2017, . Mayco Brown average com Senoldus Equity 6. Standard manufacturing company was organized five year ago and manufactures toys. Its most recent three years balance sheets and income statements are reproduced below: Standard Manufacturing Company Balance Sheet Statement June 30, Year 5 Year 4 and Year 3 Particulars Yer 5 Year 4 Year 3 Assets Cash Tk12,000 Tk.15,000 Tk.16,000 Accounts receivable, net 1,83,000 80,000 60,000 Inventory 97,000 52,000 Other current assets 5,000 6,000 4,000 Plant and equipment, net 1,60,000 1,10,000 70,000 Total assets Tk.5,02,000 Tk. 3,08,000 Tk.2,02,00 Liabilities and Equity Accounts Payable Tk. 1,47,800 Tk.50,400 Tk.22,000 Income tax payable 30,000 Long term liabilities 1,20,000 73,000 22400 Common stock, Tk.S par value 1,10,000 1,10,000 80,000 94,200 49,600 Total liabilities and equity Tk.5,02,000 Tk.3,08,000 Tk.2,02,000 1,42,000 Additional Information: (a) All sales are on account. (b) Long term liabilities are owed to company's bank. (c) Terms of sales are net 30 days. Required: (a) Compute the following measures for both Years 4 and 5: (i) Current ratio (11) Acid test ratio Accounts receivable turnover ratio (iv) Collection period of receivables V Inventory turnover (vi) 'Days to sell inventory (vii) Debt-to-equity ratio (viii) Time interest earned (b) Using Year 3 as the base year, compute an index-number trend szies for. 0 Sales (1) Cost of goods sold (iii) Gross profit (iv) Marketing and administrative costs (v) Net income (c) Based on your analysis in (a) and (b), prepare a me page report yielding recommendation on whether to grant a loan to Sundard Manufacturing Company support your recommendation with relevant analysis. 14,400 28,000 Retained earnings 60,200 Sundard Manufacturing Company Condensed Income Statement June 30, Year 5, Year 4 and Year 3 Particulars Year 5 Year 4 Year 3 Sales - Tk.16,50,000 Tk.12,50,000Tk.10,50,000 Cose of goods sold (9,27,000) (8,10,000) (5,12,000) Gross profit 7,57,000 4,40,000 5,36,000 Marketing and administrative expenso.. (6,70,000) (3,96,700) (4,67,400) Operating income 87,000 43,300 70,240 Interest costs (12,000) (7,300) (2,240) Income before taxes 75,000 36,000 68,000 Income taxes (30,000) (14,400) (28,000) Net income Tk 45,000 Ti:.21,600 (Tk 40,000) A reconciliation of retained earnings for years ended June 30, Year 4, and Year 5, follows Standard Manufacturing Company Condensed Income Statement June 30, Year 5, Year 4 and Year 3 Particulars Year 5 Year 4 Balance, Beginning Tk.60,200 Tk.49,600 Add: Net income 45,000 21,600 Subtotal 1,05,200 71,200 Deduct: Dividend paid (11,000) (11,000) Balance, ending Tk.94,200 Tk. 60,200 - 4- 2017, . Mayco Brown average com Senoldus Equity 6. Standard manufacturing company was organized five year ago and manufactures toys. Its most recent three years balance sheets and income statements are reproduced below: Standard Manufacturing Company Balance Sheet Statement June 30, Year 5 Year 4 and Year 3 Particulars Yer 5 Year 4 Year 3 Assets Cash Tk12,000 Tk.15,000 Tk.16,000 Accounts receivable, net 1,83,000 80,000 60,000 Inventory 97,000 52,000 Other current assets 5,000 6,000 4,000 Plant and equipment, net 1,60,000 1,10,000 70,000 Total assets Tk.5,02,000 Tk. 3,08,000 Tk.2,02,00 Liabilities and Equity Accounts Payable Tk. 1,47,800 Tk.50,400 Tk.22,000 Income tax payable 30,000 Long term liabilities 1,20,000 73,000 22400 Common stock, Tk.S par value 1,10,000 1,10,000 80,000 94,200 49,600 Total liabilities and equity Tk.5,02,000 Tk.3,08,000 Tk.2,02,000 1,42,000 Additional Information: (a) All sales are on account. (b) Long term liabilities are owed to company's bank. (c) Terms of sales are net 30 days. Required: (a) Compute the following measures for both Years 4 and 5: (i) Current ratio (11) Acid test ratio Accounts receivable turnover ratio (iv) Collection period of receivables V Inventory turnover (vi) 'Days to sell inventory (vii) Debt-to-equity ratio (viii) Time interest earned (b) Using Year 3 as the base year, compute an index-number trend szies for. 0 Sales (1) Cost of goods sold (iii) Gross profit (iv) Marketing and administrative costs (v) Net income (c) Based on your analysis in (a) and (b), prepare a me page report yielding recommendation on whether to grant a loan to Sundard Manufacturing Company support your recommendation with relevant analysis. 14,400 28,000 Retained earnings 60,200 Sundard Manufacturing Company Condensed Income Statement June 30, Year 5, Year 4 and Year 3 Particulars Year 5 Year 4 Year 3 Sales - Tk.16,50,000 Tk.12,50,000Tk.10,50,000 Cose of goods sold (9,27,000) (8,10,000) (5,12,000) Gross profit 7,57,000 4,40,000 5,36,000 Marketing and administrative expenso.. (6,70,000) (3,96,700) (4,67,400) Operating income 87,000 43,300 70,240 Interest costs (12,000) (7,300) (2,240) Income before taxes 75,000 36,000 68,000 Income taxes (30,000) (14,400) (28,000) Net income Tk 45,000 Ti:.21,600 (Tk 40,000) A reconciliation of retained earnings for years ended June 30, Year 4, and Year 5, follows Standard Manufacturing Company Condensed Income Statement June 30, Year 5, Year 4 and Year 3 Particulars Year 5 Year 4 Balance, Beginning Tk.60,200 Tk.49,600 Add: Net income 45,000 21,600 Subtotal 1,05,200 71,200 Deduct: Dividend paid (11,000) (11,000) Balance, ending Tk.94,200 Tk. 60,200 - 4