The following accounts are taken from the financial statements of Rosen, Inc., a
ID: 2442790 • Letter: T
Question
The following accounts are taken from the financial statements of Rosen, Inc., as of the end of the year 2010. The accounts are in alphabetical order.Accounts payable $28,000 Net income $48,000
Accounts receivable 66,000 other current liabilities 17,000
cash 54,000 total assets 250,000
gross profit 160,000 total liabilities 200,000
income before taxes 54,000 wages payable 5,000
Additional information: The average common shares outstanding during the year was 40,000.
Instructions: Compute the following:
Current ratio
Working capital
Earnings per share
Debt to total assets ratio
Explanation / Answer
Current ratio=Current Assets/Current Liabilities =54000+66000/17000=7.1 WC=CA-CL 120000-17000=103000 EPS=Net income/shares outstanding =48000/40000=1.2 Debt to Total Assets=Total liabilities/Total Assets =200000/250000=0.8