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 14.7E
Frizell Company has the following comparative balance sheet data.
FRIZELL COMPANY
Balance Sheets
December 31
| 2017 | 2016 | |
| Cash | $ 15,000 | $ 30,000 |
| 70,000 | 60,000 | |
| Inventory | 60,000 | 50,000 |
| Plant assets (net) | 200,000 | 180,000 |
| $345,000 | $320,000 | |
| Accounts payable | $ 50,000 | $ 60,000 |
| Mortgage payable (6%) | 100,000 | 100,000 |
| Common stock, $10 par | 140,000 | 120,000 |
| 55,000 | 40,000 | |
| $345,000 | $320,000 |
Additional information for 2017:
1. Net income was $25,000.
2. Sales on account were $410,000. Sales returns and allowances were $20,000.
3. Cost of goods sold was $198,000.
Instructions
Compute the following ratios at December 31, 2017.
(a)
(b) Acid-test ratio.
(c) Accounts receivable turnover.
(d) Inventory turnover.
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Chapter 14 Solutions
Managerial Accounting: Tools for Business Decision Making
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