Problem 13-17A Horizontal analysis Financial statements for Allendale Company ol
ID: 2594182 • Letter: P
Question
Problem 13-17A Horizontal analysis Financial statements for Allendale Company ollo CHECI Total as Total ALLENDALE COMPANY Balance Sheets As of December 31 2018 2019 Assets Current assets S 36,000 6,000 46,000 143,000 10,000 241,000 20,000 255,000 24,000 $540,000 Cash Marketable securities Accounts receivable (net) Inventories Prepaid items s 40,000 20,000 54,000 135,000 25.000 274,000 27,000 270,000 29,000 $600,000 Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders Equity Liabilities Current liabilities Notes payable $ 17,000 113,800 21,000 151,800 $6,000 100,000 15,000 121,000 Accounts payable Salaries payable Total current liabilities Noncurrent liabilities Bonds payable 100,000 100,000 Other 32,000 27.000 132,000127,000 Total noncurrent liabilities Total liabilities 283.80 248,000 Stockholders' equity Preferred stock (par value $10, 4% cumulative, nonparticipating: 8,000 shares authorized and issued) 80,000 80,000 Common stock (no par; 50,000 shares authorized 0,000 shares issued) 80,000 156,200 316.200 $600,000 80,000 132,000 292,000 $540,000 Retained earnings Total stockholders' equity otal liabilities and stockholders' equity
Explanation / Answer
2019 2018 1 Current assets 274000 241000 Current liabilities 151800 121000 Working capital = Current assets - current liabilities Working capital 122200 120000 2 Current ratio = Current assets / current liabilities Current ratio 1.8 2.0 3 Acid test ratio = Liquid assets / current liabilities Liquid assets = current assets - prepaid expense - merchandise inventory Liquid assets 114000 88000 Current liabilities 151800 121000 Acid test ratio 0.8 0.7 4 Accounts receivable turnover = net credit sales /Average accounts receivable Net sales 230000 210000 Beginning accounts receivable 46000 47000 Ending accounts receivable 54000 46000 Average accounts receivable 50000 46500 Accounts receivable turnover 4.6 4.5 5 Days sales outstanding = 365 / accounts receivable tunover Days sales outstanding 79.3 80.8 2019 2018 6 Inventory turnover = Cost of goods sold / Average inventory Cost of goods sold 120000 103000 Beginning inventory 143000 140000 Ending inventory 135000 143000 Average inventory 139000 141500 Average inventory = (Beginning + Ending )/2 Inventory turnover 0.9 0.7 7 Days sale in inventory = 365 / inventory turnover Days sales in inventory 423 501 Days