FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Chapter 2, Problem 55P
a.
To determine
Calculate the missing balance sheet amounts for the four years.
b.
To determine
Identify the type of accounts that can be included in current assets and in non-current assets.
c.
To determine
Calculate Corporation K’s
d.
To determine
Comment on Corporation K’s liquidity measures associated to the industry.
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1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution.
a. Working Capital
b. Current Ratio
c. Acid Test Ratio
d. Accounts Receivable Turnover Ratio
e. Average Collection Period
f. Inventory Turnover Ratio
g. Average Days in Inventory
h. Number of days in Operating Cycle
i. Debt to Total Assets Ratio
j. Debt to Equity Ratio
k. Times Interest Earned Ratio
l. Gross Profit Ratio
m. Profit Margin Ratio
n. Return on Assets
o. Return on Equity
p. Assets Turnover Ratio
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INCOME STATEMENT
(Figures in 5 millions)
Net sales
Cost of goods sold
Other expenses
Depreciation
Earnings before interest and taxes (EBIT)
Interest expense
Income before tax
Taxes (at 21%)
Net income
Dividends
Assets
Cash and marketable securities
Receivables
Inventories
Other current assets
Total current assets.
BALANCE SHEET
(Figures in $ millions)
Net property, plant, and equipment
Other long-term assets
$ 12,600
3,760
4,127
2,338
$ 2,375
655
Total assets
Liabilities and shareholders' equity
Payables
Short-term debt
$1,720
361
$ 1,359
$816
Other current liabilities
Total current liabilities
Long-term debt and leases
Other long-term liabilities
Shareholders' equity
Total liabilities and shareholders' equity
End of Year Start of Year
$ 152
2,370
208
902
$ 3,632
19,855
3,710
$ 27,197
$83
2,082
157
837
$ 3,159
19,913
4,156
$ 27,228
$ 2,504
1,389
781
$ 4,674
8,512
6,118
7,924
$ 27,228
$ 2,980
1,543
757
$5,280
7,907
6,089
7,921
$ 27,197
Calculate the following…
Calculate the following financial ratios for Phone Corporation: (Use 365 daysin a year. Do not round intermediate calculations. Round your finalanswers to 2 decimal places.)1. Return on Assets (use average balance sheet figures)2. Return on capital (use average balance sheet figures) %3. Days in inventory (use start of year balance sheet figures) %4. Inventory turnover (use start of year balance sheet figures5. Average collection period (use start of year balance sheet figures)6. Operating profit margin %7. Long term debt ratio (use end of year balance sheet figures)8. Total Debt ratio (use end of year balance sheet figures)
Chapter 2 Solutions
FINANCIAL ACCOUNTING
Ch. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MCCh. 2 - Prob. 4MCCh. 2 - Prob. 5MCCh. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - Prob. 3QCh. 2 - Prob. 4QCh. 2 - Prob. 5Q
Ch. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14MECh. 2 - Prob. 15MECh. 2 - Prob. 16MECh. 2 - Prob. 17MECh. 2 - Prob. 18MECh. 2 - Prob. 19MECh. 2 - Prob. 20MECh. 2 - Prob. 21MECh. 2 - Prob. 22MECh. 2 - Prob. 23MECh. 2 - Prob. 24MECh. 2 - Prob. 25MECh. 2 - Prob. 26MECh. 2 - Prob. 27MECh. 2 - Prob. 28MECh. 2 - Prob. 29MECh. 2 - Prob. 30MECh. 2 - Prob. 31MECh. 2 - Prob. 32MECh. 2 - Prob. 33MECh. 2 - Prob. 34ECh. 2 - Prob. 35ECh. 2 - Prob. 36ECh. 2 - Prob. 37ECh. 2 - Prob. 38ECh. 2 - Prob. 39ECh. 2 - Prob. 40ECh. 2 - Prob. 41ECh. 2 - Prob. 42ECh. 2 - Prob. 43ECh. 2 - Prob. 44ECh. 2 - Prob. 45ECh. 2 - Prob. 46ECh. 2 - Prob. 47ECh. 2 - Prob. 48ECh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Prob. 54PCh. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Prob. 61PCh. 2 - Prob. 62PCh. 2 - Prob. 63PCh. 2 - Prob. 64PCh. 2 - Prob. 65PCh. 2 - Prob. 66PCh. 2 - Prob. 67PCh. 2 - Prob. 68PCh. 2 - Prob. 69PCh. 2 - Prob. 70PCh. 2 - Prob. 71CPCh. 2 - Prob. 72CP
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