FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Determine the following (1–18) measures for 20Y2, rounding to one decimal place, except the dollar amount, which should be rounded to the nearest cent. Use the rounded answer to the requirement for subsequent requirements, if required. Assume 365 days a year. Show each formula and calculation on the worksheet.
           
amount
which should be rounded to the nearest cent. use the rounded answer to
       
the requirment for subsequent requirements, if required. Assume 365 days a year.
                         
        Formula Calculation and Answer                          
1 Working Capital           Stargel Inc.                        
2 Current ratio          
Comparative Retained Earnings Statement
                       
3 Quick ratio          
For the Years Ended December 31, 20Y2 and 20Y1
                       
4
Accounts receivable turnover
                20Y2 20Y1                
5 Number of days' sales in receivables   days  
Retained earnings, January 1
    $5,375,000 $4,545,000                
6
Inventory turnover
          Net income     $900,000 $925,000                
7 Number of days' sales in inventory   days   Dividends:                        
8
Ratio of fixed assets to long-term liabilities
         
On preferred stock
    -45,000 -45,000                
9
Ratio of liabilities to stockholders' equity
         
On common stock
    -50,000 -50,000                
10
Times interest earned
         
Increase in retained earnings
    $805,000 $830,000                
11 Asset turnover          
Retained earnings, December 31
    $6,180,000 $5,375,000                
12 Return on total assets     %                            
13 Return on stockholders’ equity     %                            
14 Return on common stockholders’ equity     %                            
15 Earnings per share on common stock                                
16 Price-earnings rati0                                  
17 Dividends per share of common stock                                
18 Dividend yield                                  
                                       
Stargel Inc.           Stargel Inc.                          
Comparative Balance Sheet
         
Comparative Income Statement
                         
December 31, 20Y2 and 20Y1
         
For the Years Ended December 31, 20Y2 and 20Y1
                         
      20Y2 20Y1         20Y2 20Y1                  
Assets           Sales     $10,000,000 $9,400,000                  
Current assets:          
Cost of goods sold
    -5,350,000 -4,950,000                  
Cash     $500,000 $400,000   Gross profit     $4,650,000 $4,450,000                  
Marketable securities
    1,010,000 1,000,000  
Selling expenses
    -$2,000,000 -$1,880,000                  
Accounts receivable (net)
    740,000 510,000  
Administrative expenses
    -1,500,000 -1,410,000                  
Inventories     1,190,000 950,000  
Total operating expenses
    -$3,500,000 -$3,290,000                  
Prepaid expenses     250,000 229,000  
Operating income
    $1,150,000 $1,160,000                  
Total current assets
    $3,690,000 $3,089,000  
Other revenue and expense:
                         
Long-term investments
    2,350,000 2,300,000   Other revenue     150,000 140,000                  
Property, plant, and equipment (net)
    3,740,000 3,366,000  
Other expense (interest)
    -170,000 -150,000                  
Total assets     $9,780,000 $8,755,000  
Income before income tax expense
    $1,130,000 $1,150,000                  
Liabilities          
Income tax expense
    -230,000 -225,000                  
Current liabilities     $900,000 $880,000   Net income     $900,000 $925,000                  
Long-term liabilities:
                                     
Mortgage note payable, 10%
    $200,000 $0                              
Bonds payable, 10%
    1,500,000 1,500,000                              
Total long-term liabilities
    $1,700,000 $1,500,000                              
Total liabilities     $2,600,000 $2,380,000                              
Stockholders' Equity
                                     
Preferred $0.90 stock, $10 par
    $500,000 $500,000                              
Common stock, $5 par
    500,000 500,000                              
Retained earnings     6,180,000 5,375,000                              
Total stockholders' equity
    $7,180,000 $6,375,000                              
Total liabilities and stockholders' equity
    $9,780,000 $8,755,000                              
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