Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $48,900; total assets, $199,400; common stock, $81,000; and retained earnings, $35,158 CABOT CORPORATION Income Statement For Year Ended December 31 2017 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes $449,600 297,150 152,450 99,000 4,900 48,550 19.558 $ 28,992 Net income CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity Assets Cash Short-term investments Accounts receivable net Notes receivable (trade) * Merchandise inventory $ 17,500 3,600 3,300 $ 10,000 Accounts payable 8,800 Accrued wages payable 31,400 Income taxes payable 6,500 30,150 Long-term note payable, 69,400 secured by mortgage on plant assets Prepaid expenses Plant assets, net 2,800 Common stock 149,300 Retained earnings 81,000 64,150 $238,950 Total liabilities and $238,950 Total assets equity These are short-term notes receivable arising from customer (trade) sales Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $48,900; total assets, $199,400; common stock, $81,000; and retained earnings, $35,158 CABOT CORPORATION Income Statement For Year Ended December 31 2017 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes $449,600 297,150 152,450 99,000 4,900 48,550 19.558 $ 28,992 Net income CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity Assets Cash Short-term investments Accounts receivable net Notes receivable (trade) * Merchandise inventory $ 17,500 3,600 3,300 $ 10,000 Accounts payable 8,800 Accrued wages payable 31,400 Income taxes payable 6,500 30,150 Long-term note payable, 69,400 secured by mortgage on plant assets Prepaid expenses Plant assets, net 2,800 Common stock 149,300 Retained earnings 81,000 64,150 $238,950 Total liabilities and $238,950 Total assets equity These are short-term notes receivable arising from customer (trade) sales