December 31 2010 2009 Cash $ 25,000 $ 30,000 Receivables (net) 65,000 60,000 Inv
ID: 2361632 • Letter: D
Question
December 31 2010 2009 Cash $ 25,000 $ 30,000 Receivables (net) 65,000 60,000 Inventories 60,000 50,000 Plant assets (net) 200,000 180,000 $350,000 $320,000 Accounts payable $ 50,000 $ 60,000 Mortgage payable (15%) 100,000 100,000 Common stock, $10 par 140,000 120,000 Retained earnings 60,000 40,000 $350,000 $320,000 Instructions Compute the following ratios at December 31, 2010. (a) Current. (e) Days in inventory. (b) Receivables turnover. (f ) Cash debt coverage. (c) Average collection period. (g) Current cash debt coverage. (d) Inventory turnover. (h) Free cash flow.Explanation / Answer
December 31 2010 2009 Cash $ 25,000 $ 30,000 Receivables (net) 65,000 60,000 Inventories 60,000 50,000 Plant assets (net) 200,000 180,000 $350,000 $320,000 Accounts payable $ 50,000 $ 60,000 Mortgage payable (15%) 100,000 100,000 Common stock, $10 par 140,000 120,000 Retained earnings 60,000 40,000 $350,000 $320,000 Instructions Compute the following ratios at December 31, 2010.
(a) Current. 3.000 :1
(e) Days in inventory. 101.389 days
(b) Receivables turnover 5.600 times
. (f ) Cash debt coverage. 0.873 times
(c) Average collection period. 65.179 days
(g) Current cash debt coverage. 0.873 times
(d) Inventory turnover. 3.600 times
(h) Free cash flow. 5000