Compute the following ratios at December 31, 2027. (Round current ratio to 2 decimal pla Round...

Transcribed Image Text:

Compute the following ratios at December 31, 2027. (Round current ratio to 2 decimal pla Round accounts receivable turnover, average collection period, inventory turnover inventory to 1 decimal place, e.g. 1.8. Use 365 days for calculation.) (a) Current ratio. (b) Accounts receivable turnover. times (c) Average collection period. days (d) Inventory turnover. times (e) Days in inventory. days (f) Free cash flow. $ Balance Sheets December 31 2027 2026 Cash $14,000 $27,000 Accounts receivable (net) 63,000 54,000 Inventory 54,000 45,000 Plant assets (net) 180,000 162,000 $311,000 $288,000 Accounts payable $45,000 $54,000 Bonds payable (15%) 90,000 90,000 Common stock, $10 par 126,000 108,000 Retained earnings 50,000 36,000 $311,000 $288,000 Additional information for 2027: 1 Net income was $26,000. 2 Sales on account were $376,000. Sales returns and allowances amounted to $26,000. 3. Cost of goods sold was $199,000. 4. Net cash provided by operating activities was $56,000. 5. Capital expenditures were $26,000, and cash dividends paid were $12.000. 6. The bonds payable are due in 2040. Compute the following ratios at December 31, 2027. (Round current ratio to 2 decimal pla Round accounts receivable turnover, average collection period, inventory turnover inventory to 1 decimal place, e.g. 1.8. Use 365 days for calculation.) (a) Current ratio. (b) Accounts receivable turnover. times (c) Average collection period. days (d) Inventory turnover. times (e) Days in inventory. days (f) Free cash flow. $ Balance Sheets December 31 2027 2026 Cash $14,000 $27,000 Accounts receivable (net) 63,000 54,000 Inventory 54,000 45,000 Plant assets (net) 180,000 162,000 $311,000 $288,000 Accounts payable $45,000 $54,000 Bonds payable (15%) 90,000 90,000 Common stock, $10 par 126,000 108,000 Retained earnings 50,000 36,000 $311,000 $288,000 Additional information for 2027: 1 Net income was $26,000. 2 Sales on account were $376,000. Sales returns and allowances amounted to $26,000. 3. Cost of goods sold was $199,000. 4. Net cash provided by operating activities was $56,000. 5. Capital expenditures were $26,000, and cash dividends paid were $12.000. 6. The bonds payable are due in 2040.