Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sheridan Medical manufactures hospital beds and other institutional furniture. The companys comparative balance sheet and income statement for 2019 and 2020 follow. Sheridan Medical Comparative

Sheridan Medical manufactures hospital beds and other institutional furniture. The companys comparative balance sheet and income statement for 2019 and 2020 follow.

Sheridan Medical Comparative Balance Sheet As of December 31
2020 2019
Assets
Current assets
Cash $391,000 $417,400
Accounts receivable, net 1,018,000 776,500
Inventory 720,000 681,050
Other current assets 381,350 247,050
Total current assets 2,510,350 2,122,000
Property, plant, & equipment, net 8,717,185 8,440,050
Total assets $11,227,535 $10,562,050
Liabilities and Stockholders Equity
Current liabilities $3,167,000 $2,846,100
Long-term debt 3,702,600 3,892,700
Total liabilities 6,869,600 6,738,800
Preferred stock, $5 par value 58,950 58,950
Common stock, $0.25 par value 104,650 103,900
Retained earnings 4,194,335 3,660,400
Total stockholders equity 4,357,935 3,823,250
Total liabilities and stockholders equity $11,227,535 $10,562,050

Sheridan Medical Comparative Income Statement and Statement of Retained Earnings For the Year
2020 2019
Sales revenue (all on account) $10,177,250 $9,614,000
Cost of goods sold 5,612,650 5,298,700
Gross profit 4,564,600 4,315,300
Operating expenses 2,840,250 2,634,150
Net operating income 1,724,350 1,681,150
Interest expense 300,300 308,650
Net income before taxes 1,424,050 1,372,500
Income taxes (30%) 427,215 411,750
Net income $996,835 $960,750
Dividends paid
Preferred dividends 29,450 29,550
Common dividends 433,450 413,100
Total dividends paid 462,900 442,650
Net income retained 533,935 518,100
Retained earnings, beginning of year 3,660,400 3,142,300
Retained earnings, end of year $4,194,335 $3,660,400

(a-d)

  • Your Answer
  • Correct Answer

Correct answer iconYour answer is correct.

Calculate the following liquidity ratios for 2020. (If working capital is negative then enter with a negative sign preceding the number or parentheses, e.g. -15,000 or (15,000). Round all answers except working capital to 2 decimal places, e.g. 2.55.)

a. Working capital $
b. Current ratio
c. Acid-test ratio
d. Accounts receivable turnover times

eTextbook and Media

Solution

Attempts: 3 of 3 used

(e-f)

Correct answer iconYour answer is correct.

Calculate the following liquidity ratios for 2020. (Round average collection period to 0 decimal place, e.g. 25 and inventory turnover ratio to 2 decimal places, e.g. 5.12. Use 365 days for calculation.)

a. Average collection period days
b. Inventory turnover times

eTextbook and Media

Attempts: 1 of 3 used

(g)

Incorrect answer iconYour answer is incorrect.

Calculate average days to sell inventory for 2020. (Round answer to 0 decimal places, e.g. 25. Use 365 days for calculation.)

Average days to sell inventory days

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

Accounting For The Environment

Authors: Rob Gray, Jan Bebbington

2nd Edition

0761971378, 978-0761971375

More Books

Students also viewed these Accounting questions