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Exercise 18-09 Lendell Company has these comparative balance sheet data: Lendell Company Balance Sheets December 31 2020 2019 Cash $ 14,000 $ 29,000 Accounts receivable
Exercise 18-09
Lendell Company has these comparative balance sheet data:
Lendell Company Balance Sheets December 31 | ||||||
2020 | 2019 | |||||
Cash | $ 14,000 | $ 29,000 | ||||
Accounts receivable (net) | 69,000 | 59,000 | ||||
Inventory | 59,000 | 49,000 | ||||
Plant assets (net) | 195,000 | 175,000 | ||||
$337,000 | $312,000 | |||||
Accounts payable | $50,000 | $59,000 | ||||
Mortgage payable (15%) | 100,000 | 100,000 | ||||
Common stock, $10 par | 135,000 | 115,000 | ||||
Retained earnings | 52,000 | 38,000 | ||||
$337,000 | $312,000 |
Additional information for 2020:
1. | Net income was $24,000. | |
2. | Sales on account were $403,000. Sales returns and allowances amounted to $19,000. | |
3. | Cost of goods sold was $194,400. | |
4. | Net cash provided by operating activities was $44,000. | |
5. | Capital expenditures were $27,000, and cash dividends were $8,500. |
Compute the following ratios at December 31, 2020. (Round current ratio to 2 decimal places, e.g. 1.67. Round Accounts receivable turnover, Average collection period, Inventory turnover and Days in inventory to 1 decimal place, e.g. 1.6.)
(a) | Current ratio | 2.84 | :1 | ||
(b) | Accounts receivable turnover | times | |||
(c) | Average collection period | days | |||
(d) | Inventory turnover | 3.6 | times | ||
(e) | Days in inventory | 101.4 | days | ||
(f) | Free cash flow | $ 8500 |
Please do (b) and (c) with the steps.
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