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Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Question
Calculate the following ratios for Year 4 and Year 3. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 3. Instead, use the number presented on the Year 3 balance sheet.
Note: Round ratio answers to 2 decimal places unless otherwise indicated.
- Working capital.
Current ratio .- Quick ratio.
- Receivables turnover (beginning receivables at January 1, Year 3, were $44,000).
- Average days to collect
accounts receivable .Note: Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.
- Inventory turnover (beginning inventory at January 1, Year 3, was $150,000).
- Number of days to sell inventory.
Note: Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.
- Debt-to-assets ratio.
Note: Round your answers to the nearest whole percent.
- Debt-to-equity ratio.
- Number of times interest was earned.
- Plant assets to long-term debt.
- Net margin.
- Turnover of assets (average total assets in Year 3 is $504,000).
Return on investment (average total assets in Year 3 is $504,000).- Return on
equity (average stockholders ' equity in Year 3 is $271,700). - Earnings per share (total shares outstanding is unchanged).
- Book value per share of common stock.
- Price-earnings ratio (market price per share: Year 3, $12.25; Year 4, $13.50).
Note: Round your intermediate calculations and final answer to 2 decimal places.
- Dividend yield on common stock.

Transcribed Image Text:Financial statements for Munoz Company follow.
MUNOZ COMPANY
Balance Sheets As of December 31
Year 4
Year 3
Assets
Current assets
Cash
Marketable securities
Accounts receivable (net)
Inventories
Prepaid items
Total current assets
Investments
Plant (net)
Land
Total assets
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Notes payable
Accounts payable
Salaries payable
Total current liabilities
Noncurrent liabilities
Bonds payable
$ 21,000
21,000
$ 17,000
7,000
51,000
43,000
136,000
144,000
25,000
10,000
221,000
15,000
254,000
22,000
260,000
28,000
$ 564,000
245,000
23,000
$ 504,000
$ 24,600
58,800
25,000
$ 8,300
45,000
19,000
108,400
72,300
140,000
140,000
Other
25,000
20,000
Total noncurrent liabilities
165,000
160,000
Total liabilities
273,400
232,300
Stockholders' equity
Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares
authorized and issued)
Common stock (no par; 50,000 shares authorized; 10,000 shares issued)
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
80,000
80,000
80,000
80,000
130,600
111,700
290,600
271,700
$ 564,000
$ 504,000
MUNOZ COMPANY

Transcribed Image Text:Revenues
Sales (net)
MUNOZ COMPANY
Statements of Income and Retained Earnings For the Years Ended December 31
Year 3
Other revenues
Total revenues
Expenses
Cost of goods sold
Selling, general, and administrative
Interest expense
Income tax expense
Total expenses
Net earnings (net income)
Retained earnings, January 1
Less: Preferred stock dividends
Common stock dividends
Retained earnings, December 31
Year 4
$ 330,000
10,000
$ 310,000
7,000
340,000
317,000
165,000
133,000
65,000
60,000
11,000
10,200
73,000
72,000
314,000
275,200
26,000
41,800
111,700
77,000
3,200
3,200
3,900
3,900
$ 130,600
$ 111,700
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