MANAGERIAL ACCOUNTING

I. Profitability and Solvency. Following are data about Blite company:

Average total assets $150,000$

Average owner$$s equity $60,000$

Net income after interest and before tax $10,000$

Bonds payable, $8\%50,000$

Income tax rate $35\%$

Required: Calculate the following ratios.

$1.$ Times interest earned

$2.$ Return on equity

$3.$ Return on assets

II$.$ Turnover Ratios. Below are data about Lio Merchandising Company:

Sales $500,000$

Cost of goods sold $200,000$

Average inventory $20,000$

Average receivables $30,000$

Working days in a year $360$ days

Required: Compute the following:

a$.$ Inventory turnover

b$.$ Receivables turnover

c$.$ Collection period of accounts receivables

d$.$ Average age of inventories

e$.$ Operating cycle

III. Prepare a Horizontal analysis using the following information from comparative condensed

financial statements of Jampolis Corporation:

Jampolis Corporation

Statement of Income and Retained Earnings

For the Year Ending December $31$

$20212020$

Sales $100,00097,500$

Less cost of goods sold $61,25055,000$

Gross margin $38,75042,500$

Operating expenses $(26,000)(26,250)$

Interest expense $(2,500)(2,250)$

Income before tax $10,25014,000$

Income taxes $3,5904,900$

Net income after tax $6,6009,100$