The following financial information is for Cullumber Company.CULLUMBER COMPANYBalance SheetsDecember 31Assets20222021Cash$ 70,000$64,000Debt investments (short-term)53,00039,000Accounts receivable108,00090,000Inventory229,000162,000Prepaid expenses30,00025,000Land130,000130,000Building and equipment (net)264,000185,000Total assets$884,000$695,000Liabilities and Stockholders' EquityNotes payable$172,000$102,000Accounts payable65,00051,000Accrued liabilities41,00041,000Bonds payable, due 2025250,000172,000Common stock, $10 par202,000202,000Retained earnings154,000127,000Total liabilities and stockholders' equity$884,000$695,000CULLUMBER COMPANYIncome StatementsFor the Years Ended December 3120222021Sales revenue$890,000$786,000Cost of goods sold641,000575,000Gross profit249,000211,000Operating expenses194,000159,000$ 5000$ 52,000Net incomeAdditional information:Inventory at the beginning of 2021 was $116,000.1.2.Accounts receivable (net) at the beginning of 2021 were $90,000.3.Total assets at the beginning of 2021 were $642,000.4.No common stock transactions occurred during 2021 or 2022.All sales were on account.5. (a1)Compute the liquidity and profitability ratios of Cullumber Company for 2021 and 2022. (Round Curent ratio, Asset turnover andEarnings per share to 2 decimal places, eg. 15.50 and round all other answers to 1 decimal place, eg. 15.5. Round % change to O decima!places, for eg. 1% and if % change is a decrease show the numbers as negative, eg. -1% or (1%).)2021% Change2022LIQUIDITYCurrent ratio:1:1AccountsreceivablestimestimesturnoverInventoryturnovertimestimes20212022% ChangePROFITABILITYProfit marginAsset turnovertimestimesReturn on assetsEarnings per share2$2$(b)Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) asof December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to 0 decima!places, eg. 15 and round all other answers to 1 decimal place, e,g. 15.5. Round % change to 0 decimal places, for eg. 1% and if % change is adecrease show the numbers as negative, e.g. -1% or (1%).)SituationRatio1.18,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was$53,000.Return on commonstockholders' equity2.All of the notes payable were paid in 2023. All other liabilities remained at their December 31,2022 levels. Total assets on December 31, 2023, were $904,000.Debt to assets ratioThe market price of common stock was $9 and $13 on December 31, 2022 and 2023,respectively.3.Price-earnings ratio20222023% ChangeReturn oncommonstockholders'equityDebt to assetsratioPrice earningsratiotimestimes

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The following financial information is for Cullumber Company. CULLUMBER COMPANY Balance Sheets December 31 Assets 2022 2021 $ 70,000 $ 64,000 Cash Debt investments (short-term) 53,000 39,000 Accounts receivable 108,000 90,000 Inventory 229,000 162,000 Prepaid expenses 30,000 25,000 Land 130,000 130,000 Building and equipment (net) 264,000 185,000 Total assets $884,000 $695,000 Liabilities and Stockholders' Equity Notes payable $172,000 $102,000 Accounts payable 65,000 51,000 Accrued liabilities 41,000 41,000 Bonds payable, due 2025 250,000 172,000 Common stock, $10 par 202,000 202,000 Retained earnings 154,000 127,000 Total liabilities and stockholders' equity $884,000 $695,000 CULLUMBER COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $890,000 $786,000 Cost of goods sold 641,000 575,000 Gross profit 249,000 211,000 Operating expenses 194,000 159,000 $ 55,000 $ 52,000 Net income Additional information: 1. Inventory at the beginning of 2021 was $116,000. 2. Accounts receivable (net) at the beginning of 2021 were $90,000. 3. Total assets at the beginning of 2021 were $642,000. 4. No common stock transactions occurred during 2021 or 2022. 5. All sales were on account.

The following financial information is for Cullumber Company. CULLUMBER COMPANY Balance Sheets December 31 Assets 2022 2021 $ 70,000 $ 64,000 Cash Debt investments (short-term) 53,000 39,000 Accounts receivable 108,000 90,000 Inventory 229,000 162,000 Prepaid expenses 30,000 25,000 Land 130,000 130,000 Building and equipment (net) 264,000 185,000 Total assets $884,000 $695,000 Liabilities and Stockholders' Equity Notes payable $172,000 $102,000 Accounts payable 65,000 51,000 Accrued liabilities 41,000 41,000 Bonds payable, due 2025 250,000 172,000 Common stock, $10 par 202,000 202,000 Retained earnings 154,000 127,000 Total liabilities and stockholders' equity $884,000 $695,000 CULLUMBER COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $890,000 $786,000 Cost of goods sold 641,000 575,000 Gross profit 249,000 211,000 Operating expenses 194,000 159,000 $ 55,000 $ 52,000 Net income Additional information: 1. Inventory at the beginning of 2021 was $116,000. 2. Accounts receivable (net) at the beginning of 2021 were $90,000. 3. Total assets at the beginning of 2021 were $642,000. 4. No common stock transactions occurred during 2021 or 2022. 5. All sales were on account.

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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