An incomplete income statement and an incomplete comparative balance sheet of Deines Corporation are presented below.

DEINES CORPORATION

Income Statement

For the Year Ended December 31, 2015

Net sales ..............$11,000,000

Cost of goods sold .......... ?

Gross profit ............ ?

Operating expenses .........1,665,000

Income from operations ........ ?

Other expenses and losses

Interest expense .......... ?

Income before income taxes ..... ?

Income tax expense ........ 560,000

Net income $ ............ ?

Additional information:
1. The accounts receivable turnover for 2015 is 10 times.
2. All sales are on account.
3. The profit margin for 2015 is 14.5%.
4. Return on assets is 22% for 2015.
5. The current ratio on December 31, 2015, is 3.0.
6. The inventory turnover for 2015 is 4.8 times.

Instructions
Compute the missing information given the ratios above. Show computations.

Transcribed Image Text:

DEINES CORPORATION Balance Sheets December 31 Assets 2015 2014 Current assets Cash 450,000 375,000 950,000 1,720,000 3,045,000 3,955,000 S7,000,000 Accounts receivable (net) Inventory Total current assets Plant assets (net) Total assets 4,620,000 Liabilities and Stockholders' Equity Current liabilities Long-term notes payable 2015 2014 825,000 2,800,000 3,625,000 3,000,000 375,000 3,375,000 $7,000,000 Total liabilities Common stock, $1 par Retained earnings 3,000,000 400,000 3,400,000 Total stockholders' equity Total liabilities and stockholders' equity