Incomplete financial statements for ABC Company are as follows: Income Statement For the Year Ended December 31,
Question:
Income Statement
For the Year Ended December 31, 2012
Sales .............................................................................. $1,800,000
Less cost of goods sold ................................................................ A
Gross margin .................................................................... $900,000
Less operating expenses .............................................................. B
Net operating income .................................................................... C
Less interest expense ........................................................ $45,000
Net income before taxes .............................................................. D
Less income taxes (40%) ............................................................... E
Net income ..................................................................................... F
The following additional information is available about the company:
(a) Selected financial ratios computed from the preceding statements are given as follows:
- Current ratio 2.40 to 1
- Quick (acidtest) ratio 1.12 to 1
- Average collection period 24.3333 days
- Inventory turnover 6.0 times
- Debttoequity ratio 0.875 to 1
- Earnings per share $4.05
- Return on total assets 14%
(b) All sales during the year were on account.
(c) The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change throughout the year.
(d) There were no issues or retirements of common stock during the year. Required: Compute the missing amounts on the companys financial statements. Income Statement:
Balance Sheet:
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Financial Ratios
The term is enough to curl one's hair, conjuring up those complex problems we encountered in high school math that left many of us babbling and frustrated. But when it comes to investing, that need not be the case. In fact, there are ratios that,...
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