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The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 23,000 Accounts receivable,
The financial statements for Castile Products, Inc., are given below: |
Castile Products, Inc. Balance Sheet December 31 | ||||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 23,000 | ||||
Accounts receivable, net | 250,000 | |||||
Merchandise inventory | 320,000 | |||||
Prepaid expenses | 9,000 | |||||
Total current assets | 602,000 | |||||
Property and equipment, net | 910,000 | |||||
Total assets | $ | 1,512,000 | ||||
Liabilities and Stockholders' Equity | ||||||
Liabilities: | ||||||
Current liabilities | $ | 210,000 | ||||
Bonds payable, 8% | 310,000 | |||||
Total liabilities | 520,000 | |||||
Stockholders equity: | ||||||
Common stock, $5 par value | $ | 160,000 | ||||
Retained earnings | 832,000 | |||||
Total stockholders equity | 992,000 | |||||
Total liabilities and equity | $ | 1,512,000 | ||||
Castile Products, Inc. Income Statement For the Year Ended December 31 | |||
Sales | $ | 3,010,000 | |
Cost of goods sold | 1,320,000 | ||
Gross margin | 1,690,000 | ||
Selling and administrative expenses | 560,000 | ||
Net operating income | 1,130,000 | ||
Interest expense | 24,800 | ||
Net income before taxes | 1,105,200 | ||
Income taxes (30%) | 331,560 | ||
Net income | $ | 773,640 | |
Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $340,000. All sales were on account. |
Compute the following financial data and ratios: |
| 1. Working capital. |
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2. | Current ratio. (Round your answer to 2 decimal places.) |
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3. | Acid-test ratio. (Round your answer to 2 decimal places.) |
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4. | Debt-to-equity ratio. (Round your answer to 2 decimal places.) |
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5. | Times interest earned ratio. (Round your answer to 2 decimal places.) |
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6. | Average collection period. (Use 365 days in a year. Round your answer to 1 decimal place.) |
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7. | Average sale period. (Use 365 days in a year. Round your intermediate and final answer to 1 decimal place.) |
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8. | Operating cycle. (Round your intermediate calculations and final answers to 1 decimal place.) |
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