Question
Financial ratios computed for Whittaker Inc. include the following: Current ratio 2.1 to 1 Acid-test ratio 1.5 to 1 Debt/equity ratio 2.0 to 1 Inventory
Financial ratios computed for Whittaker Inc. include the following: Current ratio 2.1 to 1 Acid-test ratio 1.5 to 1 Debt/equity ratio 2.0 to 1 Inventory turnover 4.0 times Accounts receivable turnover 6.5 times Times interest earned 5.40 times Gross profit ratio 20 % Return on investment 11.64 % Earnings per share $ 7.99
All sales during the year were made on account. Cash collections during the year exceeded sales by $13,000, and no uncollectible accounts were written off. The balance of the accounts receivable account was $57,000 on January 1, 2020. No common stock was issued during the year. Dividends declared and paid during the year were $6,602. The balance of the inventory account was $71,300 on January 1, 2020. Interest expense on the income statement relates to the 12% bonds payable; $10,000 of these bonds were issued on May 1, 2020; the remaining amount of bonds payable were outstanding throughout the year. All bonds were issued at face amount. Required: a. Complete the income statement and balance sheet for Whittaker Inc.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started