7. From your analysis of the financial information included in the problem, state whether you would or would not recommend purchasing the Fenway Company and state your reason.
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7. From your analysis of the financial information included in the problem, state whether you would or would not recommend purchasing the Fenway Company and state your reason.
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- Required Information [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes the following sccount balances: Accounts Debit Credit $ 27,100 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipnent Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2822) 5e, 200 $ 6,200 22, B00 66, 800 25, e00 3,5ee 30,5ee 70, e00 55,e00 25,100 Common Stock Retained Earnings Totals $190,300 $198,300 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $12,e0e. The cards are redeenable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $167,88e. January 15 Firework sales for the first half of the month total $155,e0e. All of these sales are on account. The cost of the units sold is $83,88e. January 23 Receive $127,480 from custoners on accounts receivable. January 25 Pay $11e,eee to…The condensed financial statements of Carla Vista Co. for the years 2021 and 2022 are presented below. CARLA VISTA CO.Balance SheetsDecember 31 (in thousands)20222021Current assets Cash and cash equivalents$330$360 Accounts receivable (net)590520 Inventory640570 Prepaid expenses130160 Total current assets1,6901,610Property, plant, and equipment (net)410380Investments130130Intangibles and other assets530510 Total assets$2,760$2,630Current liabilities$940$910Long-term liabilities660560Stockholders’ equity—common1,1601,160 Total liabilities and stockholders’ equity$2,760$2,630 CARLA VISTA CO.Income StatementsFor the Year Ended December 31 (in thousands)20222021Sales revenue$3,980$3,640Costs and expenses Cost of goods sold1,0901,010 Selling & administrative expenses2,4002,330 Interest expense1020 Total costs and expenses3,5003,360Income before income taxes480280Income tax expense192112Net income$ 288$ 168 Compute the following ratios for 2022 and 2021.…The following information (in $ millions) comes from the Annual Report of Saratoga Springs Company for the year ending 12/31/2024: Year ended 12/31/2024 $ 8,139 4,957 2,099 Net sales Cost of goods sold Selling and administrative expense Interest expense Income before taxes Net income Cash and cash equivalents Receivables, net Inventories Land, buildings and equipment at cost, net Total assets Total current liabilities Long-term debt Total liabilities Total stockholders' equity 606 477 648 Profit margin on sales 12/31/2024 $ 1,165 1,200. 1,245 13,690 $ 17,300 $ 5,937 5,781 $ 11,718 $5,582 Required: Compute the profit margin on sales for 2024. Note: Round your answer to 1 decimal place, e.g., 0.1234 as 12.3%. 12/31/2023 $ 83 854 709 4,034 $ 5,680 $ 2,399 2,411 $ 4,810 $ 870
- The following information has been extracted from the financial statements and notes of CASAN Ltd. 2019 2018 Cash and Cash Equivalents 59,100 47,700 Account Receivable(net) 137,800 129,800 Account Payable 45,750 39,950 Revenue 610,000 625,000 Cost of Goods Sold 559,500 568,500 Profit 50,500 56,500 Inventory 223,700 189,300 Total assets 540,000 555,000 Current Liabilities 250,900 265,700 Total liabilities 300,000 330,000 Short-term investments 75,400 85,900 Based on the above information calculate the following ratios: 1) Return on assets for 2019. 2) Profit Margin ratio for 2019. 3) Debt to assets ratio for 2019. 4) Acid-test ratio for 2018. 5) Inventory Turnover ratio for 2019.Cullumber Company has these comparative balance sheet data: CULLUMBER COMPANYBalance SheetsDecember 31 2022 2021 Cash $ 16,350 $ 32,700 Accounts receivable (net) 76,300 65,400 Inventory 65,400 54,500 Plant assets (net) 218,000 196,200 $376,050 $348,800 Accounts payable $ 54,500 $ 65,400 Mortgage payable (15%) 109,000 109,000 Common stock, $10 par 152,600 130,800 Retained earnings 59,950 43,600 $376,050 $348,800 Additional information for 2022: 1. Net income was $34,000. 2. Sales on account were $383,300. Sales returns and allowances amounted to $26,600. 3. Cost of goods sold was $200,600. 4. Net cash provided by operating activities was $59,000. 5. Capital expenditures were $26,400, and cash dividends were $16,500. Compute the following ratios at December 31, 2022. (Round current ratio and inventory turnover to 2 decimal…On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances:Accounts Debit CreditCash $ 11,200Accounts Receivable 34,000Allowance for Uncollectible Accounts $ 1,800Inventory 152,000Land 67,300Buildings 120,000Accumulated Depreciation 9,600Accounts Payable 17,700Common Stock 200,000Retained Earnings 155,400Totals $384,500 $384,500During January 2021, the…
