Question

Financial statements for Boston Corporation are presented below. Use for 17-29 Boston Corporation Comparative Balance Sheet December 31 Assets 2011 2010 Cash $   120,000 $   110,000 Accounts receivable (net) 135,000 95,000 Inventory 270,000 240,000 Property, plant, and equipment (net)      750,000      800,000 Total assets $1,275,000 $1,245,000 Liabilities and Stockholders' Equity Accounts payable $   172,000 $   208,000 Accrued liabilities 12,000 16,000 Bonds payable, 10 percent 140,000 160,000 Common stock, $10 par (10,000 shares)      500,000      500,000 Retained earnings      451,000         361,000 Total liabilities and stockholders' equity $1,275,000 $1,245,000 Boston Corporation Income Statement For the Year Ended December 31, 2011 Net sales $1,200,000 Cost of goods sold     700,000 Gross margin $ 500,000 Operating expenses Depreciation expense $ 70,000 Interest expense 10,000 Other expenses 260,000    340,000 Income before income taxes $ 160,000 Income taxes expense      50,000 Net income Earnings per share $ 110,000 $12.00 Note: Dividends of $0.90 per share were declared and paid during 2011. The market price of the stock on December 31, 2011 was $18.00 per share. Compute the following for 2011. Round answers to two decimal places. SHOW AND LABEL YOUR WORK.. 17. Current ratio 18. Quick ratio 19. Receivable turnover 20. Days Sales in Accounts Receivable 21. Asset turnover 22 Ratio of fixed assets to long term liabilities 23. Profit margin 24. Debt to equity ratio   25. Inventory turnover Days sales in inventory 27. Return on equity 28. P/E ratio 29. Dividend yield

Answer 1

		As per the Chegg answering guidelines only first four questions have been answered please take an note of it
	17	Current ratio
		Current ratio=	Current asset
			Current liabilities
		Current ratio=	525,000
			184,000
		Current ratio=	2.85
		Current assets
		Cash	120,000
		Receivable (net)	135,000
		inventory	270,000
		Total Current asset	525,000
		Current liabilities
		Accounts Payable	172,000
		Accrued liabilities	12,000
		Total Current liabilities	184,000
	18	Quick ratio
		Quick ratio=	Cash+Accounst receivable+marketable securities
			Current liabilities
		Quick ratio=	120,000+135,000
			184,000
		Quick ratio=	255,000
			184,000
		Quick ratio=	1.39
	19	Accounts receivable Turnover
		Accounts receivable Turnover=	Credit sales
			Average Accounts receivable
	Note:-	It is assumed that all sales are credit sales only and in the absence of previous year accounts receivable it is assumed that given accounts receivable are average accounts receivable
		Accounts receivable Turnover=	1,200,000
			115,000
		Accounts receivable Turnover=	10.43
		Average accounts receivable=	Receivable of 2011+receivable of 2010
			2
		Average accounts receivable=	135,000+95,000
			2
		Average accounts receivable=	230,000
			2
		Average accounts receivable=	115000
	20	Days Sales in Accounts Receivable
		Days Sales in Accounts Receivable=	365 Days	or	360 Days
			Accounts receivable Turnover		Accounts receivable Turnover
		Days Sales in Accounts Receivable=	365 days		360 Days
			10.43		10.43
		Days Sales in Accounts Receivable= ( in days)	34.98		34.50