Compute the specified ratios using the following December 31, 2018, statement of financial position for Palmer Company.
Question:
Assets
Cash.......................................................................... $110,000
Marketable securities.......................................................... 10,000
Accounts receivable......................................................... 120,000
Inventory..................................................................... 160,000
Property and equipment.................................................... 250,000
Accumulated depreciation................................................. (50,000)
Total assets.................................................................. $600,000
Liabilities and Stockholders' Equity
Accounts payable........................................................... $ 86,000
Current notes payable......................................................... 4,000
Mortgage payable........................................................... 130,000
Bonds payable................................................................ 82,000
Common stock.............................................................. 200,000
Retained earnings............................................................ 98,000
Total liabilities and stockholders' equity.............................. $600,000
The average number of common shares outstanding during 2018 was 1,500. Net income for the year was $60,000.
Required
Compute each of the following and round computations to two decimal points.
a. Current ratio
b. Earnings per share
c. Acid-test ratio
d. Return on investment
e. Return on equity
f. Debt to equity ratio
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
Question Posted: