{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T05:31:24-04:00", "answer_date": "2024-06-28 05:31:24", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4244834", "url": "\/study-help\/questions\/the-financial-statements-for-castile-products-inc-are-given-below-4244834", "question_creation_date_js": "2024-06-28T05:31:24-04:00", "question_creation_date": "Jun 28, 2024 05:31 AM", "meta_title": "[Solved] The financial statements for Castile Prod | SolutionInn", "meta_description": "Answer of - The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 | SolutionInn", "meta_keywords": "financial,statements,castile,products,inc.,below,inc,balance,sheet,december,31,assets", "question_title_h1": "The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 6,500 Accounts receivable,", "question_title": "The financial statements for Castile Products, Inc., are given below: Castile Products,", "question_title_for_js_snippet": "The financial statements for Castile Products, Inc , are given below Castile Products, Inc Balance Sheet December 31 Assets Current assets Cash $ 6,500 Accounts receivable, net 35,000 Merchandise inventory 70,000 Prepaid expenses 3,500 Total current assets 115,000 Property and equipment, net 185,000 Total assets $ 300,000 Liabilities and Stockholders' Equity Liabilities Current liabilities $ 50,000 Bonds payable, 10 80,000 Total liabilities 130,000 Stockholders equity Common stock, $5 par value $ 30,000 Retained earnings 140,000 Total stockholders equity 170,000 Total liabilities and equity $ 300,000 Castile Products, Inc Income Statement For the Year Ended December 31 Sales $ 420,000 Cost of goods sold 292,500 Gross margin 127,500 Selling and administrative expenses 89,500 Net operating income 38,000 Interest expense 8,000 Net income before taxes 30,000 Income taxes (30 ) 9,000 Net income $ 21,000 Account balances at the beginning of the year were accounts receivable, $25,000 and inventory, $60,000 All sales were on account Required Compute the following financial data and ratios 1 working capital 2 current ratio 3 acid test ratio 4 debt to equity ratio 5 times interest earned ratio 6 average collection period 7 average sale period 8 operating cycle", "question_description": "

The financial statements for Castile Products, Inc., are given below:<\/p> <\/td><\/tr><\/tbody><\/table>

<\/p>
Castile Products, Inc. Balance Sheet December 31<\/td><\/tr>
Assets<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Current assets:<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Cash<\/td> <\/td> <\/td> <\/td> $<\/td> 6,500<\/td> <\/td> <\/tr>
Accounts receivable, net<\/td> <\/td> <\/td> <\/td> <\/td> 35,000<\/td> <\/td> <\/tr>
Merchandise inventory<\/td> <\/td> <\/td> <\/td> <\/td> 70,000<\/td> <\/td> <\/tr>
Prepaid expenses<\/td> <\/td> <\/td> <\/td> <\/td> 3,500<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Total current assets<\/td> <\/td> <\/td> <\/td> <\/td> 115,000<\/td> <\/td> <\/tr>
Property and equipment, net<\/td> <\/td> <\/td> <\/td> <\/td> 185,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Total assets<\/td> <\/td> <\/td> <\/td> $<\/td> 300,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Liabilities and Stockholders' Equity<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Liabilities:<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Current liabilities<\/td> <\/td> <\/td> <\/td> $<\/td> 50,000<\/td> <\/td> <\/tr>
Bonds payable, 10%<\/td> <\/td> <\/td> <\/td> <\/td> 80,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Total liabilities<\/td> <\/td> <\/td> <\/td> <\/td> 130,000<\/td> <\/td> <\/tr>
Stockholders equity:<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Common stock, $5 par value<\/td> <\/td> <\/td> <\/td> $<\/td> 30,000<\/td> <\/td> <\/tr>
Retained earnings<\/td> <\/td> <\/td> <\/td> <\/td> 140,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Total stockholders equity<\/td> <\/td> <\/td> <\/td> <\/td> 170,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Total liabilities and equity<\/td> <\/td> <\/td> <\/td> $<\/td> 300,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr> <\/tbody><\/table>

<\/p>
Castile Products, Inc. Income Statement For the Year Ended December 31<\/td><\/tr>
Sales<\/td> $<\/td> 420,000<\/td> <\/td> <\/tr>
Cost of goods sold<\/td> <\/td> 292,500<\/td> <\/td> <\/tr>
<\/td><\/tr>
Gross margin<\/td> <\/td> 127,500<\/td> <\/td> <\/tr>
Selling and administrative expenses<\/td> <\/td> 89,500<\/td> <\/td> <\/tr>
<\/td><\/tr>
Net operating income<\/td> <\/td> 38,000<\/td> <\/td> <\/tr>
Interest expense<\/td> <\/td> 8,000<\/td> <\/td> <\/tr>
<\/td><\/tr>
Net income before taxes<\/td> <\/td> 30,000<\/td> <\/td> <\/tr>
Income taxes (30%)<\/td> <\/td> 9,000<\/td> <\/td> <\/tr>
<\/td><\/tr>
Net income<\/td> $<\/td> 21,000<\/td> <\/td> <\/tr>
<\/td><\/tr> <\/tbody><\/table>

<\/p>

Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.<\/p> <\/td><\/tr><\/tbody><\/table>

<\/p>
Required:<\/td><\/tr>

Compute the following financial data and ratios:<\/p><\/td><\/tr> <\/tbody><\/table>

1. working capital<\/p>

2. current ratio<\/p>

3. acid-test ratio<\/p>

4. debt-to-equity ratio<\/p>

5. times interest earned ratio<\/p>

6. average collection period<\/p>

7. average sale period<\/p>

8. operating cycle<\/p>

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