Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help. (questions needing answered on second picture) GROUPWORK (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago through a public subscription

please help. (questions needing answered on second picture)
image text in transcribed
image text in transcribed
GROUPWORK (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2018, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,000 notes, which are due on June 30, 2018, and September 30, 2018. Another note of $6,000 is due on March 31, 2019, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn's cash flow problems are due primarily to the com- pany's desire to finance a $300,000 plant expansion over the next 2 fiscal years through internally generated funds The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. BRADBURN CORPORATION BALANCE SHEET MARCH 31 2018 2017 Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) $ 18,200 148,000 $ 12,500 132,000 125,500 50,000 1,420,500 131,800 105,000 1,449,000 Total $1,852,000 $1,740,500 Liabilities and Stockholders' Equity Accounts payable Notes payable Accrued liabilities S 79,000 76,000 9,000 $ 91,000 61,500 6,000 1,300,000 282,000 Common stock (130,000 shares, $10 par) Retained earnings 1,300,000 388,000 Total liabilities and stockholders' equity $1,852,000 $1,740,500 Cash dividends were paid at the rate of $i per share in fiscal year 2017 and $2 per share in fiscal year 2018 BRADBURN CORPORATION INCOME STATEMENT FOR THE FISCAL YEARS ENDED MARCH 31 2018 2017 $3,000,000 $2,700,000 Sales revenue Cost of goods sold' Gross margin Operating expenses 1,530,000 1,425,000 1,275,000 780,000 1,470,000 860,000 495,000 198,000 Income before income taxes 610,000 244,000 Income taxes (40%) $ 297,000 $ 366,000 Net income Depreciation charges on the plant and equipment of $100,000 and $102,500 for fiscal years ended March 31, 2017 and 2018, respectively, are included in cost of goods sold. Compute the following items for Bradburn Corporation. (show computations) 1) Acid-test (quick) ration for fiscal years 2017 and 2018 2) A/R turnover 3) Inventory turnover for fiscal year 2018 4) Profit margin on sales 5) Return on common shareholders' equity 6) Book value per share

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions