Cash $20,000 Accounts Receivable, Net 81,000 Merchandise Inventory 186,000 Total Assets 635,000 Accounts Payable 99,000 Accrued...
Cash $20,000
Accounts Receivable, Net 81,000
Merchandise Inventory 186,000
Total Assets 635,000
Accounts Payable 99,000
Accrued Liabilities 41,000
Short-term Notes Payable 48,000
Long-term Liabilities 224,000
Net Income 71,000
Common Shares Outstanding 10,000
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1. |
Compute Road Trip's current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places. |
|
2. |
Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately. |
|
a. Purchased merchandise inventory of $46,000 on account. |
|
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b. Borrowed $122,000 on a long-term note payable. |
|
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c. Issued 1,000 shares of common stock, receiving cash of $105,000. |
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d. Received cash on account, $8,000 |
Homework Answers
PART-1)
|
PART-1) A) Current ratio: Total current assets / Total current liabilities = 287,000 / 188,000 = 1.53 Working:
B) Debt ratio: Total liabilities / Total assets = 412,000 / 635,000 = 0.65 Working:
C) EPS: (Net income - Preferred dividends) / Weighted average number of common shares outstanding = 71,000 / 10,000 = $7.1 PART-2) A) i) Current ratio: Total current assets / Total current liabilities = 333,000 / 234,000 = 1.42 Working:
ii) Debt ratio: Total liabilities / Total assets = 458,000 / 635,000 = 0.72 Working:
iii) EPS: $7.1 Working: EPS= (Net income - Preferred dividends) / Weighted average number of common shares outstanding = 71,000 / 10,000 = $7.1 B) i) Current ratio: Total current assets / Total current liabilities = 455,000 / 234,000 = 1.94 Working:
ii) Debt ratio: Total liabilities / Total assets = 757,000 / 534,000 = 1.42 Working: Total assets = 635000 + 122000 = 757,000
iii) EPS: (Net income - Preferred dividends) / Weighted average number of common shares outstanding = 71,000 / 10,000 = $7.1
I have answered more than 4 parts |
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Current ratio: Total current assets / Total current liabilities = 287,000 / 188,000 = 1.53
2)
|
Accrued liabilities |
41,000 |
|
Accounts Payable |
99,000 |
|
Short-term Notes Payable |
48,000 |
|
Long term liabilities |
224,000 |
|
Total liabilities |
412,000 |
Debt ratio: Total liabilities / Total assets = 412,000 / 635,000 = 0.65
3) EPS: (Net income - Preferred dividends) / Weighted average number of common shares outstanding = 71,000 / 10,000 = $7.1
PART-2)
A)
|
Cash |
20,000 |
|
Accounts Receivable |
81,000 |
|
Inventory |
232,000 |
|
Current assets |
333,000 |
|
Accrued liabilities |
41,000 |
|
Accounts Payable |
145,000 |
|
Short-term Notes Payable |
48,000 |
|
Current liabilities |
234,000 |
Current ratio: Total current assets / Total current liabilities = 333,000 / 234,000 = 1.42
|
Accrued liabilities |
41,000 |
|
Accounts Payable |
145,000 |
|
Short-term Notes Payable |
48,000 |
|
Long term liabilities |
224,000 |
|
Total liabilities |
458,000 |
Debt ratio: Total liabilities / Total assets = 458,000 / 635,000 = 0.72
EPS: (Net income - Preferred dividends) / Weighted average number of common shares outstanding = 71,000 / 10,000 = $7.1
B)
|
Cash |
142,000 |
|
Accounts Receivable |
81,000 |
|
Inventory |
232,000 |
|
Current assets |
455,000 |
|
Accrued liabilities |
41,000 |
|
Accounts Payable |
145,000 |
|
Short-term Notes Payable |
48,000 |
|
Current liabilities |
234,000 |
Current ratio: Total current assets / Total current liabilities = 455,000 / 234,000 = 1.94
Total assets = 635000 + 122000 = 757,000
|
Accrued liabilities |
41,000 |
|
Accounts Payable |
99,000 |
|
Short-term Notes Payable |
48,000 |
|
Long term liabilities |
346,000 |
|
Total liabilities |
534,000 |
Debt ratio: Total liabilities / Total assets = 757,000 / 534,000 = 1.42
EPS: (Net income - Preferred dividends) / Weighted average number of common shares outstanding = 71,000 / 10,000 = $7.1
I have answered more than 4 parts
Add Answer to:
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