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Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $50,900; total assets, $259,400: common stock, $85,000; and retained earnings, $40,546.) Assets Cash Short-term investments. Accounts receivable, net Merchandise inventory Prepaid expenses $ 20,000 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable 8,600 Accrued wages payable 32,800 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,850 Common stock. Plant assets, net 153,300 Retained earnings Total assets $ 255,700 Total liabilities and equity CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income $ 455,600 297,250 158,350 98,900 4,600 54,850 22,096 $ 32,754 $ 19,500 4,600 2,900 70,400 85,000 73,300 $ 255,700 Required: Compute the following: (1) current ratio. (2) acid-test ratio. (3) days' sales uncollected. (4) inventory turnover, (5) days' sales in inventory. (6) debt-to-equity ratio. (7) times interest earned. (8) profit margin ratio, (9) total asset turnover. (10) return on total assets, and (11) return on equity. Note: Do not round intermediate calculations.

Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $50,900; total assets, $259,400: common stock, $85,000; and retained earnings, $40,546.) Assets Cash Short-term investments. Accounts receivable, net Merchandise inventory Prepaid expenses $ 20,000 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable 8,600 Accrued wages payable 32,800 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,850 Common stock. Plant assets, net 153,300 Retained earnings Total assets $ 255,700 Total liabilities and equity CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income $ 455,600 297,250 158,350 98,900 4,600 54,850 22,096 $ 32,754 $ 19,500 4,600 2,900 70,400 85,000 73,300 $ 255,700 Required: Compute the following: (1) current ratio. (2) acid-test ratio. (3) days' sales uncollected. (4) inventory turnover, (5) days' sales in inventory. (6) debt-to-equity ratio. (7) times interest earned. (8) profit margin ratio, (9) total asset turnover. (10) return on total assets, and (11) return on equity. Note: Do not round intermediate calculations.

FINANCIAL ACCOUNTING
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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Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $50,900; total assets, $259,400; common stock, $85,000; and retained earnings, $40,546.) CABOT CORPORATION Balance Sheet December 31 of current year Assets Cash Short-term investments Accounts receivable, net Liabilities and Equity $ 20,000 Accounts payable 8,600 Accrued wages payable 32,800 Income taxes payable Merchandise inventory Prepaid expenses. 38,150 Long-term note payable, secured by mortgage on plant assets Plant assets, net 2,850 153,300 Common stock Retained earnings Total assets $ 255,700 Total liabilities and equity CABOT CORPORATION Income Statement $ 19,500 4,600 2,900 70,400 85,000 73,300 $ 255,700 For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses. Interest expense Income before taxes Income tax expense Net income Required: $ 455,600 297,250 158,350 98,900 4,600 54,850 22,096 $ 32,754 Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected. (4) inventory turnover, (5) days' sales in inventory. (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity. Note: Do not round intermediate calculations.
Transcribed Image Text:Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $50,900; total assets, $259,400; common stock, $85,000; and retained earnings, $40,546.) CABOT CORPORATION Balance Sheet December 31 of current year Assets Cash Short-term investments Accounts receivable, net Liabilities and Equity $ 20,000 Accounts payable 8,600 Accrued wages payable 32,800 Income taxes payable Merchandise inventory Prepaid expenses. 38,150 Long-term note payable, secured by mortgage on plant assets Plant assets, net 2,850 153,300 Common stock Retained earnings Total assets $ 255,700 Total liabilities and equity CABOT CORPORATION Income Statement $ 19,500 4,600 2,900 70,400 85,000 73,300 $ 255,700 For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses. Interest expense Income before taxes Income tax expense Net income Required: $ 455,600 297,250 158,350 98,900 4,600 54,850 22,096 $ 32,754 Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected. (4) inventory turnover, (5) days' sales in inventory. (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on equity. Note: Do not round intermediate calculations.
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