Matthias Medical Comparative Balance Sheet As of December 31 2013 2012 Assets Cu
ID: 2470789 • Letter: M
Question
Matthias Medical
Comparative Balance Sheet
As of December 31
2013
2012
Assets
Current assets
Cash
$400,000
$417,500
Accounts receivable, net
1,056,000
776,400
Inventory
721,000
681,050
Other current assets
381,300
247,050
Total current assets
2,558,300
2,122,000
Property, plant, & equipment, net
8,710,235
8,439,930
Total assets
$11,268,535
$10,561,930
Liabilities and Stockholders’ Equity
Current liabilities
$3,208,000
$2,846,000
Long-term debt
3,702,700
3,892,650
Total liabilities
6,910,700
6,738,650
Preferred stock, $5 par value
59,000
58,900
Common stock, $0.25 par value
104,700
103,900
Retained earnings
4,194,135
3,660,480
Total stockholders’ equity
4,357,835
3,823,280
Total liabilities and stockholders’ equity
$11,268,535
$10,561,930
Matthias Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year
2013
2012
Sales revenue (all on account)
$10,177,300
$9,613,900
Cost of goods sold
5,613,000
5,298,700
Gross profit
4,564,300
4,315,200
Operating expenses
2,840,250
2,634,200
Net operating income
1,724,050
1,681,000
Interest expense
300,400
308,600
Net income before taxes
1,423,650
1,372,400
Income taxes (30%)
427,095
411,720
Net income
$996,555
$960,680
Dividends paid
Preferred dividends
29,550
29,500
Common dividends
433,350
413,100
Total dividends paid
462,900
442,600
Net income retained
533,655
518,080
Retained earnings, beginning of year
3,660,480
3,142,400
Retained earnings, end of year
$4,194,135
$3,660,480
Your answer is partially correct. Try again.
Calculate the following liquidity ratios for 2013. (If working capital is negative then enter with a negative sign preceding the number or parenthesis, e.g. -15,000 or (15,000). Round all answers except working capital to 2 decimal places, e.g. 2.55.)
a.
Working capital
b.
Current ratio
c.
Acid-test ratio
d.
Accounts receivable turnover
times
Please help, I cant seem to get the answer for Current Ratio and Acid-Test Ratio correct.
Matthias Medical
Comparative Balance Sheet
As of December 31
2013
2012
Assets
Current assets
Cash
$400,000
$417,500
Accounts receivable, net
1,056,000
776,400
Inventory
721,000
681,050
Other current assets
381,300
247,050
Total current assets
2,558,300
2,122,000
Property, plant, & equipment, net
8,710,235
8,439,930
Total assets
$11,268,535
$10,561,930
Liabilities and Stockholders’ Equity
Current liabilities
$3,208,000
$2,846,000
Long-term debt
3,702,700
3,892,650
Total liabilities
6,910,700
6,738,650
Preferred stock, $5 par value
59,000
58,900
Common stock, $0.25 par value
104,700
103,900
Retained earnings
4,194,135
3,660,480
Total stockholders’ equity
4,357,835
3,823,280
Total liabilities and stockholders’ equity
$11,268,535
$10,561,930
Matthias Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year
2013
2012
Sales revenue (all on account)
$10,177,300
$9,613,900
Cost of goods sold
5,613,000
5,298,700
Gross profit
4,564,300
4,315,200
Operating expenses
2,840,250
2,634,200
Net operating income
1,724,050
1,681,000
Interest expense
300,400
308,600
Net income before taxes
1,423,650
1,372,400
Income taxes (30%)
427,095
411,720
Net income
$996,555
$960,680
Dividends paid
Preferred dividends
29,550
29,500
Common dividends
433,350
413,100
Total dividends paid
462,900
442,600
Net income retained
533,655
518,080
Retained earnings, beginning of year
3,660,480
3,142,400
Retained earnings, end of year
$4,194,135
$3,660,480
Explanation / Answer
a)
Working capital = Current Asset-Current Liability
Working capital = 2558300-3208000
Working capital = -649700
b)
Current ratio = Current Asset/Current Liability
Current ratio = 2558300/3208000
Current ratio = 0.80
c)
Acid-test ratio = (Cash + Accounts receivable )/Current liabilities
Acid-test ratio = (400000+1056000)/3208000
Acid-test ratio = 0.45
d)
Accounts receivable turnover = Sale/Average Accounts Receivable
Accounts receivable turnover = 10177300/((1056000+776400)/2)
Accounts receivable turnover = 11.11 times