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Given the data below, reconstruct the balance sheet and the income statement of Regodos Pearls for the year 2017: Regodos Pearls Balance Sheet December 31,

  1. Given the data below, reconstruct the balance sheet and the income statement of Regodos Pearls for the year 2017:

Regodos Pearls

Balance Sheet

December 31, 2017

ASSETS

Current Assets:
Cash ?
Marketable Securities 50,000
Accounts Receivable, net ?
Inventories ? ?
Property & Equipment:
Plant & Equipment, net ?
TOTAL ASSETS ?

LIABILITIES & STOCKHOLDERS EQUITY

Current Liabilities ?
Long Term Liabilities:
Bonds Payable, 12.5% ?
TOTAL LIABILITIES ?
Stockholders' Equity:
Ordinary Share 500,000
Retained Earnings 300,000 800,000
TOTAL LIABILITIES & STOCKHOLDERS EQUITY ?

Regodos Pearls

Income Statement

For the year ended December 31, 2017

Net Sales ?
Cost of Goods Sold ?
Gross Margin on Sales 525,000
Operating Expenses ?
Operating Income ?
Other Expense: Interest Expense ?
Net Income before Taxes ?
Income Tax (35% Tax Rate) ?
NET INCOME ?

Additional Data:

  1. Operating expenses were 15% of net sales.
  2. Acid test ratio was 1.3:1.
  3. Times interest earned was 6 times.
  4. Gross margin was 35% of net sales.
  5. The age of receivables was 36 days.
  6. The beginning accounts receivable was Php 160,000. Use 360 day year.
  7. Inventory turnover was 4 times. The beginning inventory amounted to Php 250,000.
  8. Total debt to stockholders' equity was 0.08:1.

Compute the following requirements using the given formula:

  1. Net Sales =(Gross margin/gross margin ratio)
  2. Cost of sales= (Net Sales x Cost of Sales ratio)
  3. Operating Expenses= (Net Sales x % to Net Sales)
  4. Operating Income = (Net Sales - Cost of Sales - Operating Expenses)
  5. Interest Expense = (Operating Income/Times Interest Earned
  6. Bond Payable = (Interest Expense/Interest Rate)
  7. Receivable Turnover =(360 days/Age in Receivables)
  8. Average Receivables = (Net Credit Sales/Receivable Turnover)
  9. Ending Accounts Receivable = (Average Receivables x 2)
  10. Average Inventory = (Cost of Goods Sold / Inventory Turnover)
  11. Ending Inventory = (Average Inventory x 2)
  12. Total Debt = (Ratio of Total Debt & Stockholders' Equity)
  13. Current Liabilities = (Total Debt - Bonds Payable)
  14. Quick Assets = (Acid Test ratio x Current Liabilities)
  15. Cash = (Quick Assets - Marketable Securities - Accounts Receivable)

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