BETA MANUFACTURING COMPANY, Balance Sheet

Cash and Marketable Securities $80,000

Accounts Receivable 1,500,000

Inventories (lower of cost or market) 257,800

Prepaid Expenses 20,000

Accumulated Tax Prepayments 15,000

Current Assets 1,872,800

Fixed Assets at Cost 1,245,000

less: Accumulated Depreciation 670,000

Net Fixed Assets 574,500

Investments, Long-Term 233,700

Goodwill 1,000,000

Total Assets $3,681,000

Bank Loans and Notes Payable $90,000

Accounts Payable 25,000

Accrued Taxes 45,000

Other Accrued Liabilities 190,000

Current Liabilities 350,000

Long-Term Debt 900,000

Common Stock, $1 par value 250,500

Paid-in Capital 180,000

Retained Earnings 2,000,500

Total Net Worth 2,431,000

Total Liabilities and Net Worth $3,681,000

BETA MANUFACTURING COMPANY, Income statement

Net Sales $2,800,800

less: Cost of Goods Sold 1,800,000

Gross Profit 1,000,800

Selling, General and Administrative Expense 550,000

Depreciation 111,600

Interest Expense 250,000

Earnings Before Taxes 89,200

Income Taxes 30,300

Earnings After Tax 58,900

Cash Dividends 15,000

Increase in Retained Earnings $43,900

12) According to the statements in Table 6-2, BETA's gross profit margin was ________.

A) 16.3 percent B) 12.0 percent C) 19.8 percent D) 35.7 percent

13) According to the statements in Table 6-2, BETA's debt-to-equity ratio was ________.

A) 1.03 B) 1.32 C) 0.51 D) 0.61

14) According to the statements in Table 6-2, what was BETA's inventory turnover in days (rounded

to the nearest day)? Use a 365-day year. A) 52 days B) 30 days C) 67 days D) 83 days

15) According to the statements in Table 6-2, BETA's return on equity was ________.

A) 2.42 percent B) 7.59 percent C) 2.20 percent D) 4.99 percent