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ID: 2688223 • Letter: #
Question
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BALANCE SHEET
2012
2011
ASSETS
Cash
$40,000
$50,000
Accts. Receivable
260,000
200,000
Inventory
500,000
450,000
Total current assets
800,000
700,000
Fixed assets, net
400,000
300,000
Total assets
$1,200,000
$1,000,000
LIABILITIES AND EQUITY
Accts. Payable
$170,000
$130,000
Bank loan
90,000
90,000
Accruals
70,000
50,000
Total current liabilities
330,000
270,000
Long-term debt, 12%
400,000
300,000
Common stock, $10 par
300,000
300,000
Capital surplus
50,000
50,000
Retained earnings
120,000
80,000
Total liabilities & equity
$1,200,000
$1,000,000
Income statement
2012
2011
Net sales
$1,500,000
$1,300,000
Cost of goods sold
900,000
780,000
Gross profit
600,000
$20,000
Expenses: gen/admin
150,000
150,000
Marketing
150,000
130,000
Depreciation
53,000
40,000
Interest
57,000
45,000
Earnings before taxes
190,000
155,000
Incomes taxes
76,000
62,000
Net income
$114,000
$93,000
This problem uses the financial statements for the Genatron Manufacturing Corporation for the years of 2012 and 2011 from problem 6
a. Calculate Genatron
BALANCE SHEET
2012
2011
ASSETS
Cash
$40,000
$50,000
Accts. Receivable
260,000
200,000
Inventory
500,000
450,000
Total current assets
800,000
700,000
Fixed assets, net
400,000
300,000
Total assets
$1,200,000
$1,000,000
LIABILITIES AND EQUITY
Accts. Payable
$170,000
$130,000
Bank loan
90,000
90,000
Accruals
70,000
50,000
Total current liabilities
330,000
270,000
Long-term debt, 12%
400,000
300,000
Common stock, $10 par
300,000
300,000
Capital surplus
50,000
50,000
Retained earnings
120,000
80,000
Total liabilities & equity
$1,200,000
$1,000,000
Explanation / Answer
Hi, Please find the answer as follows" Part A: 2012 = 800000 - 330000 = 470000 2011 = 700000 - 270000 = 430000 Part B: Current Ratio: 2012 = 800000/330000 = 2.42 2011 = 700000/270000 = 2.59 Acid Test Ratio: 2012 = (800000 - 500000)/330000 = 0.91 2011 = (700000 - 450000)/270,000 = 0.93 Part C: ACP: 2012 = 260000/(1500000/365) = 63.3 days 2011 = 200000/(1300000/365) = 56.2 days Inventory Turnover: 2012 = 900000/500000 = 1.80 2011 = 780000/450000 = 1.73 Part D: Firm's accounts receivables balance has increase, and the firm is able to covert its inventory to sales faster than in the year 2011. Thanks, Aman