Question

i need help with G and O

-For G 2018

its NOT 430 or 439

For G 2019

its NOT 352 or 342

-For O 2019

its NOT 11.21%or 7.93%or 5.85%

Financial statements for Fanning Company follow FANNING COMPANY Balance Sheets As of December 31 2018 2019 Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total ourrent assets Investments Plant (net) Land $ 14,500 6,500 38,000 139.000 10.000 208.000 25.000 265,000 26.000 $ 18.500 20.500 46.000 131.000 25.000 241.000 32 000 280.000 31.000 $584.000 $524.000 Total assets Liabilities and Stockholders' Equity Liablities Curent liablities Notes payable Accounts payable Salaries payable Total current labilities Nonourent liabilities Bonds payable Other Total noncurent liabilities $ 19.200 78.800 26.000 124.000 $ 8,100 65.000 20,000 93,100 150.000 29.000 179,000 303.000 150.000 24,000 174.000 Total liabilities Stockholders' equity Prefered stock, (par value $10, 5% cumulative, non-participating: 8,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained eamings Total stockholders' equity 267,100 80.000 80.000 96.900 256,900 $524.000 80.000 80.000 121.000 281,000 $584,000 Total liabilities and stockholders' equity FANNING COMPANY Statements of Income and Retained Eamings For the Years Ended December 31 2019 2018 Revenues Sales (net) Other revenues $280,000 9,000 $260,000 6.000 289,000 266.000 Total revenues Expenses Cost of goods sold Selling. general, and administrative Interest expense Income tax expense 140.000 60,000 9,500 48.000 118,000 55,000 8,700 47.000 228,700 257,500 Total expenses Net eamings (net income) Retained eamings, January 1 Less: Prefered stock dividends Common stock dividends Retained eamings, December 31 31,500 96,900 4,000 3,400 $121,000 37,300 67,000 4.000 3.400 $ 96,900 Required Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented, do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet. a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, 2018, were $39,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Round your intermediate calculations to 2 decimal places and your final

Answer 1

First thing , use average only in 2019 not in 2018

Assuming 360 days

g. Number of days to sell inventory

2019

Average stock in trade = ($131,000 + $139,000)/2

=$135,000

Cost of goods sold = $140,000

Number of days to sell inventory = (Average stock in trade /cost of goods sold)* 360 days

Number of days to sell inventory =( $135,000/$140,000)* 360 Days

= 347.14 (Rounded off)

Final answer in nearest whole number = 347 Days

2018

Since no figures for 2017 are given , we will not compute by average

Stock in trade = $139,000

Cost of goods sold =$118,000

Number of days to sell inventory = (stock in trade /cost of goods sold)* 360 days

=($139,000/$118,000)*360

=424.07 days ( Rounded off )

Final answer in nearest whole number = 424 days

Now, What mistakes you did

For 2018

You might have solved the Number of days to sell inventory by taking 365 days or there can be a mistake in rounding off and the whole number. If you took 365 days still 430 days is incorrect. If we solve by taking 365 days the answer will be 429.96 ( rounded off) and then whole number 429 days ( final answer)

Taking 365 days is not wrong but there can be difference in the answer

For 2019

Similarly,

If you solve this by taking 365 days still 352 days is incorrect. if we solve by taking 365 days the answer will be 351.96( rounded off ) and then whole number 351 days ( final answer)

Taking 365 days is not wrong but there can be difference in answer

First round off ( two decimal) then take whole number

o. Return on equity

2019

Net income = $31,500

Average shareholder's funds = $281,000+$256,900/2

=$268,950

Return on equity = (Net income / Average shareholder's funds)*100

=($31,500/$268,950)* 100

11.71 %

2018

Net income = $37,300

Shareholder's funds = $256,900

Return on equity = (Net income / shareholder's funds)*100

=($37,300/$256900)*100

14.52% ( Rounded off )

Now, What mistakes you did

You have solved the Return of equity for 2019 year by taking $ 281,000 as a shareholder's fund .You forgot to take the average of shareholder's funds. That's why answer 11.21% is incorrect