Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The 2021 income statement of Adrian Express reports sales of $15,642,000, cost of goods sold of $9,351,500, and net income of $1,590,000. Balance sheet information

The 2021 income statement of Adrian Express reports sales of $15,642,000, cost of goods sold of $9,351,500, and net income of $1,590,000. Balance sheet information is provided in the following table.

ADRIAN EXPRESS

Balance Sheets

December 31, 2021 and 202020212020AssetsCurrent assets:Cash$590,000$750,000Accounts receivable1,380,000990,000Inventory1,780,0001,390,000Long-term assets4,790,0004,230,000Total assets$8,540,000$7,360,000Liabilities and Stockholders' EquityCurrent liabilities$2,010,000$1,650,000Long-term liabilities2,290,0002,390,000Common stock1,980,0001,980,000Retained earnings2,260,0001,340,000Total liabilities and stockholders' equity$8,540,000$7,360,000

Industry averages for the following four risk ratios are as follows:

Average collection period25 daysAverage days in inventory60 daysCurrent ratio2 to 1Debt to equity ratio50%

Required:

1.Calculate the four risk ratios listed above for Adrian Express in 2021.(Use 365 days in a year. Round your answers to 1 decimal place.)

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_2

Step: 3

blur-text-image_3

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

Advanced Accounting

Authors: Debra JeterJames Reeve, Jonathan Duchac, Horace Brock, Paul Chaney

4th Edition

0470506989, 978-0470506981

More Books

Students also viewed these Accounting questions