Question
Financial Ratios Financial statements for Paulson's Pet Store are shown. Paulson's Pet Store Income Statement For Year Ended December 31, 20-- Revenue from sales:Sales$326,040Less: Sales
Financial Ratios
Financial statements for Paulson's Pet Store are shown.
Paulson's Pet Store
Income Statement
For Year Ended December 31, 20--Revenue from sales:Sales$326,040Less: Sales returns and allowances5,360Net sales$320,680Cost of goods sold:Merchandise inventory, January 1, 20--$59,200Estimated returns inventory, January 1, 20--800$60,000Purchases$162,640Less: Purchases returns and allowances$4,080Less: Purchases discounts3,2007,280Net purchases$155,360Add freight-in1,600Cost of goods purchased156,960Goods available for sale$216,960Less: Merchandise inventory, December 31, 20--$64,800Less: Estimated returns inventory, December 31, 20--1,20066,000Cost of goods sold150,960Gross profit$169,720Operating expenses:Wages expense$69,400Advertising expense1,200Supplies expense800Phone expense2,736Utilities expense2,864Insurance expense1,600Depreciation expense-building10,000Depreciation expense-store equipment1,800Miscellaneous expense600Total operating expenses91,000Income from operations$78,720Other expenses:Interest expense640Net income$78,080
Paulson's Pet Store
Statement of Owner's Equity
For Year Ended December 31, 20--B. Paulson, capital, January 1, 20--$504,320Add additional investments30,000Total investment$534,320Net income for the year$78,080Less: Withdrawals for the year4,800Increase in capital73,280B. Paulson, capital, December 31, 20--$607,600
Paulson's Pet Store
Balance Sheet
December 31, 20--AssetsCurrent assets:Cash$23,440Accounts receivable9,360Merchandise inventory64,800Estimated returns inventory1,200Supplies2,400Prepaid insurance1,800Total current assets$103,000Property, plant, and equipment:Land$90,000Building$350,000Less: Accumulated depreciation20,000330,000Store Equipment$120,000Less: Accumulated depreciation3,600116,400536,400Total assets$639,400LiabilitiesCurrent liabilities:Note payable$2,000Accounts payable9,560Customer refunds payable1,600Wages payable1,200Sales tax payable3,440Total current liabilities$17,800Long-term liabilities:Note payable$16,000Less: Current portion2,00014,000Total liabilities$31,800Owner's EquityB. Paulson, capital607,600Total liabilities and owner's equity$639,400
All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was $10,200.
Required:
Compute the financial ratios. Round answers to one decimal place.
Financial RatiosCurrent ratiofill in the blank 1
to 1Quick ratiofill in the blank 2
to 1Working capital$
fill in the blank 3
Return on owner's equityfill in the blank 4
%Accounts receivable turnoverfill in the blank 5
Average number of days to collect receivablesfill in the blank 6
daysInventory turnoverfill in the blank 7
Average number of days to sell inventoryfill in the blank 8
days
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