Question

*Problem 13-04A a1,b (Video) The following financial information is for Cullumber Company. Cullumber Company Balance Sheets December 31 Assets 2020 Cash $ 70,000 Debt investments (short-term) 53,000 Accounts receivable 108,000 Inventory 229,000 Prepaid expenses 30,000 Land 130,000 Building and equipment (net) 264,000 Total assets $884,000 Liabilities and Stockholders' Equity Notes payable $172,000 Accounts payable 65,000 Accrued liabilities 41,000 Bonds payable, due 2023 250,000 Common stock, $10 par 202,000 Retained earnings 154,000 2019 $ 64,000 39,000 90,000 162,000 25,000 130,000 185,000 $695,000 $102,000 51,000 41,000 172,000 202,000 127,000 Total liabilities and stockholders' equity $884,000 $695,000

Answer 1

Assets	2020 ($)	2019 ($)
Cash	70,000	64,000
Debt investments	53,000	39,000
Accounts Receivable	1,08,000	90,000
Inventory	2,29,000	1,62,000
Prepaid expenses	30,000	25,000
Total current assets	4,90,000	3,80,000
Land	1,30,000	1,30,000
Building and equipment	2,64,000	1,85,000
Total Assets	8,84,000	6,95,000
Liabilities and stockholders
Notes Payable	1,72,000	1,02,000
Accounts Payable	65,000	51,000
Accured Liabilities	41,000	41,000
Total current liabilities	2,78,000	1,94,000
Bonds Payable	2,50,000	1,72,000
Total liabilities	5,28,000	3,66,000
Common stock	2,02,000	2,02,000
Retained earnings	1,54,000	1,27,000
Total equities	3,56,000	3,29,000
Total liabilities and stockholders	8,84,000	6,95,000

Current ratio	current assets / current liabilities
	2019 ($)	2020 ($)
Current assets	380,000	490,000
Current liabilities	194,000	278,000
Ratio	1.96	1.76
percentage change	(1.76-1.96)/1.96
	-10.02%

Accounts receivable turnover ratio	sales / average accounts receivable
	2019 ($)	2020 ($)
Beginning accounts receivable	90000	90000
End accounts receivable	90000	108000
Average = (beginning + end) / 2	90000	99000
Sales	786000	890000
Ratio	8.73	8.99	times
percentage change	0.26
	2.94%

Inventory turnover ratio	cost of goods sold / average inventory
	2019 ($)	2020 ($)
Beginning inventory	116,000	162,000
End inventory	162,000	229,000
Average = (beginning + end) / 2	139,000	195,500
cost of goods sold	575,000	641,000
Ratio	4.14	3.28	times
percentage change	(3.28-4.14) / 4.14
	-20.74%

Profit margin	net income / net sales
	2019 ($)	2020 ($)
net income	52000	55000
net sales	786000	890000
Ratio	6.62%	6.18%
percentage change	(6.18-6.62)/6.62
	-6.59%

Asset turnover	net sales / average assets
	2019 ($)	2020 ($)
Beginning assets	642000	695000
End assets	695000	884000
Average = (beginning + end) / 2	668500	789500
net sales	786000	890000
Ratio	1.18	1.13	times
percentage change	(1.13-1.18)/1.18
	-4.12%

Return on assets	net income / average assets
	2019 ($)	2020 ($)
Beginning assets	642000	695000
End assets	695000	884000
Average = (beginning + end) / 2	668500	789500
net income	52000	55000
Ratio	7.78%	6.97%
percentage change	(6.97-7.78)/7.78
	-10.41%

Earnings per share	(net income - preferred dividends) / shares outstanding
net income	52000	55000
dividends	0	0
shares outstanding	20200	20200
earnings per share	2.57	2.72
percentage change	(2.72-2.57)/2.57
	5.77%