Financial Ratios 1. Prepare the following financial ratios. If required, round your answers to two decimal places. Assume 365 days per year. For return on owner's equity, enter as a percent but do not include percent sign. Paulson's Pet Store completed the work sheet below for the year ended December 31, 20-- Owner's equity as of January 1, 20--, was $21,900 and the Accounts Receivable balance on January 1, 20-- was $3,800. The current portion of Mortgage Payable is $500. All sales are credit sales. Paulson's Pet Store Work Sheet For Year Ended December 31, 20 -- TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT 15,860 15,860 2,340 2,340 ACCOUNT TITLE Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Equipment Accum. Depr.-Equipment Accounts Payable 15,860 2,340 15,000 800 16,500 (b) 16,500 (a) 15,000 (c) 200 (d) 150 16,500 600 450 600 450 5,000 5,000 5,000 450 (e) 450 900 4,890 4,890 900 4,890 300 Wages Payable (9) 300 300 () 300 300 300 Wages Payable Sales Tax Payable 860 860 860 Mortgage Payable 4,000 4,000 23,900 4,000 23,900 23,900 B. Paulson, Capital B. Paulson, Drawing 1,200 1,200 1,200 15,000 Income Summary (a) 15,000 (b) 16,500 16,500 15,000 16,500 71,510 Sales 71,510 71,510 Sales Returns and Allowances Purchases Purchases Returns and Allowances 1,340 40,660 1,340 40,660 1,340 40,660 1,020 800 1,020 800 1,020 800 Purchases Discounts Freight-In 400 400 (1) 300 22,600 Wages Expense Advertising Expense Supplies Expense 22,300 300 300 400 22,600 300 200 684 (c) 200 Phone Expense 684 716 Utilities Expense 200 684 716 150 450 716 Insurance Expense 150 (d) 150 (e) 450 450 Depr. Expense-Equipment Miscellaneous Expense 150 150 150 300 Advertising expense Supplies Expense (c) 200 Phone Expense 684 716 200 684 716 150 Utilities Expense Insurance Expense Depr. Expense-Equipment Miscellaneous Expense Interest Expense (d) 150 (e) 450 450 300 200 684 716 150 450 150 80 1 24,68082,730 7,100 89,830 150 80 150 80 124,680 107,430 107,430 32,600 32,600 89,830 41,950 Net Income 34,850 7,100 41,950 89,830 41,950 Required: Generalized Statement 1. Prepare the following financial ratios. If required, round your answers to two decimal places. Assume 365 days per year. For return on owner's equity, enter as a percent but do not include percent sign Generalized Statement 1. Prepare the following financial ratios. If required, round your answers to two decimal places. Assume 365 days per year. For return on owner's equity, enter as a percent but do not include percent sign. Paulson's Pet Store December 31, 20- Working capital: Current ratio: Quick ratio: Return on owner's equity: Accounts receivable turnover: Hlllll Average number of days to collect receivables: Inventory turnover: Average number of days to sell inventory
