Question: Ratio Computations and Discussion Costner Company has been operating for several years, and on December 31, 2010, presented the following balance sheet. The net income

Ratio Computations and Discussion Costner Company has been operating for several years, and on December 31, 2010, presented the following balance sheet. The net income for 2010 was $25,000. Assume that total assets are the same in 2009 and 2010. Compute each of the following ratios. For each of the four indicate the manner in which it is computed and its significance as a tool in the analysis of the financial soundness of the company.

(a) Current ratio.

(b) Acid-test ratio.

(d) Rate of return onassets.

COSTNER COMPANY BALANCE SHEET DECEMBER 31, 2010 Accounts payable Mortgage payable Common

COSTNER COMPANY BALANCE SHEET DECEMBER 31, 2010 Accounts payable Mortgage payable Common stock ($1 Retained earnings $ 40,000 75,000 95,000 Cash Receivables $ 70,000 160,000 Inventories pan Plant assets (net) 220,000 60,000 $430,000 $430,000

Step by Step Solution

★★★★★

3.55 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a b Current ratio Current Assets Current Liabilities 210000 70000 300 Current ratio measures ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

11-B-A-F (94).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Windsor Company has been operating for several years, and on December 31, 2019, presented the following balance sheet. WINDSOR COMPANY BALANCE SHEET DECEMBER 31, 2019 Cash $41,400 Accounts payable...

The following balance sheet and income statement information includes actual data for 2011 and forecasted data for 2012: Prepare a forecasted statement of cash flows for 2012. Use the indirect method...

The company reported the following balance sheet information: Total income tax expense for 2011 was $60,000. Compute the amount of cash paid for income taxes in2011. 2011 2010 Income taxes...

(L04) (Ratio Computations and Discussion) Sprague Company has been operating for several years, and on December 31, 2017, presented the following balance sheet. The net income for 2017 was $25,000....

(Ratio Computations and Discussion) Sprague Company has been operating for several years, and on December 31, 2004, presented the following balance sheet. The net income for 2004 was $25,000. Assume...

Costner Company has been operating for several years, and on December 31, 2010, presented the following statement of financial position. The net income for 2010 was $25,000. Assume that total assets...

E12.23 LO 4) (Ratio Computations and Discussion) Chen Group has been operating for several years, and on December 31, 2025, presented the following statement of financial position (amounts in...

Marigold Company has been operating for several years, and on December 31,2020, presented the following balance sheet. MARIGOLD COMPANY BALANCE SHEET DECEMBER 31, 2020 Cash $38,900 Accounts payable...

Costner Company has been operating for several years, and on December 31, 2012, presented the following balance sheet. The net income for 2012 was $25,000. Assume that total assets are the same in...

Bridgeport Company has been operating for several years, and on December 3 1 , 2 0 2 5 , presented the following balance sheet. BRIDGEPORT COMPANY Balance Sheet December 3 1 , 2 0 2 5 Cash $ 4 0 , 6...

Spillane's Specialty Clothing Inc. uses a job order cost system. A partial list of the accounts being maintained by the company, with their balances as of November 1, follows: Cash . . . . . . . . ....

Consider 2 countries that each produce two goods X and Y defined as follows. Assume the identical technologies across countries where X is K intensive, and Y is L intensive. HOME XH = f(LX, KH) YH =...

Some dedicated Hardware Flow Control Lines are, Request To Send ( RTS ) and Clear To Send ( CTS ) . Select one: True False

The following T-accounts record the operations of Roddick Co.: Required a. Calculate the amount of direct materials purchased during the period. b. Calculate the direct materials used in production...

Lee Chang opened Lee's Window Washing on July 1, 2014. In July, the following transactions were completed: July 1 Lee invested $20,000 cash in the business. 1 Purchased a used truck for $25,000,...

Lee Chang opened Changs Cleaning Service on July 1, 2010. During July the following transactions were completed. July 1 Chang invested $20,000 cash in the business. 1 Purchased used truck for $9,000,...

Lee Chang opened Lee's Window Washing on July 1, 2017. In July, the following transactions were completed: July 1 Invested $20,000 cash in the business. 1 Purchased a used truck for $25,000, paying...

At December 31, 2014, Giselle Company made an accrued expense adjusting entry of $1,700 for salaries. On January 4, 2015, it paid salaries of $3,000: $1,700 for December salaries and $1,300 for...

The escape velocity of any object from Earth is 11.2 km/s. (a) Express this speed in m/s and km/ h. (b) At what temperature would oxygen molecules (molecular mass is equal to 32.0 g/ mol) have an...

Outline the accounting procedures involved in applying the capital-lease method by a lessee.

Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,800,000 on March 1, $1,200,000 on June 1, and $3,000,000 on December...

Hanson Company (see BE10-2) borrowed $1,000,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year,...

Use the information for Hanson Company from BE10-2 and BE10-3. Compute avoidable interest for Hanson Company.

KNOWLEDGE OF R STUDIO IS VERY HELPFUL TO COMPLETE THIS PROBLEM. PLEASE ROUND TO 3 DECIMALS IN EVERY STEP OF THE PROBLEM. 12. Answer the following questions about using the "fragility.csv" data to...