Question
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 21,000 Accounts receivable,
The financial statements for Castile Products, Inc., are given below: |
Castile Products, Inc. Balance Sheet December 31 | ||||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 21,000 | ||||
Accounts receivable, net | 210,000 | |||||
Merchandise inventory | 310,000 | |||||
Prepaid expenses | 9,000 | |||||
Total current assets | 550,000 | |||||
Property and equipment, net | 890,000 | |||||
Total assets | $ | 1,440,000 | ||||
Liabilities and Stockholders' Equity | ||||||
Liabilities: | ||||||
Current liabilities | $ | 210,000 | ||||
Bonds payable, 11% | 350,000 | |||||
Total liabilities | 560,000 | |||||
Stockholders equity: | ||||||
Common stock, $5 par value | $ | 140,000 | ||||
Retained earnings | 740,000 | |||||
Total stockholders equity | 880,000 | |||||
Total liabilities and stockholders' equity | $ | 1,440,000 | ||||
Castile Products, Inc. Income Statement For the Year Ended December 31 | |||
Sales | $ | 2,260,000 | |
Cost of goods sold | 1,210,000 | ||
Gross margin | 1,050,000 | ||
Selling and administrative expenses | 600,000 | ||
Net operating income | 450,000 | ||
Interest expense | 38,500 | ||
Net income before taxes | 411,500 | ||
Income taxes (30%) | 123,450 | ||
Net income | $ | 288,050 | |
Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $290,000. All sales were on account. Assets at the beginning of the year totaled $1,090,000, and the stockholders equity totaled $635,000. |
Required: | ||||||||||||||||||
Compute the following:
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