Homework Answers
(a) Cost of goods sold =
Inventory turnover ratio= Cost of goods sold/[(beginning inventory + ending inventory)/2]
2.2 = Cost of goods sold/[(183,000 + 210,000)/2]
2.2 = Cost of goods sold/196,500
Cost of goods sold = 196,500 × 2.2
Cost of goods sold = 432,300.
Cost of goods sold for 2017 =$ 432,300.
(b) Net sales (credit)=
Accounts receivable turnover= Net sales(credit)/ [(beginning accounts receivable+ ending accounts receivable)/2]
8.1 =Net sales(credit)/(122,500 + 77,000 )/2
8.1 = Net sales(credit)/99,750
Net sales(credit) = 99,750 × 8.1
Net sales(credit) = 807,975
Net sales(credit) for 2017 =$ 807,975
(c) Net income =
Return on common stockholders’ equity= Net income/average common stockholders’ equity
0.25 = Net income/(417,000 + 102,500 + 417,000 + 106,000)/2
0.25 = Net income/521,250
Net income = 0.25 × 521,250
Net income = 130,312.50
Net income for 2017 =$ 130,313
(d) Total assets at December 31, 2017
Return on assets= Net income/[(beginning total assets + ending total assets)/2]
0.125 = 130,312.50/[(594,000 + ending total assets)/2]
[(594,000 + ending total assets)/2] = 130,312.50 /0.125
[(594,000 + ending total assets)/2] = 1,042,500
(594,000 + ending total assets) = 1,042,500 × 2
(594,000 + ending total assets) = 2,085,000
Ending total assets = 2,085,000 - 594,000
Ending total assets = 1,491,000
Total assets at December 31,2017 =$ 1,491,000
Summary:
| Particulars | Answer($) | |
| (a) | Cost of goods sold for 2017 | 432,300 |
| (b) | Net sales(credit) for 2017 | 807,975 |
| (c) | Net income for 2017 | 130,313 |
| (d) | Total assets at December 31, 2017 | 1,491,000 |
Note =
1. For calculation of total assets, the net income is not rounded to zero decimal. The actual net income is considered i.e. $130,312.50.
2. Average common stockholder's equity =
(Beginning common stock + beginning retained earning + closing common stock + closing retained earnings)/2
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Cash Accounts receivable (net) Inventory Accounts payable Notes payable Common stock, $100 par Retained earnings December...
Lingenfelter Corporation experienced a fire on December 31, 2017, in which its financial records were partially...
Lingenfelter Corporation experienced a fire on December 31,
2017, in which its financial records were partially destroyed. It
has been able to salvage some of the records and has ascertained
the following balances.
December 31, 2017
December 31, 2016
Cash
$ 30,000
$ 16,000
Accounts receivable (net)
74,500
130,000
Inventory
195,000
176,000
Accounts payable
45,000
91,000
Notes payable
28,000
61,000
Common stock, $100 par
401,000
401,000
Retained earnings
120,000
106,500
Additional information:
1.
The inventory turnover is 3.0 times.
2....
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Lingenfelter Corporation experienced a fire on December 31,
2017, in which its financial records were partially destroyed. It
has been able to salvage some of the records and has ascertained
the following balances.
December 31, 2017
December 31, 2016
Cash
$ 30,000
$ 16,000
Accounts receivable (net)
74,500
130,000
Inventory
195,000
176,000
Accounts payable
45,000
91,000
Notes payable
28,000
61,000
Common stock, $100 par
401,000
401,000
Retained earnings
120,000
106,500
Additional information:
1.
The inventory turnover is 3.0 times.
2....
Lingenfelter Corporation experienced a fire on December 31, 2017, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. December December 31, 2017 31, 2016 $ 26,500 $ 11,000 Cash Accounts receivable (net) 77,500 123,500 199,000 Inventory 186,000 Accounts payable 93,000 52,000 Notes payable 64,000 28,500 Common stock, $100 par 388,000 388,000 Retained earnings 111,000 108,500 Additional information: 1. The inventory turnover is 3.7 times. 2....
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