Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The 2023 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2023 Net sales $1,016,000 Cost

image text in transcribed

The 2023 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2023 Net sales $1,016,000 Cost of goods sold: Inventory, Dec. 31, 2022 Purchases $ 77,860* 605,840 Goods available for sale Inventory, Dec. 31, 2023 Cost of goods sold Gross profit from sales Operating expenses Operating profit Interest expense $ 683,700 59,790 623,910 $ 392,090 278,360 $ 113,730 11,900 Profit before taxes $ 101,830 Income taxes 19,114 Profit $ 82,716 Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Assets Cash $ 22,700 Current non-strategic investments Accounts receivable, net Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity Accounts payable 25,080 52,580 11,060 59,790 5,860 329,020 $506,090 $ 49,040 Accrued wages payable Income taxes payable mortgage on plant Common shares, 160,000 shares Retained earnings Total liabilities and equity 6,340 7,110 Long-term note payable, secured by 115,500 194,500 133,600 $506,090 Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 31, 2022, balance sheet, the assets totalled $435,220, common shares were $194,500, and retained earnings were $109,140. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest eamed h. Profit margin i. Total asset turnover to 1 to 1 days times days to 1 times % times j. Return on total assets % k. Return on common shareholders' equity %

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

Financial Accounting in an Economic Context

Authors: Jamie Pratt

8th Edition

9781118139424, 9781118139431, 470635290, 1118139429, 1118139437, 978-0470635292

More Books

Students also viewed these Accounting questions