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5.3 Financial Ratios Financial statements for Paulson's Pet Store are shown. Paulson's Pet Store Income Statement For Year Ended December 31, 20-- Revenue from sales:

5.3 Financial Ratios

Financial statements for Paulson's Pet Store are shown.

Paulson's Pet Store Income Statement For Year Ended December 31, 20--
Revenue from sales:
Sales $326,050
Less: Sales returns and allowances 5,360
Net sales $320,690
Cost of goods sold:
Merchandise inventory, January 1, 20-- $29,300
Estimated returns inventory, January 1, 20-- 900 $30,200
Purchases $162,640
Less: Purchases returns and allowances $4,080
Less: Purchases discounts 3,200 7,280
Net purchases $155,360
Add freight-in 1,600
Cost of goods purchased 156,960
Goods available for sale $187,160
Less: Merchandise inventory, December 31, 20-- $24,900
Less: Estimated returns inventory, December 31, 20-- 1,100 26,000
Cost of goods sold 161,160
Gross profit $159,530
Operating expenses:
Wages expense $69,300
Advertising expense 1,300
Supplies expense 800
Phone expense 2,736
Utilities expense 2,864
Insurance expense 1,600
Depreciation expense-building 10,000
Depreciation expense-store equipment 1,800
Miscellaneous expense 600
Total operating expenses 91,000
Income from operations $68,530
Other expenses:
Interest expense 650
Net income $67,880
Paulson's Pet Store Statement of Owners Equity For Year Ended December 31, 20--
B. Paulson, capital, January 1, 20-- $464,920
Add additional investments 40,000
Total investment $504,920
Net income for the year $67,880
Less: Withdrawals for the year 4,900
Increase in capital 62,980
B. Paulson, capital, December 31, 20-- $567,900
Paulson's Pet Store Balance Sheet December 31, 20--
Assets
Current assets:
Cash $23,440
Accounts receivable 59,350
Merchandise inventory 24,900
Estimated returns inventory 1,100
Supplies 2,500
Prepaid insurance 1,800
Total current assets $113,090
Property, plant, and equipment:
Land $90,000
Building $350,000
Less: Accumulated depreciation 20,000 330,000
Store Equipment $120,000
Less: Accumulated depreciation 3,600 116,400 536,400
Total assets $649,490
Liabilities
Current liabilities:
Note payable $2,000
Accounts payable 59,560
Customer refunds payable 1,500
Wages payable 1,100
Sales tax payable 3,430
Total current liabilities $67,590
Long-term liabilities:
Note payable $16,000
Less: Current portion 2,000 14,000
Total liabilities $81,590
Owner's Equity
B. Paulson, capital 567,900
Total liabilities and owner's equity $649,490

All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was $10,100.

Required:

Compute the financial ratios. Round answers to one decimal place.

Current ratio _______to 1

Quick ratio ________to 1

Working capital $_______

Return on owner's equity ______%

Accounts receivable turnover _______

Average number of days to collect receivables_______ days

Inventory turnover _____

Average number of days to sell inventory________ days

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