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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
A) Calculate the following liquidity ratios for 2020.
1. Working capital -
2.Current Ratio -
3. Acid test ratio-
4. Accounts receivable turnover-
B) calculate the following liquidity ratios for 2020.
1. Average collection period (in days)-
2. Inventory turnover (in times)-
C) calculate the average days to sell inventory for 2020.
1. Average days to sell inventory-

Transcribed Image Text:Ivanhoe Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income
statement for 2019 and 2020 follow.
Assets
Current assets
Cash
Accounts receivable, net
Inventory
Other current assets
Total current assets
Ivanhoe Medical
Comparative Balance Sheet
As of December 31
Property, plant, & equipment, net
Total assets
Liabilities and Stockholders' Equity
Current liabilities
Long-term debt
Total liabilities
2020
par value
$359,000
1,014,000
736,000
381,350
2,490,350
8,737,045
$3,167,000
3,702,600
6,869,600
Preferred stock, $5 par value
Common stock,
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity $11,227,395
58,950
$11,227,395 $10,561,745
104,6
4,194,195
2019
4,357,795
$417,450
776,400
681,000
247,000
2,121,850
8,439,895
$2,846,000
3,892,600
6,738,600
58,950
103,850
3,660,345
3,823,145
$10,561,745

Transcribed Image Text:Ivanhoe Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year
Sales revenue (all on account)
Cost of goods sold
Gross profit
Operating expenses
Net operating income
Interest expense
Net income before taxes
Income taxes (30%)
Net income
Dividends paid
Preferred dividends
Common dividends
Total dividends paid
Net income retained
Retained earnings, beginning of year
Retained earnings, end of year
2020
$10,177,200
5,612,550
4,564,650
2,840,250
1,724,400
300,400
1,424,000
427,200
$996,800
29,500
433,450
462,950
533,850
2019
$9,613,950
5,298,800
4,315,150
2,634,150
1,681,000
308,650
1,372,350
411,705
$960,645
29,500
413,100
442,600
518,045
3,142,300
3,660,345
$4,194,195 $3,660,345
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