Markus Company’s common stock sold for $4.50 per share at the end of this year. The company paid a common stock dividend of $0.63 per share this year. It also provided the following data excerpts from this year’s financial statements: Ending Balance Beginning Balance Cash $ 40,000 $ 40,200 Accounts receivable $ 84,000 $ 63,700 Inventory $ 70,600 $ 84,000 Current assets $ 194,600 $ 187,900 Total assets $ 699,000 $ 755,600 Current liabilities $ 78,000 $ 76,500 Total liabilities $ 184,000 $ 165,600 Common stock, $1 par value $ 152,000 $ 152,000 Total stockholders’ equity $ 515,000 $ 590,000 Total liabilities and stockholders’ equity $ 699,000 $ 755,600 This Year Sales (all on account) $ 980,000 Cost of goods sold $ 568,400 Gross margin $ 411,600 Net operating income $ 263,250 Interest expense $ 13,500 Net income $ 174,825 Questions: 11) What is the company’s operating cycle? (Round your intermediate and final answers to 2 decimal places.) 12) a. What is the total asset turnover? (Round your answer to 2 decimal places.) b. What is the times interest earned ratio? (Round your answer to 2 decimal place.) 15) What is the equity multiplier? (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Markus Company’s common stock sold for $4.50 per share at the end of this year. The company paid a common stock dividend of $0.63 per share this year. It also provided the following data excerpts from this year’s financial statements:

	Ending Balance	Beginning Balance
Cash	$	40,000	$	40,200
Accounts receivable	$	84,000	$	63,700
Inventory	$	70,600	$	84,000
Current assets	$	194,600	$	187,900
Total assets	$	699,000	$	755,600
Current liabilities	$	78,000	$	76,500
Total liabilities	$	184,000	$	165,600
Common stock, $1 par value	$	152,000	$	152,000
Total stockholders’ equity	$	515,000	$	590,000
Total liabilities and stockholders’ equity	$	699,000	$	755,600

	This Year
Sales (all on account)	$	980,000
Cost of goods sold	$	568,400
Gross margin	$	411,600
Net operating income	$	263,250
Interest expense	$	13,500
Net income	$	174,825

Questions:

11) What is the company’s operating cycle? (Round your intermediate and final answers to 2 decimal places.)

12) a. What is the total asset turnover? (Round your answer to 2 decimal places.)

b. What is the times interest earned ratio? (Round your answer to 2 decimal place.)

15) What is the equity multiplier? (Round your answer to 2 decimal places.)

Required information
(The following information applies to the questions displayed below.]
Markus Company's common stock sold for $4.50 per share at the end of this year. The
company paid a common stock dividend of $0.63 per share this year. It also provided the
following data excerpts from this year's financial statements:
Ending
Balance
Beginning
Balance
$ 40,000 $ 40,200
$ 84,000 $ 63,700
$ 70,600 $ 84,000
$ 194,600 $ 187,900
$ 699,000 $ 755,600
$ 78,000 $ 76,500
$ 184,000 $ 165,600
$ 152,000 $ 152,000
$ 515,000 $ 590,000
Total liabilities and stockholders' equity $ 699,000 $ 755,600
Cash
Accounts receivable
Inventory
Current assets
Total assets
Current liabilities
Total liabilities
Common stock, $1 par value
Total stockholders' equity
Sales (all on account)
Cost of goods sold
Gross margin
Net operating income
Interest expense
This Year
$ 980,000
$ 568,400
$ 411,600
$ 263,250
$ 13,500
$ 174,825
Net income

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