Multiple Choice Question 121

The following information pertains to Vaughn Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

AssetsCash and short-term investments$43000Accounts receivable (net)30000Inventory20000Property, plant and equipment (net)209000Total Assets$302000

Liabilities and Stockholders' EquityCurrent liabilities$53000Long-term liabilities85000Stockholders' equitycommon164000Total Liabilities and Stockholders' Equity$302000

Income StatementSales (net)$119000Cost of goods sold64000Gross profit55000Operating expenses25000Net income$30000

Number of shares of common stock5000Market price of common stock$22Dividends per share0.60

What is the inventory turnover for Vaughn?

0.31 times

3.55 times

3.20 times

6.95 times

Exercise 194 a-d (Part Level Submission)

Selected data from Decco Company are presented below:

Total assets$1,600,000Average total assets2,000,000Net income380,000Net sales1,500,000Average common stockholders' equity1,000,000

Calculate the profitability ratios that can be computed from the above information.

(a)

Calculate the profit margin.(Round answer to 1 decimal place, e.g. 15.2%.)

1. Profit margin %'
2. Asset Turnover
3. return on asset
4. return on common stock equity

Exercise 205 a-b (Part Level Submission)

Deane Company has income from continuing operations of $520,000 for the year ended December 31, 2020. It also has the following items (before considering income taxes):

(1)A gain of $80,000 on the discontinuance of a major segment.(2)A correction of an error in last year's financial statement that resulted in a $60,000 overstatement of 2019 net income.

Assume all items are subject to income taxes at a 25% tax rate.

Indicate the statement presentation of any item not included in (a) above.