Question
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets:Cash$23,000Accounts receivable, net250,000Merchandise inventory320,000Prepaid expenses9,000Total current
The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc.
Balance Sheet
December 31AssetsCurrent assets:Cash$23,000Accounts receivable, net250,000Merchandise inventory320,000Prepaid expenses9,000Total current assets602,000Property and equipment, net900,000Total assets$1,502,000Liabilities and Stockholders' EquityLiabilities:Current liabilities$210,000Bonds payable, 10%390,000Total liabilities600,000Stockholders' equity:Common stock, $10 par value$170,000Retained earnings732,000Total stockholders' equity902,000Total liabilities and stockholders' equity$1,502,000
Castile Products, Inc.
Income Statement
For the Year Ended December 31Sales$3,075,000Cost of goods sold1,360,000Gross margin1,715,000Selling and administrative expenses600,000Net operating income1,115,000Interest expense39,000Net income before taxes1,076,000Income taxes (30%)322,800Net income$753,200
Account balances at the beginning of the year were: accounts receivable, $160,000; and inventory, $360,000. All sales were on account.
Compute the following financial data and ratios:
1. Working capital.
2. Current ratio.(Round your answer to 1 decimal place.)
3. Acid-test ratio.(Round your answer to 2 decimal places.)
4. Debt-to-equity ratio.(Round your answer to 2 decimal places.)
5. Times interest earned ratio.(Round your answer to 2 decimal places.)
6. Average collection period.(Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)
7. Average sale period.(Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)
8. Operating cycle.(Round your intermediate calculations and final answer to 1 decimal place.)
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