Exercise 13-17 Pharoah Company has been operating for several years, and on December 31, 2017, presented the following balance sheet. PHAROAH COMPANY BALANCE SHEET DECEMBER 31, 2017 Cash $39,300 Accounts payable $78,100 Receivables 79,300 Mortgage payable 143,200 Inventory 101,500 Common stock ($1 par) 146,500 Plant assets (net) 223,000 Retained earnings 75,300 $443,100 $443,100 The net income for 2017 was $26,600. Assume that total assets are the same in 2016 and 2017. Compute each of the following ratios. (Round answers to 2 decimal places, e.g. 1.59 or 45.87%.) (a) Current ratio (b) Acid-test ratio (c) Debt to assets ratio % (d) Return on assets %
Based on the balance sheet:
Current assets are
Cash= $39300 (can be used immediately)
Receivables= $79300 (Will be collected within a year)
Inventory= $10500 (Will be sold within a year)
Non current assets are
Plant assets= $223000 (can not be converted into cash within a year)
Current liabilities are
accounts payable= $78100 (To be paid within a year)
Non current liabilities
Mortgage payable= $143200 (To be paid over the length of the mortgage period)
Now,
(a) Current Ratio = Current assets / Current liabilities
= (Cash + receivables + inventory) / accounts payable
= (39300 + 79300 + 101500) / 78100
= 2.82
(d) Acid test Ratio = (cash + receivables + short term investments) / Current liabilities
= (39300 + 79300 ) / 78100
= 1.52
(c) Debt to assets ratio% = (Total debt / Total assets )*100
= [Mortgage payable / (Cash + receivables + inventory + plant assets)]*100
= [143200 / (39300 + 79300 + 101500 + 223000)]*100
= 32.32%
(d) Return on assets% = (Net income / Total assets)*100
= [26600 / (39300 + 79300 + 101500 + 223000)]*100
= 6.00%
Exercise 13-17 Pharoah Company has been operating for several years, and on December 31, 2017, presented...
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Flint Company has been operating for several years, and on
December 31, 2020, presented the following balance sheet.
FLINT COMPANY
BALANCE SHEET
DECEMBER 31, 2020
Cash
$36,700
Accounts payable
$75,200
Receivables
67,600
Mortgage payable
126,700
Inventory
100,500
Common stock ($1 par)
143,800
Plant assets (net)
206,100
Retained earnings
65,200
$410,900
$410,900
The net income for 2020 was $26,200. Assume that total assets are
the same in 2019 and 2020.
(a) Compute each of the following ratios.
(Round answers to 2...
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compute each of the following ratios
ment Exercise 13-17 Ayayai Company has been operating for several years, and on December 31, 2017, presented the following balance sheet. AYAYAI COMPANY BALANCE SHEET DECEMBER 31, 2017 Cash $43,500 Accounts payable $82,800 Receivables 70,300 Mortgage payable 136,200 Inventory 103,400 Common stock ($1 par) 145,300 Plant assets (net) 227,900 Retained earnings 80,800 $445,100 $445,100 The net income for 2017 was $24,200. Assume that total assets are the same in 2016 and 2017 Compute each...
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The following financial information is for Pharoah
Company.
PHAROAH COMPANY
Balance Sheets
December 31
Assets
2017
2016
Cash
$ 72,000
$ 69,000
Debt investments (short-term)
54,000
39,000
Accounts receivable
107,000
90,000
Inventory
236,000
162,000
Prepaid expenses
30,000
27,000
Land
133,000
133,000
Building and equipment (net)
260,000
188,000
Total assets
$892,000
$708,000
Liabilities and Stockholders’ Equity
Notes payable
$170,000
$106,000
Accounts payable
65,000
54,000
Accrued liabilities
42,000
42,000
Bonds payable, due 2020
250,000
171,000
Common stock, $10 par
209,000
209,000
Retained...