Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $51,900; 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, $51,900; total assets, $209,400; common stock, $87,000; and retained earnings, $57,823.)

CABOT CORPORATION Income Statement For Year Ended December 31, 2017
Sales $ 448,600
Cost of goods sold 297,750
Gross profit 150,850
Operating expenses 99,100
Interest expense 4,900
Income before taxes 46,850
Income taxes 18,873
Net income $ 27,977

CABOT CORPORATION Balance Sheet December 31, 2017
Assets Liabilities and Equity
Cash $ 22,000 Accounts payable $ 15,500
Short-term investments 9,200 Accrued wages payable 3,800
Accounts receivable, net 31,200 Income taxes payable 2,900
Notes receivable (trade)* 6,000
Merchandise inventory 36,150 Long-term note payable, secured by mortgage on plant assets 66,400
Prepaid expenses 2,550 Common stock 87,000
Plant assets, net 154,300 Retained earnings 85,800
Total assets $ 261,400 Total liabilities and equity $ 261,400

* These are short-term notes receivable arising from customer (trade) sales. 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

Environmental Health And Safety Audits A Compendium Of Thoughts And Trends

Authors: Lawrence B. Cahill

2nd Edition

1598889737, 978-1598889734

Students also viewed these Accounting questions

Question

=+6. Whether they'd talk to others about the ad.

Answered: 1 week ago