Question

TSE THE FOLLOWING INFORMATION TO FILL IN THE BALANCE SHEET BELOW TO ANSWER QUESTIONS 31 through 34 45 30 Average collection period (days) Number of shares outstanding 15,000 Accounts payable days Sales $850,000 Retained earnings (2018) $537,400 Gross profit margin 20% Dividend payout ratio 80% Inventory turnover ratio Accruals $9,000 Net profit margin 15% 1.25 Current ratio Return on assets Debt ratio Notes payable $13,000 Note: Of total sales. 60 percent are on credit and the remainder are cash sales. Assume a 360 day year. All data in the table above, unless otherwise stated, is for the year 2019. 40% Hodun, Inc. Balance Sheet for the Year Ending December 31, 2019 Cash Notes payable Accounts payable Accounts receivable Accruals Inventory Long-term debt Net fixed assets Common stock (52 par value) Total assets Capital surplus Retained earnings Total liab. & equity 31. Cash 32. Long-term debt = 33. Total assets 34. Capital surplus -

Answer 1

Answer with working notes is given below

Houdon Inc. Balance Sheet for year ending December 31, 2019 Cash $6,250 Notes payable Accounts Receivable $42,500 Accounts payable Inventory $85,000 Accruals Net Fixed Assets $1,460,000 Long-term debt Common Stock $2 par Capital Surplus Retained earnings $13,000 $85,000 $9,000 $530,500 $30,000 $363,350 $562,900 Total Assets $1,593,750 Total Liabilities and Equityl $1,593,750 31 Cash 32 Long term debt 33 Total Assets 34 Capital surplus $6,250 $530,500 $1,593,750 $363,350 I Income Statement Sales Less:COGS Gross profit Less: Operating expense Net profit Dividend Balance To RE $850,000 $680,000 $170,000 $42,500 $127,500 $102,000 $25,500

Working notes: Sales Credit sales Credit sales $850,000 60% $510,000 Average collection period Accounts Receivable 30 days $42,500 Credit Sales * 30/360 Inventory turnover ratio Cost of Goods sold Inventory $680,000 80% of Sales $85,000 ($680,000/8) Accounts payable days Cost of Goods sold Accounts payable $680,000 $85,000 COGS 45/360 Total Current liabilities Accounts payable Accrual Notes payable Total Current Liabilities $85,000 $9,000 $13,000 $107,000 Current Ratio Total Current Assets Accounts Receivable Inventory Cash Balance 1.25 $133,750 Current Liabilities * 1.25 $42,500 $85,000 $6,250 Net profit $127,500 15% of Sales Return on Assets Total assets 8% $1,593,750 ($127,500/8%) Fixed Assets Total Assets Less: Current Assets Fixed Assets $1,593,750 $133,750 $1,460,000 Debt ratio Total Debt Less: Current Liabilities Long term debt 40% $637,500 40% of Total Assets $107,000 $530,500 Retained Earnings Opening balance Net income Dividend Closing balance $537,400 $127,500 -$102,000 $562,900 $1,593,750 Total Assets Less: Current Liabilities Long term debt Total Stockholders equity RE closing balance Balance - Common Stock $107,000 $530,500 $956,250 $562,900 $393,350 Common stock par value Balance Capital surplus $30,000 (15,000 x $2) $363,350