Question
Following is a comparative balance sheet for Summer Days Corporation: Summer Days Corporation Comparative Balance Sheet December 31, 2019 and 2018 20192018 Current assets: Cash$
Following is a comparative balance sheet for Summer Days Corporation:
Summer Days Corporation
Comparative Balance Sheet
December 31, 2019 and 2018
20192018
Current assets:
Cash$ 150,000$ 90,000
Short-term investments90,00080,000
Accounts receivable, net350,000220,000
Inventory400,000430,000
Prepaid expenses30,00030,000
Total current assets$1,020,000$ 850,000
Property, plant, and equipment, net750,000500,000
Other assets280,000300,000
Total assets$2,050,000$1,650,000
Current liabilities:
Short-term notes payable$650,000$670,000
Accounts payable200,000225,000
Total current liabilities$850,000$895,000
Non-current debt180,000220,000
Total liabilities$1,030,000$1,115,000
Shareholders' equity:
Common shares$500,000$500,000
Retained earnings410,00035,000
Total shareholders' equity$ 910,000$535,000
Total liabilities and shareholders' equity$2,140,000$1,650,000
Notes: Net sales (all on credit) and cost of goods sold for the year ended December 31, 2019, were $2,100,000 and $1,500,000, respectively. The number of common shares outstanding has been 50,000 since the company began operations.
Required:
Calculate the following ratios for the year ended December 31, 2019:
a. current ratio
b. acid-test ratio
c. inventory turnover
d. accounts receivable turnover
e. debt ratio
f. book value per common share of stock
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