Presented below is information related to Whispering Inc. WHISPERING INC. BALANC

Question

Presented below is information related to Whispering Inc. WHISPERING INC. BALANCE SHEET DECEMBER 31, 2017 $45,100 $109,500 15,100 Cash Receivables Less: Allowance Inventory Prepaid insurance Land Equipment (net) 94,400 170,000 8,000 Notes payable (short-term) Accounts payable Accrued liabilities Common stock (par $5) Retained earnings $49,900 31,900 5,100 259,600 141,500 20,000 150,500 $488,000 $488,000 $1,396,900 WHISPERING INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue Cost of goods sold Inventory, Jan. 1, 2017 $201,700 Purchases 783,300 Cost of goods available for sale 985,000 Inventory, Dec. 31, 2017 (170,000) Cost of goods sold Gross profit on sales Operating expenses 815,000 581,900 168,700

Explanation / Answer

As per policy only first four questions will be answered

1. Current Ratio = current assets / current liabilities

Current assets = cash + accounts receivable (net) + inventory + prepaid insurance = 45100+94400+170000+8000= 317500

Current liabilities = notes payable + accounts payable +accrued liabilities = 49900+31900+5100 = 86900

Current Ratio = 317500/86900 = 3.65

2. Inventory turnover = cogs / inventory = 815000/170000 =4.79

3. Accounts receivable turnover = sales / accounts receivable (net) = 1396900/94400 = 14.80

4. Earning per share = net income / number of outstanding shares = 413200/(259600/5) = 7.96

5. Profit margin on sales = net income / sales = 413200/1396900 = 29.58%

6. Return on assets = net income / total assets = 413200/488000 = 84.67%

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