Question
The financial statements of El Camino Company appear below: ELCAMINO COMPANY Comparative Balance Sheet December 31, _____________________________________________________________________ Assets 2020 2019 Cash ................................................................................................. $ 25,000 $
The financial statements of El Camino Company appear below:
ELCAMINO COMPANY
Comparative Balance Sheet
December 31,
_____________________________________________________________________
Assets 2020 2019
Cash ................................................................................................. $ 25,000 $ 40,000
Accounts receivable........................................................................... 70,000 90,000
Inventory ........................................................................................... 140,000 170,000
Property, plant, and equipment......................................................... 170,000 200,000
Total assets ................................................................................ $405,000 $500,000
ELCAMINO COMPANY
Income Statement
For the Year Ended December 31, 2020
Net sales............................................................................................ $360,000
Expenses
Cost of goods sold ...................................................................... 184,000
Interest expense ......................................................................... $11,000
Selling expenses ........................................................................ 30,000
Administrative expenses ............................................................ 20,000
Total expenses ..................................................................... 245,000
Income before income taxes ............................................................ 115,000
Income tax expense ......................................................................... 35,000
Net income ....................................................................................... $ 80,000
Liabilities and stockholders' equity
Accounts payable ............................................................................. $ 25,000 $ 30,000
Short-term notes payable ................................................................. 40,000 90,000
Bonds payable .................................................................................. 75,000 160,000
Common stock .................................................................................. 160,000 145,000
Retained earnings ............................................................................ 105,000 75,000
Total liabilities and stockholders' equity...................................... $405,000 $500,000
ELCAMINO COMPANY
Income Statement
For the Year Ended December 31, 2020
Net sales............................................................................................ $360,000
Expenses
Cost of goods sold ...................................................................... 184,000
Interest expense ......................................................................... $11,000
Selling expenses ........................................................................ 30,000
Administrative expenses ............................................................ 20,000
Total expenses ..................................................................... 245,000
Income before income taxes ............................................................ 115,000
Income tax expense ......................................................................... 35,000
Net income ....................................................................................... $ 80,000
Additional information:
a. Cash dividends of $30,000 were declared and paid on common stock in 2020.
b. Weighted-average number of shares of common stock outstanding during 2020 was 50,000 shares.
Using this information, calculate the following for 2020: (Please show all computations.)
- Current ratio ___________________________________
- Accounts receivable turnover ___________________________________
- Average collection period ___________________________________
- Inventory turnover ___________________________________
- Days in inventory ___________________________________
- Profit Margin ___________________________________
- Debt to assets ___________________________________
- Return on Assets ___________________________________
- Return on Common Stockholders Equity ___________________________________
- Earnings per Share ___________________________________
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Modern Internal Auditing Appraising Operations And Controls
Authors: Victor Z. Brink, Herbert N. Witt
4th Edition
0471080977, 978-0471080978
