Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 14, Problem 14.11E
Wiemers Corporations comparative balance sheets are presented on the next page.
WIEMERS CORPORATION
Balance Sheets
December 31
| 2017 | 2016 | |
| Cash | $ 4,300 | $ 3,700 |
| 21,200 | 23,400 | |
| Inventory | 10,000 | 7,000 |
| Land | 20,000 | 26,000 |
| Buildings | 70,000 | 70,000 |
| Accumulated depreciation—buildings | (15,000) | (10,000) |
| Total | $110,500 | $120,100 |
| Accounts payable | $ 12,370 | $ 31,100 |
| Common stock | 75,000 | 69,000 |
| 23,130 | 20,000 | |
| Total | $110,500 | $120,100 |
Wiemers’s 2017 income statement included net sales of $100,000, cost of goods sold of $60,000, and net income of $15,000.
Instructions
Compute the following ratios for 2017.
(a)
(b) Acid-test ratio.
(c) Accounts receivable turnover.
(d) Inventory turnover.
(e) Profit margin.
(f) Asset turnover
(g) Return on assets.
(h) Return on common stockholders’ equity.
(i) Debt to assets ratio.
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Mulder Corporation's comparative balance sheets are presented below:
MULDER CORPORATION
Balance Sheets
December 31
2017 2016
Cash $10,300 $3,900
Accounts receivable 6,200 14,400
Inventory 11,000 8,000
Land 32,000 28,000
Buildings 74,000 74,000
Accumulated depreciation - buildings (15,000) (12,000)
Total $118,500 $116,300
Accounts payable $17,370 $31,100
Common stock ($5 par) 60,000 60,000
Retained Earnings 41,130 25,200
Total $118,500 $116,300
Mulder's 2017 income statement included net sales of $140,000, cost of goods sold of $80,000 and net income of $20,000.
Compute the current ratio for 2017 of Mulder Corporation.
Mulder Corporation's comparative balance sheets for year end at December 31, 2017 are presented below:
2017 2016
Cash $10,300 $3,900
Accounts receivable 6,200 14,400
Inventory 11,000 8,000
Land 32,000 28,000
Buildings 74,000 74,000
Accumulated depreciation - buildings (15,000) (12,000)
Total $118,500 $116,300
Accounts payable $17,370 31,100
Common stock ($5 par) 60,000 60,000
Retained earnings 41,130 25,200
Total $118,500 $116,300
Mulder's 2017 income statement included net sales of $140,000, cost of goods sold of $80,000 and net income of $20,000.
Compute the inventory turnover and days in inventory ratio for 2017.
Wiemers Corporation’s comparative balance sheets are presented below.
WIEMERS CORPORATIONBalance SheetsDecember 31
2017
2016
Cash
$ 3,400
$ 4,000
Accounts receivable (net)
21,700
23,400
Inventory
10,200
7,500
Land
20,100
25,600
Buildings
69,700
69,700
Accumulated depreciation—buildings
(15,500
)
(10,700
)
Total
$109,600
$119,500
Accounts payable
$ 12,000
$ 31,400
Common stock
75,600
69,200
Retained earnings
22,000
18,900
Total
$109,600
$119,500
Wiemers’s 2017 income statement included net sales of $107,000, cost of goods sold of $59,700, and net income of $15,100.Compute the following ratios for 2017. (Round Debt to assets ratio to 1 decimal place, e.g. 1.6, or 1.6% and all other answers to 2 decimal places, e.g. 1.64, or 1.64% .)
(a)
Current ratio
enter your answer rounded to 2 decimal places
:1
(b)
Acid-test ratio…
Chapter 14 Solutions
Managerial Accounting: Tools for Business Decision Making
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