Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Smart Toys Corporation engages in wholesaling and retailing of children toys and books in Hong Kong. Condensed statements of financial position and income statements for

Smart Toys Corporation engages in wholesaling and retailing of children toys and books in Hong Kong.
Condensed statements of financial position and income statements for Smart Toys Corporation are as follows:
Please be reminded that examination can come up with different ratios(all covered in week 11 Materials) instead of ratios below
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31 All answers round to two decimal places except (c ) & (e), eg 54.544 input as 54.54 , 54.545 input as 54.55
2019 2018 2017
$ $ $ 2019 2018
Plant and equipment (net) 500,000 466,000 440,000 a)Current ratio 5.11 times times
Intangible Assets 580,000 480,000 412,000 b) Acid Test Ratio times times
Short Term Investments 56,000 140,000 97,200 b)Inventory Turnover times times
Prepaid Insurance (less than 12 months) 4,000 4,000 3,800 c)Average days to sell inventory 100 Days Days (Round to days, no decimal place required)
Inventory 126,000 119,000 79,000 d)Accounts Receivable turnover times times (Assume all the sale are credit sales)
Accounts receivables (net) 54,000 48,000 60,000 e) Average Collection Period Days Days (Round to days, no decimal place required)
Cash 220,000 144,000 122,000 f)Profit Margin % %
1,540,000 1,401,000 1,214,000 g)Return on Assets % %
h)Asset Turnover times times
Accounts Payable 80,000 100,000 100,000 i) Return on ordinary shareholders' Equity % %
Salaries Payable and other current liabilities 10,000 16,000 12,000 j) Dividend Payout Ratio 0.00% %
Long-term debt (due in five years) 91,000 104,000 98,000 k)Earings per Share $ $
Ordinary shares, $10 par 400,000 400,000 360,000 (Weighted-average ordinary shares in 2019 were 40,000 and in 2018 were 38,000)
Retained earnings 959,000 781,000 644,000 l)Time interest earned ratio times times
1,540,000 1,401,000 1,214,000 m) Debt to total assets ratio % 15.70%
SMART TOYS CORPORATION
INCOME STATEMENT For the following questions , please state year 2019 or 2018
FOR THE YEAR ENDED DECEMBER 31
2019 2018 Based on the calculated ratios:
$ $ Which year did the company collect money faster from the customer ? Year
Sales 866,000 799,000 Which year did the company have a better position to pay off the short term liabilities Year
Less: Sales allowances 13,000 18,000
Net sales 853,000 781,000
Less: Cost of goods sold 445,000 414,000
Gross profit 408,000 367,000
Operating expenses 180,000 190,000
Less: Interest expense 20,000 16,000
Less: Income tax 30,000 24,000
Net income 178,000 137,000

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 Chapters 14-23

Authors: Charles T. Horngren, Walter T. Harrison Jr, M. Suzanne Oliver

8th Edition

0136073018, 978-0136073017

Students also viewed these Accounting questions