Problem 13-4A Calculating financial statement ratios LO P3 Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $49,900; total assets, $189,400; common stock, $89,000; and retained earnings. $22,285.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income $ 455,600 297,250 158,350 99,400 4,500 54,450 21,935 $ 32,515 Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 14,000 Accounts payable $ 17,500 8,200 Accrued wages payable 3,000 33,400 Income taxes payable 4,200 30,150 Long-term note payable, secured by 68,400 2,850 Common stock mortgage on plant assets 148,300 Retained earnings $236,900 Total liabilities and equity 89,000 54,800 $ 236,900