Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Year 2 income statement of Company A reports sales of $15,327,000, cost of goods sold of $9,106,000, and net income of $1,580,000. Balance sheet

image text in transcribed
The Year 2 income statement of Company A reports sales of $15,327,000, cost of goods sold of $9,106,000, and net income of $1,580,000. Balance sheet Information is provided in the following table. COMPANY A Balance Sheet December 31, Year 2 nd Year 1 Year 2 Year Assets Current ansett Caab Necounts receivable Inventory Long-term Annota Total assets Liabilities and stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total libilities and stockholders equity $ 580,000 $740,000 1,360,000 980,000 1,760,000 1,380,000 4,780,000 4,220,000 $8,480,000 $7,320,000 $2,000,000 $1,640,000 2,280,000 2,380,000 1,960,000 1,960,000 2.240,000 1,340,000 $8,480,000 $7,320,000 Industry averages for the following four risk ratios are as follows: Average collection period Average dayu in inventory Current ratio Debt to equity ratio 25 days 60 days 2 to 1 501 Required: 1. Calculate the four risk ratios listed above for Company A in Year 2. (Use 365 days in a year. Round your answers to 1 decimal place.) Risk Ratio Average collection period Average days in inventory Current ratio Debt to equity ratio days days to 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting In A Nutshell Accounting For The Non-specialist

Authors: Walker, Janet

3rd Edition

075068738X, 9780750687386

More Books

Students also viewed these Accounting questions

Question

Who or what is affected by this situation?

Answered: 1 week ago

Question

How important is this situation to the organizations mission?

Answered: 1 week ago