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The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information: Total Inc. Income Statement Year Ended December 31,

The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information:

Total Inc.
Income Statement
Year Ended December 31, 20X6
Sale $ 50,000
Cost of goods sold $ 30,000
Gross Profit $ 20,000
Operating Expenses $ 15,000
Profit from Operations $ 5,000
Income Tax Expense $ 3,000
Profit $ 2,000

Total Inc. comparative balance sheet at December 31

20X6 20X5
Cash $ 1,200 $ 1,000
Accounts Receivable $ 300 $ 1,500
Inventory $ 5,000 $ 3,000
Equipment $ 12,000 $ 8,000
Accumulated Depreciation - equipment $ (4,000 ) $ (2,000 )
Total Assets $ 14,500 $ 11,500
Account Payable $ 1,000 $ 3,500
Long-term Notes Payable $ 2,000 $ -
Common shares $ 10,000 $ 8,000
Retained Earnings $ 1,500 $ -
Total Liabilities & Shareholders' Equity $ 14,500 $ 11,500

Additional Information:

  1. Operating expenses include depreciation expense of $2,500
  2. Accounts Payable related to the purchase of inventory
  3. Equipment that cost $2,000 was sold for $1,500 cash
  4. New equipment was purchased during the year for $5,000
  5. Common shares were sold for $2,000 cash

Round answers to fit 2 decimal places in all questions (in % questions a 0.12 is presented as 12%, so a 0.124 is rounded as 12% and 0.127 is rounded as 13%)

The working capital turnover at December 20X6 was:

Multiple Choice

  • Between 1.1 and 6

  • Not enough data provided to calculate it

  • Equal or below 1

  • Equal or above 9.01

  • Between 6.1 and 9

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