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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 |
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