Question

E to E A. E EE 21 AaBbCcDc AabbCcDc AaBb C AaBbccc AaB 1 Normal 1 No Spac... Heading 1 Heading 2 Title 17 Paragraph Styles CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 454,600 Cost of goods sold 298,150 Gross profit 156,450 Operating expenses 98,800 Interest expense 4,000 Income before taxes 53, 650 Income tax expense 21, 612 Net income $ 32,038 o CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash "$ 20,000 Accounts payable $ 16,500 Short-term investments 9,400 Accrued wages payable 2,800 Accounts receivable, net 30, 600 Income taxes payable 4,500 Merchandise 38,150 Long-term note payable, 66,400 inventory secured by mortgage on plant Beta Prepaid 2,700 Common stock expenses 86,000 Plant assets, 154,300 Retained earnings net 78,950 Total assets $255, 150 Total liabilities and equity $255, 150 Required: Compute the following: (1) current ratio, (2) acid-test ratio (3) days' sales uncollected.(4) inventory tumover, (5) days' sales in inventory (6) debt-to-equity ratio, () times interest earned (8) profit margin ratio, 9 total asset turnover (10) return on total assets, and (11) retum on common stockholders' equity (Do not round intermediate calculations.) D. Focus og a oe *Mae w

Answer 1

Cabot Corporation
Income Statement	Dec-31
Sales	454,600.00
Total Sales	454,600.00
Expenses
Cost of goods sold	298,150.00
Gross Margin	156,450.00
Operating Expenses	98,800.00
Net operating Income	57,650.00
Interest Expense	4,000.00
Net Income before taxes	53,650.00
Income tax	21,612.00
Net Income	32,038.00
Balance Sheet
Assets
Current Assets
Cash	20,000.00
Short Term Investments	9,400.00
Accounts Receivable	30,600.00
Inventory	38,150.00
Prepaid Expense	2,700.00
Total Current Assets	100,850.00
Property Plant & Equipment (Net)	154,300.00
Total Assets	255,150.00
Liabilities & Stockholders' Equity
Liabilities
Current Liabilities
Accounts Payable	16,500.00
Wages Payable	2,800.00
Income taxes Payable	4,500.00
Total Current Liabilities	23,800.00
Long Term Notes Payable	66,400.00
Total Liabilities	90,200.00
Stockholders' Equity
Common Stock	86,000.00
Retained Earnings	78,950.00
Total Stockholders' Equity	164,950.00
Total Liabilities & Stockholders' Equity	255,150.00
Total Current Assets	100,850.00
Less:
Inventory	38,150.00
Prepaid Expense	2,700.00
Quick Assets	60,000.00

Ans 1	Dec-31
Current Ratio	4.24
Current Assets/Current Liabilities
Ans 2
Acid Test Ratio	2.52
Quick Assets/Current Liabilities
Ans 3
Days sales uncollected	24.57
365/Accounts Receivables Turnover
Accounts Receivables Turnover	14.86
Sales Revenue/Accounts Receivable
Ans 4
Inventory Turnover	7.82
Cost of goods sold/Inventory
Ans 5
Days sales in Inventory	46.70
365/Inventory Turnover
Ans 6
Debt to Assets Ratio	0.35
Total Liabilities /Total Assets
Ans 7
Times Interest Earned	14.41
Earning before Interest & Taxes/Interest Expense
Ans 8
Profit margin ratio	7.05%
Net Income/Net Sales
Ans 9
Total Assets Turnover	1.78
Net Sales / Total Assets
Ans 10
Return on Total Assets	12.56%
Net Income / Total Assets
Ans 11
Return on Equity	19.42%
Net Income/Total Stock Holders Equity