Presented here are an incomplete income statement and balance sheet for Schwenke Corporation.

Additional information:
1. The gross profit margin is 40%.
2. The income tax rate is 20%.
3. The inventory turnover is 8 times.
4. The current ratio is 3:1.
5. The asset turnover is 1.5 times.
Instructions
Calculate the missing information using the ratios. Use ending balances instead of average balances, where aver- ages are required for ratio calculations. Show your calculations.
TAKING IT FURTHER
Why is it not possible to calculate the missing amounts in the same sequence (i.e., (a), (b), (c), etc.) that they are presented above?

Transcribed Image Text:

SCHWENKE CORPORATION Income Statement Year Ended December 31, 2017 $ (a) Net sales Cost of goods sold Gross profit Operating expenses Profit from operations Interest expense Profit before income taxes Income tax expense Profit 333,750 10,500 $124,600 SCHWENKE CORPORATION Balance Sheet December 31, 2017 Assets Current assets Cash Accounts receivable Inventory $ 7,500 Total current assets Property, plant, and equipment Total assets Liabilities Current liabilities Non-current liabilities 120,000 Total liabilities Common shares Retained earnings 250,000 400,000 650,000 $(n) Total shareholders' equity Total liabilities and shareholders' equity