Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Connie General furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow. Connie General Comparative Balance Sheet As of December 31

Connie General furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow.

Connie General Comparative Balance Sheet As of December 31
2020 2019
Assets
Current assets
Cash $376,000 $417,500
Accounts receivable, net 1,055,000 776,400
Inventory 731,000 681,050
Other current assets 381,400 247,050
Total current assets 2,543,400 2,122,000
Property, plant, & equipment, net 8,720,425 8,439,980
Total assets $11,263,825 $10,561,980
Liabilities and Stockholders' Equity
Current liabilities $3,203,000 $2,846,100
Long-term debt 3,702,700 3,892,700
Total liabilities 6,905,700 6,738,800
Preferred stock, $5 par value 58,900 58,900
Common stock, $0.25 par value 104,600 103,800
Retained earnings 4,194,625 3,660,480
Total stockholders' equity 4,358,125 3,823,180
Total liabilities and stockholders' equity $11,263,825 $10,561,980
Connie General Comparative Income Statement and Statement of Retained Earnings For the Year
2020 2019
Sales revenue (all on account) $10,177,200 $9,613,900
Cost of goods sold 5,612,200 5,298,750
Gross profit 4,565,000 4,315,150
Operating expenses 2,840,250 2,634,150
Net operating income 1,724,750 1,681,000
Interest expense 300,400 308,600
Net income before taxes 1,424,350 1,372,400
Income taxes (30%) 427,305 411,720
Net income $997,045 $960,680
Dividends paid
Preferred dividends 29,500 29,550
Common dividends 433,400 413,050
Total dividends paid 462,900 442,600
Net income retained 534,145 518,080
Retained earnings, beginning of year 3,660,480 3,142,400
Retained earnings, end of year $4,194,625 $3,660,480

(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

$

-659,000
b. Current ratio 0.79
c. Acid-test ratio 0.45
d. Accounts receivable turnover 11.11 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.)

b. Inventory turnover

times

r

(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

days

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fraud Examination

Authors: W. Steve Albrecht

6th Edition

1337619671, 978-1337619677

More Books

Students also viewed these Accounting questions

Question

=+a) What assumptions and/or conditions are violated by this model?

Answered: 1 week ago

Question

1. To gain knowledge about the way information is stored in memory.

Answered: 1 week ago