ACC-650 TOPIC 8 ASSIGNMENT Question 5 Cullumber Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow.

Cullumber Medical Comparative Balance Sheet As of December 31 2020 2019 Assets Current assets Cash $397,000 $417,400 Accounts receivable, net 1,089,000 776,400 Inventory 733,000 681,050 Other current assets 381,400 247,100 Total current assets 2,600,400 2,121,950 Property, plant, & equipment, net 8,616,245 8,439,830 Total assets $11,216,645 $10,561,780 Liabilities and Stockholders' Equity Current liabilities $3,156,000 $2,846,050 Long-term debt 3,702,600 3,892,600 Total liabilities 6,858,600 6,738,650 Preferred stock, $5 par value 58,900 58,900 Common stock, $0.25 par value 104,650 103,850 Retained earnings 4,194,495 3,660,380 Total stockholders' equity 4,358,045 3,823,130 Total liabilities and stockholders' equity $11,216,645 $10,561,780

Cullumber Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2020 2019 Sales revenue (all on account) $10,177,300 $9,613,950 Cost of goods sold 5,612,300 5,298,700 Gross profit 4,565,000 4,315,250 Operating expenses 2,840,250 2,634,200 Net operating income 1,724,750 1,681,050 Interest expense 300,300 308,650 Net income before taxes 1,424,450 1,372,400 Income taxes (30%) 427,335 411,720 Net income $997,115 $960,680 Dividends paid Preferred dividends 29,550 29,500 Common dividends 433,450 413,100 Total dividends paid 463,000 442,600 Net income retained 534,115 518,080 Retained earnings, beginning of year 3,660,380 3,142,300 Retained earnings, end of year $4,194,495 $3,660,380 (a-d) Calculate the following liquidity ratios for 2020. (If working capital is negative then enter with a negative sign preceding the number or parentheses, e.g. -15,000 or (15,000). Round all answers except working capital to 2 decimal places, e.g. 2.55.)

a. Working capital $

b. Current ratio

c. Acid-test ratio

d. Accounts receivable turnover times (e-f) Calculate the following liquidity ratios for 2020. (Round average collection period to 0 decimal place, e.g. 25 and inventory turnover ratio to 2 decimal places, e.g. 5.12. Use 365 days for calculation.)

a. Average collection period - days b. Inventory turnover - times (g) Calculate average days to sell inventory for 2020. (Round answer to 0 decimal places, e.g. 25. Use 365 days for calculation.)

Average days to sell inventory Type your answer here - days