Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pepper Company provided the incomplete financial statements shown below as well as the following additional information: All sales during the year were on account. There
Pepper Company provided the incomplete financial statements shown below as well as the following additional information:
- All sales during the year were on account.
- There was no change in the number of shares of common stock outstanding during the year.
- The interest expense on the income statement relates to the bonds payable; the amount of bonds outstanding did not change during the year.
- Selected balances at the beginning of the current year were:
Accounts receivable | $ | 160,000 |
Inventory | $ | 280,000 |
Total assets | $ | 2,160,000 |
e. Selected financial ratios computed from the statements below for the current year are:
Earnings per share | $ | 4.83 | |
Debt-to-equity ratio | 0.900 | ||
Accounts receivable turnover | 16.0 | ||
Current ratio | 2.60 | ||
Return on total assets | 10 | % | |
Times interest earned ratio | 7.75 | ||
Acid-test ratio | 1.19 | ||
Inventory turnover | 6.0 | ||
Required:
Compute the missing amounts on the company's financial statements. (Hint: Whats the difference between the acid-test ratio and the current ratio?) (Do not round intermediate calculations.)
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