Question
The following financial information is for Priscoll Company. PRISCOLL COMPANY Balance Sheets December 31 Assets 2017 2016 Cash $ 70,000 $ 65,000 Debt investments (short-term)
The following financial information is for Priscoll Company.
PRISCOLL COMPANY Balance Sheets December 31 | ||||
---|---|---|---|---|
Assets | 2017 | 2016 | ||
Cash | $ 70,000 | $ 65,000 | ||
Debt investments (short-term) | 55,000 | 40,000 | ||
Accounts receivable | 104,000 | 90,000 | ||
Inventory | 230,000 | 165,000 | ||
Prepaid expenses | 25,000 | 23,000 | ||
Land | 130,000 | 130,000 | ||
Building and equipment (net) | 260,000 | 185,000 | ||
Total assets | $874,000 | $698,000 | ||
Liabilities and Stockholders Equity | ||||
Notes payable | $170,000 | $120,000 | ||
Accounts payable | 65,000 | 52,000 | ||
Accrued liabilities | 40,000 | 40,000 | ||
Bonds payable, due 2017 | 250,000 | 170,000 | ||
Common stock, $10 par | 200,000 | 200,000 | ||
Retained earnings | 149,000 | 116,000 | ||
Total liabilities and stockholders equity | $874,000 | $698,000 |
PRISCOLL COMPANY Income Statements For the Years Ended December 31 | ||||
---|---|---|---|---|
2017 | 2016 | |||
Sales revenue | $882,000 | $790,000 | ||
Cost of goods sold | 640,000 | 575,000 | ||
Gross profit | 242,000 | 215,000 | ||
Operating expenses | 190,000 | 167,000 | ||
Net income | $ 52,000 | $ 48,000 |
Additional information:
1. | Inventory at the beginning of 2016 was $115,000. | |
2. | Accounts receivable (net) at the beginning of 2016 were $86,000. | |
3. | Total assets at the beginning of 2016 were $660,000. | |
4. | No common stock transactions occurred during 2016 or 2017. | |
5. | All sales were on account. |
Part 1
Part 1
- Your Answer
- Correct Answer
Partially correct answer iconYour answer is partially correct.
Compute the liquidity and profitability ratios of Priscoll Company for 2016 and 2017. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).)
2016 | 2017 | % Change | |||||||
---|---|---|---|---|---|---|---|---|---|
LIQUIDITY | |||||||||
Current ratio | Enter a number | :1 | Enter a number | :1 | Enter percentages | % | |||
Accounts receivables turnover | Enter a number | times | Enter a number | times | Enter percentages | % | |||
Inventory turnover | Enter a number | times | Enter a number | times | Enter percentages | % |
2016 | 2017 | % Change | |||||||
---|---|---|---|---|---|---|---|---|---|
PROFITABILITY | |||||||||
Profit margin | Enter percentages | % | Enter percentages | % | Enter percentages | % | |||
Asset turnover | Enter a number | times | Enter a number | times | Enter percentages | % | |||
Return on assets | Enter percentages | % | Enter percentages | % | Enter percentages | % | |||
Earnings per share | $Enter a dollar amount | $Enter a dollar amount | Enter percentages | % |
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Part 2
Part 2
Partially correct answer iconYour answer is partially correct.
Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2017, and (2) as of December 31, 2018, after giving effect to the situation. Net income for 2018 was $54,000. Total assets on December 31, 2018, were $900,000. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).)
Situation | Ratio | |||
---|---|---|---|---|
1. | 18,000 shares of common stock were sold at par on July 1, 2018. | Return on common stockholders equity | ||
2. | All of the notes payable were paid in 2018. | Debt to assets ratio | ||
3. | The market price of common stock was $9 and $12 on December 31, 2017 and 2018, respectively. | Price-earnings ratio |
2017 | 2018 | % Change | |||||||
---|---|---|---|---|---|---|---|---|---|
Return on common stockholders equity | Enter percentages | % | Enter percentages | % | Enter percentages | % | |||
Debt to assets ratio | Enter percentages | % | Enter percentages | % | Enter percentages | % | |||
Price earnings ratio | Enter a number | times | Enter a number | times | Enter percentages |
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