Question

15 and 16

PART 2 Understanding Financial Statements and Cash Flow 2016 BETHESDA MINING COMPANY Balance Sheets as of December 31, 2015 and 2016 2015 2016 2015 Assets Liabilities and Owners' Equity Current assets Cash Current liabilities $ 19,256 $ 21,946 Accounts receivable Accounts payable $171,531 46,396 54,486 Inventory Notes payable 79,218 109,626 129.253 Total $250.749 Total $175,278 $205,685 Long-term debt $255,000 Owners' equity Common stock and paid-in surplus $160,000 Fixed assets Accumulated retained earnings 214,915 Net plant and equipment $705,386 $785,205 Total $374,915 Total assets $880,664 $990,890 Total liabilities and owners' equity $880,664 $153,984 107,606 $261,590 $278,500 $170,000 280,800 $450,800 $990,890 LO1 LO 2 15. Preparing Standardized Financial Statements. Prepare the 2015 and 2016 common-size balance sheets for Bethesda Mining. 16. Calculating Financial Ratios. Based on the balance sheets given for Bethesda Mining, calculate the following financial ratios for each year a. Current ratio b. Quick ratio c. Cash ratio d. Debt-equity ratio and equity multiplier e. Total debt ratio

Answer 1

Bcrucon Mining company Rolunu thach an un bar , non a 2016. 015 2016 J. Awels ) current asseks cash Auunto Wanivable Inventory Tolond current amics Tolay Timed amets 19, 256 | 21,946 46,396 154.486 109,626 129,253 1115,218 205685 1 :105,386 795205 13%9664 990890 b) - Tolar assets II 7,531 1153984 79218 107606 1 250 749 261590 1. Liabilities a) current liabilities Accounts payable Notes payable Total current liabilines bi Total Frund liabi litres Comman Stout in surpley Aumlated retamed camy Total $ I 160000 214915 374915 880664 70oool 288800 1450800 1990890 Total liabilete

anrets 2016 I current 10) a) Current Ratio . Current Anet win current licebil, ha for: 2015 Cunet Assets = $ 173278 Cunent liabilities : $ 250749 current C/R = 175278 25074g = 0.70 Anett - 205685 rent liabilitar & 261599 4 205685 261590 3 'CR - by Quick Ratio - = 0.19 Current Assets 7 Inventory Cunut liabilities - For 2016 Current For 2015 current Assels = $ 135278. e Inventory = $ 109626) Current Assets a $205685 centry = $(129253) $ 76432 65652 1 a/p = 4 Qle = 65652 25074g = 0.26 76,432 261590 0.29 - eath liabil por 2016 Cash rako = Cash & cash equilants Kοι 101 Cl- & 19256 261590 $21946 Tela = 25074g = 0.08 -0.083,

di Debt equity F equity ratio - Total liabilities Total equity For 2016 For 2015 $2 Pleratio - 255000 Dle ratio = $ 278500 450800 O. $314915 = 0.680 = 0.620. equity multiples - Tolal Assets - Total Shareholder funds for 2016 em ; - For our 880664 37ugis 89 $ 990890 Em = 450800 = 2.20 = 2.35 9 Debtrato - Total debt con Carey mouthphe for 2016 pocty mu toplay) 1 Total asset OI for 2015 Phat - 2s) oli 1-0.43 1 Plato 1-0.45 = 0.55 0,57