Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 40: The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable,
Question 40: The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets S 6,500 35,000 70,000 115,000 85,000 $300,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity: Common stock, $5 par value Retained carnings Total stockholders' equity Total liabilities and stockholders' equity $ 50,000 80,000 130,000 30,000 140,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating $420,000 127,500 Interesngincomeexpenses Interest expense 38,000 Net income before taxes 30,000 Income taxes (30%) Net income $21,000 Account balances at the beginning of the year were accounts receivable, $25,000 and inventory, $60,000. All sales were on account. Required. Compute the following financial data and ratios: 1. Working capital 2. Current ratio 3. Acid-test ratio 4. Debt-to-equity ratio 8. Operating cycle 5. Times interest earned ratio 6. Average collection period 7. Average sale period 657-16
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started