Question

can someone help me

Financial statements for Fanning Company follow FANNING COMPANY Balance Sheets As of December 31 2019 2018 25.000 241,000 208.000 280,000 31,000 $584 000 26.000 $524 000 $ Current assets Cash Marketable securities Accounts receivable net) Inventories Prepaid items Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liable Notes payable Accounts payable Salaries payable Total current a s Noncurrenties Bonds payable Other Total noncurrent abilities Total liabilities Stockholders' equity Preferred 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 earnings Total stockholders' equity Total liabilities and stockholders' equity $ 19,200 78.800 20.000 8,100 65.000 93,100 150.000 29.000 179.000 303 000 150.000 24 000 174 000 267,100 80.000 80.000 80,000 80 000 121000 21000 $584 000 256 900 $524.000 2018 $260,000 6.000 200.000 FANNING COMPANY Statements of income and Retained Earings For the Years Ended December 31 2019 Revenues Sales (net) $280.000 Other revenues 9,000 289.000 Total revenues Expenses Cost of goods sold 140,000 Selling, general, and administrative 60 000 Interest expense 9.500 Income tax expense 48.000 257.500 Total expenses Net earnings (net income) 31,500 Retained earnings, January 1 96.900 Less: Preferred stock dividends 4,000 Common stock dividends Retained earings, December 31 $121,000 118.000 55,000 8.700 47.000 228.700 37,300 67.000 4,000 3.400 $96.900 3.400 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

a) Working Capital= Current Assets - Current liabilities.

For Year 2019-

Value of Current Asset is $241000 and Current Liabilities is $124000

Total Working capital (2019)= 241000-124000 i.e $ 1,17,000.

For year 2018-

Value of Current asset $ 208000 and current liability is $ 93,100

Total Working capital (2018)= 208000-93100 i.e $ 1,14,900

So ratio (2019/2018)= 117000/114900= 1.01:1

b) Current ratio= Current Assets/Current liabilities.

For year 2019

Current Assets= $2,41,000

Current liabilities= $1,24,000

Current Ratio= 241000/124000= 1.94:1

For year 2018

Current Assets= $ 2,08,000

Current Liability= $93,100

Current ratio= 208000/93100= 2.23:1

C) Quick Ratio= Quick Assets/ Current liabilities

Quick Assets= Current Assets-Inventory-Prepaid items

For Year 2019

Current Assets= 241000

Inventory/Stock= 131000

Prepaid Items= 25000

So Quick Assets= 241000-131000-25000= $85000

Current Liabilities= 124000

Quick ratio= Quick assets/ Current liabilities= 85000/124000 i.e 0.68:1

For Year 2018

Current Assets= $208000

Inventory= $ 139000

Prepaid Items= $10000

Quick Assets= Current Assets-Inventory-Prepaid items

Quick Assets= 59000

Current Liabilities= 93100

Quick ratio= 59000/93100= 0.63:1

d) Accounts receivables turnover ratio= Net Credit Sales/ Average Accounts receivables.

For year 2019

Net Credit sales= Sales- cash sales= 280000-0= $2,80,000

Account receivables= Opening balance= 39000

Closing balance=46000

Average AR= opening balance+Closing balance/2

=39000+46000/2= $62,000

So Accounts receivables turnover ratio= 280000/62000= 4.51:1

For year 2018

Net Credit sales= Sales- cash sales= 260000-0= $ 2,60,000

Average AR= 46000+38000= 42,000

Ratio= 260000/42000= 6.19:1

Please note- (As per guidelines we are only allowed to attend maximum of 4 sub-parts in multiple segment questions).