14. The financial statements of Jones Company appear below:

JONES COMPANY

Comparative Balance Sheet

December 31,

Assets 2015 2014

Cash................................................................................................... $ 20,000 $ 40,000

Short-term investments..................................................................... 20,000 60,000

Accounts receivable (net).................................................................. 40,000 30,000

Inventory............................................................................................ 60,000 70,000

Property, plant and equipment (net).................................................. 260,000 300,000

Total assets ................................................................................. $400,000 $500,000

Liabilities and stockholders' equity

Accounts payable.............................................................................. $ 20,000 $ 30,000

Short-term notes payable.................................................................. 40,000 90,000

Bonds payable................................................................................... 80,000 160,000

Common stock.................................................................................. 150,000 150,000

Retained earnings.............................................................................. 110,000 70,000

Total liabilities and stockholders' equity....................................... $400,000 $500,000

JONES COMPANY

Income Statement

For the Year Ended December 31, 2015

Net sales............................................................................................ $400,000

Cost of goods sold............................................................................. 250,000

Gross profit........................................................................................ 150,000

Expenses

Operating expenses..................................................................... $42,000

Interest expense.......................................................................... 18,000

Total expenses....................................................................... 60,000

Income before income taxes............................................................. 90,000

Income tax expense.......................................................................... 27,000

Net income........................................................................................ $ 63,000

Additional information:

a. Cash dividends of $23,000 were declared and paid in 2015.

b. Weighted-average number of shares of common stock outstanding during 2015 was 30,000 shares.

c. Market value of common stock on December 31, 2015, was $21 per share.

Instructions

Using the financial statements and additional information, compute the following ratios for Jones Company for 2015. Show all computations.

Computations

Acid-test ratio _________.

Accounts receivable turnover _________.

Profit margin _________.

Return on assets _________.

(Check Figures: Acid-test Ratio = 1.3, Accounts Receivable Turnover = 11.4 times, Profit Margin = 15.8%, Return on Assets = 14%)