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, 2012, were inventory, $50,900; 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, $50,900; total assets, $179,400; common stock, $100,000; and retained earnings, $52,348.)

CABOT CORPORATION Income Statement For Year Ended December 31, 2013
Sales $ 449,600
Cost of goods sold 297,750
Gross profit 151,850
Operating expenses 98,700
Interest expense 4,700
Income before taxes 48,450
Income taxes 19,518
Net income $ 28,932

CABOT CORPORATION Balance Sheet December 31, 2013
Assets Liabilities and Equity
Cash $ 22,000 Accounts payable $ 16,500
Short-term investments 9,400 Accrued wages payable 3,400
Accounts receivable, net 30,400 Income taxes payable 3,000
Notes receivable (trade)* 6,000 Long-term note payable, secured
Merchandise inventory 34,150 by mortgage on plant assets 64,400
Prepaid expenses 2,450 Common stock 100,000
Plant assets, net 149,300 Retained earnings 66,400
Total assets $ 253,700 Total liabilities and equity $ 253,700
* 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.(Use 365 days a year. 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

Audit Firm Size And Audit Quality In Nigeria An Empirical Review

Authors: LAP Lambert

1st Edition

6139825466, 978-6139825462

More Books

Students also viewed these Accounting questions

Question

The values of kurtosis range from a - 1 to + 1 true or false

Answered: 1 week ago

Question

I am paid fairly for the work I do.

Answered: 1 week ago

Question

I receive the training I need to do my job well.

Answered: 1 week ago