = AP1 = 18% over last year (as explained in Q - 2 above) = 3,919.5 x (1 + 18%) = 4,625
Inventories in 2019 = I1 = 72 days of COGS = S1 x 67% x 72 / 360 = 41,418 x 67% x 72 / 360 = 5,550
Hence, ONWC in 2019 = AR1 + I1 - AP1 = 4,602 + 5,550 - 4,625 = 5,527
Hence, the correct answer is the option a. $ 5,527
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please answer each multiple choice with work
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Module 2
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Using the financial statements and additional information,
compute the following ratios for Hampton Company for 2019. Show all
computations.
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Use this information to determine the dollar values of various
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Calculate values for the following (round to the nearest
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b. Cost of goods
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f. Total assets
g. Total common stock equity
h....
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ratios for 2018. Instead, use the number presented on the 2018
balance sheet.
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please answer each multiple choice with work
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Module 2
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Using the financial statements and additional information,
compute the following ratios for Hampton Company for 2019. Show all
computations.
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McDougal Printing. Inc., had sales totaling $34,000,000 in fiscal
year 2019. Some ratios for the company are listed (pictured) below.
Use this information to determine the dollar values of various
income statement and balance sheet accounts as requested. Assume a
365-day year.
Calculate values for the following (round to the nearest
dollar):
a. Gross profits
b. Cost of goods
c. Operating Profits
d. Operating expenses
e. Earnings available for common stockholders
f. Total assets
g. Total common stock equity
h....
The following financial statements apply to Karl Company:
Calculate the following ratios for 2018 and 2019. Since 2017
numbers are not presented, do not use averages when calculating the
ratios for 2018. Instead, use the number presented on the 2018
balance sheet.
2019 2018 $420,000 16,000 436,000 $350,000 10,000 360,000 252,000 42,000 22,000 6,000 42,000 364,000 $ 72,000 206,000 38,000 20,000 6,000 36,000 306,000 $ 54,000 Revenues Net sales Other revenues Total revenues Expenses Cost of goods sold Selling expenses...
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