This is a typed version of the information that is required for this problem - I screen Clipped it from another question i'd gotten help on.
My problem is my ratios didn't feel right - can somebody walk me through it? For the quick ratio in 20-8 I had 3.50 to 1. That can't be right, or am I just doubting myself? There's a lot of math in this problem. Thanks in advance.
Horizontal Analysis of Balance Sheets 2008 2007 Increase Decrease Percent 2007 Increase Decrease Percent 5238,750 $119,170 49.91% $97,830 $13,145 13.44% $140,920 S106,025 75.24% Horizontal analysis of Income Statements 2008 Ner sales 8337,920 Cost of goods sold $110,975 Gross profil $246,905 operating expenses Selling expenses $29,850 Administration expenses $52.325 Intrest expenses $2,500 Total operating expenses $84,675 Income before income taxes S162,270 Income tax expenses $55,172 Ner Income $107,098 -$21,550 -33.88% -$18,200 -1%92% $27,365 2.80% S500 5.26% $489,500 46,66% $497,615 21.94% $13,110 $50,000 $1,085 $94,195 S46,725 $12,487 $34,238 -$13,260 $2,325 $1,615 -59,520 SI19,545 $42,685 $72,860 -30.76% 4.63 130.41% -10.11% 217.29% 341.81% 212.80% Cash $18,450 S10,000 Accounts receivable (nel) $84,500 $102,700 Merchandise inventory $1,003,000 $975,635 Supplies $10,000 59,500 Property Plant and equipment $1,538,500 $1,049,000 Tonal assets S2,654,150 $2,176,835 Liabilities and Stockholders Equity Accounts Payable $147,000 $70,000 Bonds povable $750,000 S650,000 Common Stock $1,000,000 $850,000 Paid-in capital in excess of par $300,000 $200,000 Retaimed erwing S457,450 S106,835 Total liabilities and stockholders eysir, S2,654,450 $2,176,835 $77,000 110.00% $100,000 15.38% $150,000 17.65% $100,000 $0.00 $50,615 12.41% S47,615 21.94% Section D Directions: Use WeRBest Company's comparative income statements and balance sheets on the previous page and the additional information provided below to calculate the ratios listed below for 20-8 and 20-7. (Round to two decimal places.) (a) Current ratio (b) Quick ratio (c) Accounts receivable turnover (d) Merchandise inventory turnover Additional information: 1. Assume all sales are on account. 2. The balance in Accounts Receivable (net) on December 31, 20-6 was $100,000. 3. The balance in Merchandise Inventory on December 31, 20-6 was $1,000,000. 20-8 20-7 (a) Current ratio (b) Quick ratio (c) Accounts receivable turnover (d) Merchandise inventory turnover Famous, Inc. is divided into three departments. Net sales for the month of September are as follows: Department A Department B Department C $380.800 $486,380 $128.610 Advertising expense for September was $29,300. Directions: Allocate the advertising expense among the three departments on the basis of relative net sales. Show all calculations. (Round to the nearest whole cent.) Department A Department B Department C
