Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Financial statements for Allendale Company follow: ALLENDALE COMPANY Balance Sheets As of December 31 2019 2018 Assets Current assets Cash $ 40,000 $ 36,000 Marketable

Financial statements for Allendale Company follow:

ALLENDALE COMPANY
Balance Sheets As of December 31
2019 2018
Assets
Current assets
Cash $ 40,000 $ 36,000
Marketable securities 20,000 6,000
Accounts receivable (net) 54,000 46,000
Inventories 135,000 143,000
Prepaid items 25,000 10,000
Total current assets 274,000 241,000
Investments 27,000 20,000
Plant (net) 270,000 255,000
Land 29,000 24,000
Total assets $ 600,000 $ 540,000
Liabilities and Stockholders Equity
Liabilities
Current liabilities
Notes payable $ 17,000 $ 6,000
Accounts payable 113,800 100,000
Salaries payable 21,000 15,000
Total current liabilities 151,800 121,000
Noncurrent liabilities
Bonds payable 100,000 100,000
Other 32,000 27,000
Total noncurrent liabilities 132,000 127,000
Total liabilities 283,800 248,000
Stockholders equity
Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued) 80,000 80,000
Common stock (no par; 50,000 shares authorized; 10,000 shares issued) 80,000 80,000
Retained earnings 156,200 132,000
Total stockholders equity 316,200 292,000
Total liabilities and stockholders equity $ 600,000 $ 540,000

ALLENDALE COMPANY
Statements of Income and Retained Earnings For the Years Ended December 31
2019 2018
Revenues
Sales (net) $ 230,000 $ 210,000
Other revenues 8,000 5,000
Total revenues 238,000 215,000
Expenses
Cost of goods sold 120,000 103,000
Selling, general, and administrative 55,000 50,000
Interest expense 8,000 7,200
Income tax expense 23,000 22,000
Total expenses 206,000 182,200
Net earnings (net income) 32,000 32,800
Retained earnings, January 1 132,000 107,000
Less: Preferred stock dividends 3,200 3,200
Common stock dividends 4,600 4,600
Retained earnings, December 31 $ 156,200 $ 132,000

Required

Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet.

Working capital.

Current ratio. (Round your answers to 2 decimal places.)

Quick ratio. (Round your answers to 2 decimal places.)

Receivables turnover (beginning receivables at January 1, 2018, were $47,000). (Round your answers to 2 decimal places.)

Average days to collect accounts receivable. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.)

Inventory turnover (beginning inventory at January 1, 2018, was $140,000). (Round your answers to 2 decimal places.)

Number of days to sell inventory. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.)

Debt to assets ratio. (Round your answers to the nearest whole percent.)

Debt to equity ratio. (Round your answers to 2 decimal places.)

Number of times interest was earned. (Round your answers to 2 decimal places.)

Plant assets to long-term debt. (Round your answers to 2 decimal places.)

Net margin. (Round your answers to 2 decimal places.)

Turnover of assets. (Round your answers to 2 decimal places.)

Return on investment. (Round your answers to 2 decimal places.)

Return on equity. (Round your answers to 2 decimal places.)

Earnings per share. (Round your answers to 2 decimal places.)

Book value per share of common stock. (Round your answers to 2 decimal places.)

Price-earnings ratio (market price per share: 2018, $11.75; 2019, $12.50). (Round your intermediate calculations and final answer to 2 decimal places.)

Dividend yield on common stock. (Round your answers to 2 decimal places.)

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

Principles Of Cost Accounting

Authors: Vanderbeck

13th Edition

0324191693, 978-0324191691

More Books

Students also viewed these Accounting questions

Question

Appreciate the services that consultants provide

Answered: 1 week ago

Question

Know about the different kinds of consultants

Answered: 1 week ago