Question
Hello, Please help, again. This is second time ive posted this question. ill attach images and previous answers as well. Financial Ratios Financial statements for
Hello,
Please help, again. This is second time ive posted this question. ill attach images and previous answers as well.
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 | $326,030 | |||
Less: Sales returns and allowances | 5,360 | |||
Net sales | $320,670 | |||
Cost of goods sold: | ||||
Merchandise inventory, January 1, 20-- | $29,200 | |||
Estimated returns inventory, January 1, 20-- | 700 | $29,900 | ||
Purchases | $162,650 | |||
Less: Purchases returns and allowances | $4,080 | |||
Less: Purchases discounts | 3,200 | 7,280 | ||
Net purchases | $155,370 | |||
Add freight-in | 1,600 | |||
Cost of goods purchased | 156,970 | |||
Goods available for sale | $186,870 | |||
Less: Merchandise inventory, December 31, 20-- | $24,800 | |||
Less: Estimated returns inventory, December 31, 20-- | 1,200 | 26,000 | ||
Cost of goods sold | 160,870 | |||
Gross profit | $159,800 | |||
Operating expenses: | ||||
Wages expense | $69,500 | |||
Advertising expense | 1,200 | |||
Supplies expense | 700 | |||
Phone expense | 2,736 | |||
Utilities expense | 2,864 | |||
Insurance expense | 1,600 | |||
Depreciation expense-building | 10,000 | |||
Depreciation expense-store equipment | 1,800 | |||
Miscellaneous expense | 600 | |||
Total operating expenses | 91,000 | |||
Income from operations | $68,800 | |||
Other expenses: | ||||
Interest expense | 640 | |||
Net income | $68,160 |
Paulson's Pet Store Statement of Owners Equity For Year Ended December 31, 20-- | ||
B. Paulson, capital, January 1, 20-- | $484,020 | |
Add additional investments | 20,000 | |
Total investment | $504,020 | |
Net income for the year | $68,160 | |
Less: Withdrawals for the year | 4,800 | |
Increase in capital | 63,360 | |
B. Paulson, capital, December 31, 20-- | $567,380 |
Paulson's Pet Store Balance Sheet December 31, 20-- | |||
Assets | |||
Current assets: | |||
Cash | $23,430 | ||
Accounts receivable | 59,360 | ||
Merchandise inventory | 24,800 | ||
Estimated returns inventory | 1,200 | ||
Supplies | 2,300 | ||
Prepaid insurance | 1,800 | ||
Total current assets | $112,890 | ||
Property, plant, and equipment: | |||
Land | $90,000 | ||
Building | $350,000 | ||
Less: Accumulated depreciation | 20,000 | 330,000 | |
Store Equipment | $120,000 | ||
Less: Accumulated depreciation | 3,600 | 116,400 | 536,400 |
Total assets | $649,290 | ||
Liabilities | |||
Current liabilities: | |||
Note payable | $2,000 | ||
Accounts payable | 59,560 | ||
Customer refunds payable | 1,700 | ||
Wages payable | 1,200 | ||
Sales tax payable | 3,450 | ||
Total current liabilities | $67,910 | ||
Long-term liabilities: | |||
Note payable | $16,000 | ||
Less: Current portion | 2,000 | 14,000 | |
Total liabilities | $81,910 | ||
Owner's Equity | |||
B. Paulson, capital | 567,380 | ||
Total liabilities and owner's equity | $649,290 |
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
previous answers: and they were not correct.
Current Ratio = Current Assets / Current Liabilities Current Ratio = $112,890 / $67,680 Current Ratio = 1.67
Answer of Part b:
Quick Ratio =(Current Assets Merchandise Inventory Estimated Returns Inventory Prepaid Expense) / Current Liabilities Quick Ratio = ($112,890 - $24,900 - $1,100 - $1,800) / $67,680 Quick Ratio = $85,090 / $67,680 Quick Ratio = 1.26:1
Answer of Part c:
Working Capital = Current Assets Current Liabilities Working Capital= $112,890 - $67,680 Working Capital = $45,210
Answer of Part d:
Return on Owners Equity = Net Income / Owners Equity *100 Return on Owners Equity = $67,970 / $568,310 *100 Return on Owners Equity = 11.96%
Answer of Part e:
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable)/2 Average Accounts Receivable = ($10,100 + $59,360) / 2 Average Accounts Receivable= $34,730
Accounts Receivable Turnover = Sales / Average Accounts Receivable Accounts Receivable Turnover = $320,670 / $34,730 Accounts Receivable Turnover = 9.23 times
Compute the laricial TaLIUS. answers to one ecimal place. Financial Ratios ga to 1 to 1 ma % Current ratio Quick ratio Working capital Return on owner's equity Accounts receivable turnover Average number of days to collect receivables Inventory turnover Average number of days to sell inventory days daysStep by Step Solution
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