Assets

Current Assets:

Cash..............................................................$6,500

AR..................................................................35,000

Merchandise inventory......................................70,000

Prepaid expenses...............................................3,500

Total current assets.........................................115,000

Property and equip..........................................185,000

Total assets....................................................$300,000

Liabilities and Stockholders'Equity

Liabilities:

Current liabilities..............................................$50,000

Bonds payable, 10%..........................................80,000

Total liabilities...................................................130,000

Stockholders' equity:

Common stock, $5 per value.............................30,000

Retained earnings............................................140,000

Total stockholders' equity..................................170,000

Total liabilities and equity.................................$300,000

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Sales................................................................$420,000

Cost of Goods Sold............................................292,500

Gross margin.....................................................127,500

Selling and administrative expenses....................89,500

Net operating income...........................................38,000

Interest expense....................................................8,000

Net income before taxes......................................30,000

Income taxes (30%)...............................................9,000

Net income........................................................$21,000

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Account balances at the beginning of the year were : Accounts receivable, $25,000; and inventory, $60,000. All sales were on account.

REQUIRED:

1. Working capital
2. Current ratio
3. Acid-test ratio
4. Debt-to-equity ratio
5. Times interest earned ratio
6. Average collection period
7. Average sale period
8. Operating cycle