Question
Balance sheet December 31 Assets2007 2006 Cash $25,000 $40,000 Short term investments15,00060,000 Accounts receivable50,000 30,000 Inventory50,000 70,000 Property, plant and equipment (net) 160,000 200,000 Total
Balance sheet
December 31
Assets2007 2006
Cash $25,000 $40,000
Short term investments15,00060,000
Accounts receivable50,000 30,000
Inventory50,000 70,000
Property, plant and equipment (net) 160,000 200,000
Total assets$300,000 $400,000
Liabilities and stockholders equity
Accounts payable $20,000 $30,000
Short term notes payable40,00090,000
Bonds payable 80,000160,000
Common stock 60,000 45,000
Retained earnings 100,000 75,000
Total liabilities and stockholders equity $300,000$400,000
Income statement (for the year ended December 31, 2007)
Net sales $360,000
Cost of goods sold 184,000
Gross profit176,000
Expenses
Selling expenses30,000
Administrative expenses59,000
Total expenses 89,000
Income before interest expense and taxes87,000
Interest expense 12,000
Income before income taxes 75,000
Income tax expense30,000
Net income $45,000
Additional information
- 120,000 shares were outstanding in 2007:90,000 shares were outstanding in 2006
- Market value of common stock on December 31, 2007 was $12 per share.
- Inventory turnover (#):
- Inventory turnover in days
- Accounts receivable turnover (#)
- Accounts receivable turnover in days
- Operating cycle:
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