18-2

Answer 'a' through 'j'

P18-2 The comparative statements of Larker Tool Company are presented below LARKER TOOL COMPANY Income Statement For the Years Ended December 31 2013 2012 Net sales $1,818,5 $1,750,5 Cost of goods sold 1,011,50 996,000 0 Gross profit Selling and administrative expense Income from operations Other expenses and losses Interest expense Income before income taxes Income tax expense Net income 807,000754,500 516,000 479,000 291,000 275,500 18,00014,000 273,000 261,500 81,000 77,000 $ 192,0 184,5 LARKER TOOL COMPANY Balance Sheets December 31 Assets 2013 2012 Current assets Cash $60,10 $64,20 0 69,000 50,000 117,80102,80 0 Short-term investments Accounts receivable (net) 0 Inventory 123,00 115,50 0 0 Total current assets 369,90332,50 0 0 Plant assets (net) 600,30 520,30 0 Total assets $970,2 $852,8 Liabilities and Stockholders' Equity Current liabilities Accounts payable $160,0 $145,4 Income taxes payable 43,500 42,000 Total current liabilities 203,50 187,40 0 0 Bonds payable 200,00 200,00 0 0 Total liabilities 403,50 387,40 0 0 Stockholders' equity Common stock ($5 par) 280,00 300,00 0 Retained earnings 286,70 165,40 0 0 Total stockholders' equity 566,70 465,40 0 Total liabilities and stockholders' equity $970,2 $852,8 All sales were on account. Instructions Compute the following ratios for 2013. (Weighted-average common shares in 2013 were 57,000.) (a)Earnings per share (b)Return on common stockholders' equity. (c)Return on assets (d)Current (e)Acid-test (f)Receivables turnover (g)Inventory turnover (h)Times interest earned (i)Asset turnover (j)Debt to total assets