3) Condensed financial data of Neptune Co. appears below.

Neptune Co.

Comparative Balance Sheet

December 31

2020 2019

Assets

Current Assets:

Cash $71,000 $45,000

Accounts Receivables (net) 44,000 62,000

Short-Term Investment 25,000 18,000

Inventories 144,450 124,000

Supplies 15,280 21,000ACT201 Final Examination

Summer 2021

Instructor: Ani Total Marks: 50

________ _______

Total Current Assets 299,730 270,000

Property Plant & Equipment

Land 105,000 130,000

Equipment 173,000 120,000

Building 200,000 200,000

Total Assets

Liabilities & Stockholders Equity

Current Liabilities:

Accounts Payable $96,730 $82,000

Salaries & Wages Payable 19,000 15,000

________ _______

Total Current Liabilities 115,730 97,000_

Long-Term Liabilities:

Notes Payable $260,000 $300,000

________ ______

Total Liabilities 375,730 397,000

Stockholders Equity:

Common Stock ($10 par) $200,000 $160,000

Retained Earnings 202,000 163,000

_______ _______

Total Stockholders Equity 402,000 323,000_

Total Liabilities and Stockholders Equity

Neptune Co.

Income Statement

For the year ended December 31, 2020

Net Sales (90% on account) $549,000

Less:

Cost of Goods Sold 348,000

Operating Expenses excluding depreciation 84,000

Depreciation Expense 30,500

Interest Expense 6,000

Income Taxes 14,000

Gain on Sale of Plant Assets 5,500

Net Income

720,000

777,730

$720,000

$777,730

$61,000ACT201 Final Examination

Summer 2021

Instructor: Ani Total Marks: 50

Additional Information:

1.

Equipment was purchased for $100,000 cash. In addition, equipment costing $47,000 was

sold for $22,000 cash.

2.

Land was sold for cash at book value.

3.

Notes matured and paid off at face value of cash.

4.

Cash dividend was paid in the year 2020.

5.

Common Stock recently sold at $18 per share.

Instructions:

a)

Prepare a statement of cash flows using the indirect method. (15)

b)

Compute the following ratios for 2020. (9)

I.

Price Earning Ratio

II.

Average Collection Period

III.

Time Interest Earned