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 31 of the prior year

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, $54,900; total assets, $199,400; common stock, $86,000; and retained earnings, $30,301.)

CABOT CORPORATION Income Statement For Current Year Ended December 31
Sales $ 455,600
Cost of goods sold 298,150
Gross profit 157,450
Operating expenses 99,200
Interest expense 5,000
Income before taxes 53,250
Income tax expense 21,451
Net income $ 31,799

CABOT CORPORATION Balance Sheet December 31
Assets Liabilities and Equity
Cash $ 8,000 Accounts payable $ 18,500
Short-term investments 8,800 Accrued wages payable 3,400
Accounts receivable, net 33,400 Income taxes payable 3,800
Merchandise inventory 36,150 Long-term note payable, secured by mortgage on plant assets 65,400
Prepaid expenses 2,550 Common stock 86,000
Plant assets, net 150,300 Retained earnings 62,100
Total assets $ 239,200 Total liabilities and equity $ 239,200

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

IT Auditing Defined

Authors: Ibrahim Yussuf, Matthew Robinett

1st Edition

1645435148, 978-1645435143

More Books

Students also viewed these Accounting questions