Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Selected current year - end financial statements of Cabot Corporation follow. ( All sales were on credit; selected balance sheet amounts at December 3 1

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, $52,900; total assets, $219,400; common stock, $83,000; and retained earnings, $53,061.)
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales $ 449,600
Cost of goods sold 297,150
Gross profit 152,450
Operating expenses 99,000
Interest expense 3,900
Income before taxes 49,550
Income tax expense 19,961
Net income $ 29,589
CABOT CORPORATION
Balance Sheet
December 31
Assets Liabilities and Equity
Cash $ 18,000 Accounts payable $ 18,500
Short-term investments 9,200 Accrued wages payable 5,000
Accounts receivable, net 32,000 Income taxes payable 3,100
Merchandise inventory 40,150 Long-term note payable, secured by mortgage on plant assets 64,400
Prepaid expenses 3,000 Common stock 83,000
Plant assets, net 154,300 Retained earnings 82,650
Total assets $ 256,650 Total liabilities and equity $ 256,650
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)

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

Step: 3

blur-text-image

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

Financial and Managerial Accounting the basis for business decisions

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

18th edition

125969240X, 978-1259692406

More Books

Students also viewed these Accounting questions

Question

i need correct answrrs 4 9 2 . .

Answered: 1 week ago

Question

Specify the importance of the sport facility as place.

Answered: 1 week ago

Question

Explain the main issues in ticket distribution.

Answered: 1 week ago