Presented below and on the shown below is an incomplete income statement and incomplete comparative statements of financial position of Cotte Corporation.
COTTE CORPORATION
Income Statement
For the Year Ended December 31, 2012
Sales .............. $11,000,000
Cost of goods sold ....... ?___Gross profit .......... ?___
Operating expenses........ 1,665,000
Income from operations....... ?___
Interest expense ......... ?___
Income before income taxes ..... ?___
Income tax expense........ 560,000_
Net income ........... $ ?

Additional information:
1. The receivables turnover for 2012 is 10 times.
2. All sales are on account.
3. The profit margin for 2012 is 14.5%.
4. Return on assets is 22% for 2012.
5. The current ratio on December 31, 2012, is 3.0.
6. The inventory turnover for 2012 is 4.8 times.

Instructions
Compute the missing information given the ratios above. Showcomputations.

Transcribed Image Text:

COTTE CORPORATION Statements of Financial Position December 31 2011 Assets Plant assets (net) Current assets 2012 $4.620.000 $3.955,000 Inventory Accounts receivable (net) Cash 1720,000 950.000 375,000 3,045,000 $7.000,000 450,000 Total current assets Total assets Equity and Liabilities Share capital-ordinary. $1 par Retained earnings $3.000.000 $3,000.000 375,000 3.375.000 2.800.000 825,000 3.625,000 $7.000,000 400,000 Total equity 3,400,000 Long-term notes payable Current liabilities 9 Total liabilities Total equity and liabilities