Problem 17-4A 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, $53,900; total assets, $249,400; common stock, $88,000; and retained earnings, $37,239.)

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 Net income $ 452,600 296,850 155,750 98,600 4,800 52,350 21,089 $ 31,261 CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade)* Merchandise inventory $ 16,000 Accounts payable $ 15,500 4,400 3,400 9,000 Accrued wages payable 30,200 Income taxes payable 6,500 36,150 Long-term note payable, secured by 69,400 mortgage on plant assets Prepaid expenses Plant assets, net Total assets 3,050 Common stock 148,300 Retained earnings 88,000 68,500 $ 249,200 $ 249,200 Total liabilities and equity k These are short-term notes receivable arising from customer (trade) sales