Question

F Paragraph 21 Styles 1. Essay Questions.(38.Marks) A. Use the following information for questions Cash $ 90,000 Inventory 1110,000 Sales call on credit) $ 12.000.000 Net plant and equipment 2400,000 Marketable securities 150.000 Selling and administrative expense" 1350.000 Interest expense 150,000 Liabilities and Stockholders' Equity Accounts payable $ 150.000 Notes payable 750,000 Retained earnings 1800.000 Cost of goods soldi 9.000.000 Accounts receivable 1050,000 Long-term liabilities 900,000 Taxes 300,000 Extraordinary loss 600,000 Common stock 1200.000

Answer 1

1. Please find the banace sheet below:

Liabilities Common Stock Retained Earnings Amount (in $) 2400000 Balance sheet Amount (in $) Assets 1200000 Plant & Equipments 1800000 Inventory 900000 Marketable securities 750000 Accounts receivable 150000 Cash Long term liabilities Notes payable Accounts payable 1110000 150000 1050000 90000 Total liabilities 4800000 Total Assets 4800000

2. Please finf the income statemet below:

Particulars Sales Less: Cost of goods sold Income Statement Amount (in $) Amount (in $) 12000000 9000000 Operating profit 3000000 Selling & administrative expenses Lease payment Extraordinary loss 1200000 150000 600000 1950000 1050000 Profit before interest & tax Interest expenses Tax 150000 300000 450000 600000 Profit after tax

3. Please find the ratios below:

Ratio Value To measure Formula Profit margin 5 % To measure percentage of profit in relation to it's total sales Profit after tax/Sales*100 Return on asset 125 % To measure percentage of operating income out of the firm's Fixed asset Operating profit/Fixed assets 100 Return on equity 20 % To measure percentage of net income out of the total shareholder's equity Profit after tax/(Common stock + Retained earning)*100 Receivable turnover 11.43 Times To measure the times of credit sales per accounts receivable Net credit sales/accounts receivable Average collection period 31.93 Day's To measuse the period needed to collect for credit sales 365 days/Receivable turnover ratio Inventory Turnover 8.11 Times To measure cost needed to obtain per inventory Cost of goods sold/Inventory Fixed asset turnover 5 Times To measure the productive capacity of Firm's fix assets in order to generate sales Sales/Fixed assets Total asset Turnover 2.5 Times To measure the productive capacity of Firm's total assets in order to generate sales sales/Total assets Current Ratio 2.67 Times To measure the times of current asset per amount of current liabilities Current Assets/Current Liabilities Quick ratio 1.43 Times To measure the times of liquide asset per ammount of liquide liability (Current assets-inventory)/(Current liabilities-Bank O.D) Debt to total asset 0.19 Times To measure the amount of long term debt per 1% of total assets Long term debt/Total assets Times interest earned 7 Times To meassure the coverage of earning before interest & tax for each $ of interest expenses Earning before interest & tax/Interest expenses Fixed charge coverage 4 Times To measure the coverage of earning before fixed charge for per & of fixed charge (Earnng before interest & tax+Lease payment)/Interest expenses+Lease payment)