Question
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $48,900; total
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $48,900; total assets, $199,400; common stock, $115,000; and retained earnings, $52,348.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2013 | ||
Sales | $ | 447,600 |
Cost of goods sold | 297,950 | |
Gross profit | 149,650 | |
Operating expenses | 98,600 | |
Interest expense | 4,800 | |
Income before taxes | 46,250 | |
Income taxes | 18,631 | |
Net income | $ | 27,619 |
CABOT CORPORATION Balance Sheet December 31, 2013 | ||||||
Assets | Liabilities and Equity | |||||
Cash | $ | 18,000 | Accounts payable | $ | 26,500 | |
Short-term investments | 9,000 | Accrued wages payable | 3,400 | |||
Accounts receivable, net | 31,200 | Income taxes payable | 4,500 | |||
Notes receivable (trade)* | 6,500 | Long-term note payable, secured | ||||
Merchandise inventory | 40,150 | by mortgage on plant assets | 62,400 | |||
Prepaid expenses | 3,000 | Common stock | 115,000 | |||
Plant assets, net | 153,300 | Retained earnings | 49,350 | |||
Total assets | $ | 261,150 | Total liabilities and equity | $ | 261,150 | |
* These are short-term notes receivable arising from customer (trade) sales. |
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. |
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