Answered step by step
Verified Expert Solution
Question
1 Approved Answer
MEGAFRAME COMPUTER COMPANY Balance Sheet As of December 31 ASSETS Cash $ 50,000 Accounts receivable 70,000 Inventory 110,000 Net plant and equipment 220,000 Total assets
MEGAFRAME COMPUTER COMPANY | ||
Balance Sheet | ||
As of December 31 | ||
ASSETS | ||
Cash | $ | 50,000 |
Accounts receivable | 70,000 | |
Inventory | 110,000 | |
Net plant and equipment | 220,000 | |
Total assets | $ | 450,000 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | $ | 70,000 |
Accrued expenses | 50,000 | |
Long-term debt | 130,000 | |
Common stock | 70,000 | |
Paid-in capital | 40,000 | |
Retained earnings | 90,000 | |
Total liabilities and stockholders' equity | $ | 450,000 |
MEGAFRAME COMPUTER COMPANY | ||
Income Statement | ||
For the year ended December 31 | ||
Sales (all on credit) | $ | 875,000 |
Cost of goods sold | 600,000 | |
Gross profit | $ | 275,000 |
Sales and administrative expenses | 30,000 | |
Depreciation | 55,000 | |
Operating profit | $ | 190,000 |
Interest expense | 25,000 | |
Profit before taxes | $ | 165,000 |
Taxes (30%) | 49,500 | |
Net income | $ | 115,500 |
Calculate the following ratios:
- Debt Ratio
- Total Asset Turnover
- Average Collection Period
- Price to Earnings ratio if the Market Price is $110 USD today and number of shares issues are 500,000.
- Operating Return on Assets
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started