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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.)
Required: Compute the missing amounts on the company's financial statements. (Hint: What's the difference between the acid-test ratio and the current ratio?) (Do not round intermediate calculations.) Pepper Industries Income Statement For the Year Ended March 31 Sales $ 3,100,000 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) 1,939,800 1,160,200 803,700 356,500 46,000 310,500 93,150 217,350 Net income $ Pepper Industries Balance Sheet March 31 $ 81,900 227,500 366,600 Current assets: Cash Accounts receivable, net Inventory Total current assets Plant and equipment, net Total assets Liabilities: 676,000 Current liabilities $ 260,000 460,000 720,000 Bonds payable, 10% Total liabilities Stockholders' equity: Common stock, $2.60 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 117,000 683,000 800,000 $ 1,520,000Step by Step Solution
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