- The following data are taken from the financial statements of Colby Company. Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 Accounts Receivable turnover Average collection period (b) 2022 $550,000 2022 2021 4,300,000 4,000,000 7.9 times $540,000 2021 7.5 times 46.2 days 48.7 days What conclusions about the management of accounts receivable can be drawn from the accounts receivable turnover and the average collections period.Cullumber Company has these comparative balance sheet data: CULLUMBER COMPANYBalance SheetsDecember 31 2022 2021 Cash $ 16,350 $ 32,700 Accounts receivable (net) 76,300 65,400 Inventory 65,400 54,500 Plant assets (net) 218,000 196,200 $376,050 $348,800 Accounts payable $ 54,500 $ 65,400 Mortgage payable (15%) 109,000 109,000 Common stock, $10 par 152,600 130,800 Retained earnings 59,950 43,600 $376,050 $348,800 Additional information for 2022: 1. Net income was $34,000. 2. Sales on account were $383,300. Sales returns and allowances amounted to $26,600. 3. Cost of goods sold was $200,600. 4. Net cash provided by operating activities was $59,000. 5. Capital expenditures were $26,400, and cash dividends were $16,500. (d) Inventory turnover. enter inventory turnover in times rounded to 2 decimal places times (e)…The following information was taken from the accounts receivable records of Sarasota Corporation as at December 31, 2020: OutstandingBalance Percentage Estimatedto be Uncollectible 0 – 30 days outstanding $160,000 0.5% 31 – 60 days outstanding 66,000 2.5% 61 – 90 days outstanding 40,200 4.0% 91 – 120 days outstanding 20,600 6.5% Over 120 days outstanding 5,600 10.0% (a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,200 prior to the adjustment (b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $3,880 prior to the adjustment.
- The following data are taken from the financial statements of Wildhorse Company. Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 (a) 2025 $594,200 4,842,800 Accounts receivable turnover Compute for each year the accounts receivable turnover. At the end of 2023, accounts receivable (net) was $542,00 2024 $ 616,500 4,054,750 2025 times 2024 timesThe comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Dux Company. Additional information from Dux’s accounting records is provided also. DUX COMPANY Comparative Balance Sheets December 31, 2024 and 2023 ($ in thousands) 2024 2023 Assets Cash $ 129.0 $ 36.0 Accounts receivable 64.0 66.0 Less: Allowance for uncollectible accounts (5.0) (4.0) Dividends receivable 19.0 18.0 Inventory 71.0 66.0 Long-term investment 31.0 26.0 Land 86.0 40.0 Buildings and equipment 161.0 266.0 Less: Accumulated depreciation (6.0) (130.0) $ 550.0 $ 384.0 Liabilities Accounts payable $ 29.0 $ 36.0 Salaries payable 18.0 21.0 Interest payable 20.0 18.0 Income tax payable 23.0 24.0 Notes payable 46.0 0 Bonds payable 91.0 50.0 Less: Discount on bonds (2.0) (3.0) Shareholders' Equity Common stock 210.0 200.0 Paid-in capital—excess of par 24.0 20.0 Retained earnings 99.0 18.0 Less: Treasury…The accounting records of Nettle Distribution show the following assets and liabilities as of December 31,2018 and 2019.December 31 2018 2019Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 64,300 $ 15,640Accounts receivable . . . . . . . . . . . 26,240 19,100Office supplies . . . . . . . . . . . . . . . . 3,160 1,960Office equipment . . . . . . . . . . . . . . 44,000 44,000Trucks . . . . . . . . . . . . . . . . . . . . . . . 148,000 157,000December 31 2018 2019Building . . . . . . . . . . . . . . . . . . . . . $ 0 $80,000Land . . . . . . . . . . . . . . . . . . . . . . . . 0 60,000Accounts payable . . . . . . . . . . . . . 3,500 33,500Note payable . . . . . . . . . . . . . . . . . 0 40,000Required1. Prepare balance sheets for the business as of December 31, 2018 and 2019. Hint: Report only total equityon the balance sheet and remember that total equity equals the difference between assets and liabilities.2. Compute net income for 2019 by comparing total equity amounts for these…