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Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $55,900; total
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $55,900; total assets, $169,400; common stock, $86,000; and retained earnings, $47,625.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2017 | |||
Sales | $ | 452,600 | |
Cost of goods sold | 298,450 | ||
Gross profit | 154,150 | ||
Operating expenses | 98,800 | ||
Interest expense | 4,400 | ||
Income before taxes | 50,950 | ||
Income taxes | 20,525 | ||
Net income | $ | 30,425 | |
CABOT CORPORATION Balance Sheet December 31, 2017 | |||||||
Assets | Liabilities and Equity | ||||||
Cash | $ | 10,000 | Accounts payable | $ | 15,500 | ||
Short-term investments | 9,200 | Accrued wages payable | 3,800 | ||||
Accounts receivable, net | 31,600 | Income taxes payable | 4,500 | ||||
Notes receivable (trade)* | 7,500 | ||||||
Merchandise inventory | 40,150 | Long-term note payable, secured by mortgage on plant assets | 65,400 | ||||
Prepaid expenses | 2,500 | Common stock | 86,000 | ||||
Plant assets, net | 152,300 | Retained earnings | 78,050 | ||||
Total assets | $ | 253,250 | Total liabilities and equity | $ | 253,250 | ||
* These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
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