The comparative statements of Beulah Company are presented below. BEULAH COMPANY
ID: 2375051 • Letter: T
Question
The comparative statements of Beulah Company are presented below.BEULAH COMPANY
Income Statement
For the Years Ended December 31 2013 2012 Net sales (all on account) $599,000 $520,000 Expenses Cost of goods sold 416,000 354,000 Selling and administrative 121,000 114,000 Interest expense 8,500 5,900 Income tax expense 18,700 13,200 Total expenses 564,200 487,100 Net income $ 34,800 $ 32,900
BEULAH COMPANY
Balance Sheets
December 31 Assets 2013 2012 Current assets Cash $ 20,000 $ 18,500 Short-term investments 17,400 14,600 Accounts receivable (net) 85,800 74,200 Inventory 90,700 70,800 Total current assets 213,900 178,100 Plant assets (net) 423,000 384,000 Total assets $636,900 $562,100 Liabilities and Stockholders%u2019 Equity Current liabilities Accounts payable $121,000 $110,000 Income taxes payable 22,700 20,300 Total current liabilities 143,700 130,300 Long-term liabilities Bonds payable 120,000 79,600 Total liabilities 263,700 209,900 Stockholders%u2019 equity Common stock ($5 par) 150,000 150,000 Retained earnings 223,200 202,200 Total stockholders%u2019 equity 373,200 352,200 Total liabilities and stockholders%u2019 equity $636,900 $562,100
Additional data:
The common stock recently sold at $18.50 per share.
Compute the following ratios for 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)
BEULAH COMPANY
Income Statement
For the Years Ended December 31 2013 2012 BEULAH COMPANY
Balance Sheets
December 31 Assets 2013 2012 Liabilities and Stockholders%u2019 Equity
Question 1
Explanation / Answer
a) current ratio = Current assets/c.liabilities ============================================================================================================================================ 213,900 /143,700= 1.4885 ============================================================================================================================================ b. acid test: Current assets - stock/c.liabilities ============================================================================================================================================ (213,900- 79,600) /143,700 ========================================================================================================================0.934 ============================================================================================================================================ c. accounts rec turnover times = Sales/receivables ======================================================================================================================== ============================================================d. Inventory turnover times = sales/inventory ======================================================================================================================== e.Profit margin = Net income/ Sales ============================================================================================================================== =========================================================================================================================================== =f. asset turnover times = Sales/ net assets ============================================================================================================================== ======================================================================================================================================================================================================================================================================================== g. Return on assets % = Net icome/netassets *100 ============================================================ ============================================================================================================================================ h. Return on common stockholders